High-Tech Hopes Meet Reality

Slow start for online giving leads to new Internet approaches

More than a dozen Internet companies that served nonprofit groups have gone out of business. High-technology donors whom many charities had been wooing for major gifts have sustained major stock losses. Virtually no charity has persuaded more than a tiny share of its donors to give online.

Such developments have prompted the philanthropic world to take an increasingly sober view of the Internet’s influence on its future. But signs of promise are emerging:

• While a Chronicle survey of big charities found that none are raising more than 1 percent of their gifts online, e-mail messages and Web pages are helping groups strengthen their ties to donors. One e-mail exchange helped lead to a $40,000 gift, delivered in person, for a university.

• Lessons learned from the implosion of many dot-com ventures — including Charitableway, which closed in March despite having received $43-million from investors — are prompting the remaining businesses to shift strategies and add services.

• A new breed of companies and nonprofit technology groups is making it possible for charities to lease software via the Internet. The ventures promise to help some charities solve technology frustrations, but first they must prove that they can be trusted with sensitive information — and that they have the money and staying power to survive.

• Technology entrepreneurs like Steve Kirsch may have fewer dollars to give away because of the drop in technology stocks, but they are no less determined to make their mark on philanthropy. Mr. Kirsch has been reminding his peers that charities are likely to face difficult times because of the economic slowdown.