Charities Urged to Set Online Guidelines Following One Group’s ‘Lapse’

After a nonprofit group this month punished two employees for using online aliases to promote its services, charities are being advised to set guidelines about how workers represent themselves on the Internet.

Just a few days after the New Year’s holiday, the Board of Directors of GiveWell, in New York, demoted its co-founder and executive director, Holden Karnofsky, for hiding his identity while praising the charity on various Web sites. He will now serve as a program officer.

In addition to the demotion, Mr. Karnofsky will enter a professional-training program and pay a $5,000 financial penalty.

Elie Hasenfield, a program officer who helped set up the group with Mr. Karnofsky last year, was also penalized $5,000 for questionable online marketing efforts.

GiveWell had pledged to operate the “world’s first completely transparent charitable grant maker” by making public its evaluations of grant seekers (The Chronicle, December 13).

But the two co-founders’ promotional tactics contradicted its pledge to be open about its work, the board said.

“The board believes that the acts of misrepresentation that were committed are indefensible and are in direct conflict with the goals of the organization, and we condemn them in the strongest possible terms,” it said in a statement on GiveWell’s Web site.

Promising Refunds

Mr. Karnofsky declined to comment on the board’s actions. He said he was unable to talk to the news media until GiveWell creates a new communications policy.

In a message put on GiveWell’s blog shortly after he was caught, he apologized for what he called a “horrible lapse in judgment.”

To reassure donors, GiveWell has offered to return contributions received after November 30. According to Robert Elliott, the group’s chairman and an employee of a financial-services company, no donors have contacted him to ask for a refund.

While the organization will continue to operate for the time being, its future efforts remain in question.

In the next few months, Mr. Elliott said, “the board will reconsider both the direction of the organization’s programming and the personnel necessary to accomplish those goals.”

In that time, GiveWell is “not actively looking” for a new leader and the board will effectively act as the executive director, he said.

Seeking Donors

Mr. Karnofsky’s disguised promotional messages were uncovered on Metafilter, an online message board.

In an effort to attract potential donors before the end of the year, Mr. Karnofsky on December 30 wrote a message under the name “gerimiah” that asked for ideas about how to choose a charity to support. He later answered as “Holden0″ and touted GiveWell’s evaluations of nonprofit groups.

Once Metafilter found the deceptive marketing, which violates the site’s rules, members discovered other examples of masked self-promotion by Mr. Karnofsky, known as astroturfing, on Luxist.com and other Web sites.

What’s more, Mr. Karnofsky admitted that he had sent 10 messages to blog writers about his charity using an employee’s e-mail address to hide the connection to GiveWell.

While Mr. Karnofsky’s actions angered many people, not everyone agreed that what he did was reprehensible.

“The controversy is way out of proportion to the ‘crime,’” wrote Seth Godin, a marketing consultant in New York, in an e-mail message. “All he did was mask his identity while asking a question. People need to chill out a bit.”

Michelle Moon, the Metafilter member who first raised questions about Mr. Karnofsky, disagreed. While public-relations companies may use such “guerrilla marketing,” charities need to avoid such tactics or risk being seen as untrustworthy, she said.

Ms. Moon, who is director of education at Strawbery Banke, a museum in Portsmouth, N.H., said young people like Mr. Karnofsky, who is 26, need to better understand nonprofit principles; at the same time, experienced charity workers should learn more about Internet communications tools.

“Our standards already exist, we just need to apply them to another medium,” she said. “The philanthropic world needs to get more comfortable online.”

Disclosure Policy

One step in this direction is drafting a disclosure and ethics policy that covers Internet operations, said Bill Strathmann, chief executive officer at Network for Good, an online giving portal. Network for Good, in Bethesda, Md., has signed a code of ethics created by the ePhilanthropy Foundation, a group in Ellicott City, Md., that helps charities with online fund raising.

The one-page code, which about 100 organizations have endorsed, requires groups to “employ practices on the Web site that exhibit integrity, honesty, and truthfulness and seek to safeguard the public trust.”

If more charities consider adopting such policies, Mr. Strathmann said, the GiveWell episode might have a silver lining.

“Ironically, it may put more attention on transparency than anything the group had done previously,” he said.

For its part, GiveWell’s board is writing a communications policy to govern online activities, said Mr. Elliott, the charity’s chairman.

“The organization wants to ensure these types of activities don’t happen again,” he said. “When communicating with the public, you need to be consistent with your values. It is not worth drumming up extra Web site hits if the message is not consistent.”

But several observers said the organization continues to fail to demonstrate the values it set out for itself, and they question whether the group will be able to attract donors with this high-profile black eye.

Jeff Trexler, a professor of social entrepreneurship at Pace University, said GiveWell should have closed its doors or merged with another group to honor its promise of “radical accountability.”

“I would’ve shut it down,” said Mr. Trexler, “because its original mission has been compromised.”