Philanthropy ‘Portals’ Pose Major Challenges for Charities

To the Editor:

Congratulations to The Chronicle and Holly Hall for the in-depth article on charity online portals (“A Brave New World of Giving,” June 15).

The article identified many of the issues and challenges that the rapid rise of “e-philanthropy” poses for all of us in the charity world. However, it also clearly reinforced my belief that charities, for the most part, do not understand the world of e-commerce and, more important, do not understand the potential issues and concerns being raised in this arena.

First and foremost, we all need to understand that many, if not most, of the charity portals online are for-profit endeavors pure and simple. While they may very well also have — or profess to have — noble intentions, they are set up and funded with the idea of making money.

The concept of e-commerce in its most basic sense is simple. The Internet is a wonderful vehicle to reach large numbers of people and provide them with some type of product or service for a profit. The key to “e-philanthropy” is that we, the charities, are the product that’s being provided for a profit. Without the good names and reputations that we have worked so hard to build, these sites would have no product to offer.

The second key point here is that we must all recognize the value of our brand names. The fact that many of these sites list charities and accept contributions on their behalf without their permission is incomprehensible to me — first, because the sites feel they have the right to violate our trademarks, and second, because we allow them to do so.

How many charities would allow a company to place their name on a product without their permission even if the company then gave some small amount of money to the charity? We are in fact lending our good names to these sites completely free of charge so that they can pursue their business model.

If this isn’t troubling enough, consider that some enterprises are collecting revenue primarily not by imposing a fee on donations but by selling advertising on their site. Now these sites are not only using our names for their own business purposes without our permission, but they are willingly selling association with our valued brand names to any advertiser that might come along.

Another key concept in e-commerce is the value of collecting information about the people who visit or do business at any given site. We have no knowledge what some of these sites may be doing with the data they collect from people who think they are simply supporting our good causes.

The point is that we all should very quickly come to understand that, without our charities, these businesses cease to exist. Therefore, as the provider of the product necessary to fuel their business, we should be setting the standards and rules in this arena, and should be at least equal partners with these sites rather than names on a list.

This leads to the most basic principle of all: We, the charitable community, should insist that any sites that wish to seek donations on our behalf must first obtain our permission. This is key to our ability to negotiate certain standards of operation and conduct for those who wish to be in this arena.

Some argue that lists of charities, particularly the famous Internal Revenue Service list which is the basis of so many of these sites, are public records. I have no quarrel with any site that wants to provide this information on that basis.

But accepting contributions on our behalf is not, in fact, a right. The legal precedent appears to be that any charity can accept gifts on behalf of other non-profit entities so long as the gift is passed on as directed by the donor. It also seems to accept that “reasonable” fees may be associated with passing along such gifts. Therefore, each of these sites has allied with or set up a charity in order to meet these criteria. We need to send a strong message to these sites that we will “opt out” en masse from sites that do not adopt or accept a permission-based approach. And if only a very small percentage of all charities — but those who draw by far the most in contributions — would do so, it would effectively put a site out of business.

We cannot be lulled into thinking that this is just “free money” that will come to us if we sit back and do nothing. The cost of this thinking will definitely be the loss of control of our fund-raising future on the Web, but could be much greater in terms of loss of public confidence if unscrupulous providers go unchecked.

There are, and will continue to be, sites that understand these concepts and truly want to partner with us for our mutual benefit. But we need them to be partners, to be accountable both to donors and to us, and to share with us in protecting the image of our community as well as the valued images we have all worked so hard to create for our charities.

While the money, as The Chronicle so aptly pointed out, is not great now, it may well be in the future. The Internet moves more quickly than anything we have ever seen before. We need to move equally quickly to be sure to maintain control of what may be one of our most important avenues of raising funds within a relatively short time.

I believe that we can do this if we act in a coordinated manner and rapidly.

First, we should all adopt the policy that sites must gain our permission before they can accept contributions on our behalf.

Second, the American Association of Fund Raising Counsel, the American Society of Association Executives, the National Charities Information Bureau, and the National Society of Fund Raising Executives as well as other appropriate groups should adopt a similar standard.

And third, we as the charity community should find a way to exchange information about the providers in this business that are truly interested in working with us in partnership and those who not only recognize, but will respect, our ownership of our brands.

Daniel W. Snare
President and Chief Executive Officer
Community Health Charities
Washington

To The Editor:

I was disappointed after reading “A Brave New World of Giving” (June 15). It not only misleads the reader; it gives a very narrow view of raising funds via the Internet.

We have only just begun to see the potential of online contributions. Granted, a third-party Web site, or the “philanthropy portal,” can create a confusing situation for a prospective donor. It forces the prospect to use a high-maintenance approach to do what should be a simple task. However, there are talented e-commerce firms that enable non-profits to receive online contributions on the non-profit’s own Web site. This approach benefits the non-profit by bringing people to its Web site, where it can provide additional information about the mission and programs offered.

Online contributions should be viewed in the same light as direct-mail campaigns. As most experienced development officers know, direct mail is not so much fund raising as it is donor acquisition. A well-managed development office will separate the donors from the prospects for follow-up. It is not unusual for a direct-mail prospecting campaign to fail to break even, let alone raise money. However, as long as it is conducted with the intent of acquiring donors, it can be a worthwhile investment.

The same can be said for online contributions. Once a contribution has been received, it should be handled as the start of a relationship, with the appropriate thank you.

As a consultant, and an instructor of fund raising at a major university, I have had the opportunity to address the subject of online fundraising with great success. Yes, it is going to be a big part of all of our futures. Yes, we should all examine the best approaches for our respective organizations. And yes, taking time to find the right e-commerce firm is imperative.

Look for a firm that offers the opportunity to make an online donation directly from your Web site. With this option the donor does not have to weed through a plethora of organizations aggregated on a company Web site, and can save time. The companies that offer to place your organization on their site are simply kidnapping your donors.

To paraphrase the late Hank Rosso, founder of the Fund Raising School at Indiana University and one of the great teachers in the field of philanthropy, “Get the gift, renew the gift, increase the gift.”

This was true in the late 20th century, and the same holds true in the new digital economy.

Robert Schwartzberg
Principal
SbergDev Fund Raising Consulting
McLean, Va.