Guidelines Show Charities How to Work With Internet Companies on Fund Raising

By GRANT WILLIAMS

The National Society of Fund Raising Executives has released “Internet Transaction Guidelines,” a set of 22 recommendations that charities can use when they work with Internet-based companies that help them raise money through Web sites or other methods.

“For many smaller charities or those organizations with few technology resources, these Internet-based service providers open up a new array of opportunities,” says Paulette Maehara, president of the society.

“However, many charities are hesitant to partner with Internet-based service providers because they don’t know the issues that need to be addressed, and are unsure if the dot-com they hire today will become the ‘dot-gone’ of tomorrow,” she says. “These guidelines address many of those issues and concerns.”

The fund-raisers’ group recommends that a charity have a formal agreement with all companies that represent the organization or accept donations on its behalf.

“When charities lose control over their reputation, the public’s trust and confidence in them may suffer,” Ms. Maehara says. An exception to this principle, the guidelines state, may be appropriate where the online entity is itself a charity that is seeking solely to help generate online donations to all charities.

Another guideline strongly recommends that formal agreements with Internet-based companies specify how a charity’s name, logo, and other identifying information will be used on a Web site and in related communications.

The society also suggests that such agreements should:

• Make clear which party (the charity or the Internet-based company) is required to register with appropriate regulators, and whether the company will protect the charity from adverse actions by regulators.
• Specify who has legal control of charitable contributions: Does the company simply act as a conduit, passing on money to the charity, or does it legally control the gift at some point and then pass it on?
• Detail all fees that the company charges against each gift to the charity, including “transaction,” “after transaction,” and “account management” fees.
• Make clear whether the provider is capturing demographic information about donors during transactions or in surveys after a donation has been made, and if so, who owns the data. If information is collected, the company should clearly and readily disclose that fact to potential donors and other visitors to its Web site.
• Specify what happens if the provider ceases to operate or exist. The company “should have policies and procedures in place to protect the interests of both donors and the charity in case of this contingency.”

The society also recommends that a charity closely examine the purpose and operation of company-run Web sites to ensure that the charity’s mission, reputation, and style match those of the service provider.

“Charities should get a real feel for the site,” says Ms. Maehara. “Is the Web site more aggressive or passive in its solicitation style?”

Another key consideration, Ms. Maehara says, is what services a Web site offers visitors other than help in making a gift. “Can they find out about volunteerism? Explore the charity’s activities in support of its mission? Buy products where a percentage goes to a charity?” she asks. “All those factors will affect how donors view a site and, subsequently, how they view the charity.”

For a copy of the guidelines, contact N.S.F.R.E.’s fax-on-demand service at (888) 233-0736 and requesting a list of available documents or by contacting the organization at (800) 666-3863.