Why Nonprofits Will Lead the Way in
By Drummond Pike and Chris Herrara, Tides
Internet technology has become the global
solution. How do you sell cars? How do you buy stocks? How
do you earn a college degree? Whatever the question, someone
is sure to tell you, "The answer is on the Web."
And much of the time, that is correct. The
Internet has connected more people with more information--and
with one another--faster than any other medium in history.
In the United States alone, more than 110 million adults
are now connected online.
One of the latest beneficiaries of this trend
toward web-based solutions is the world of philanthropy.
Although online giving--or e-philanthropy--is still relatively
new, already there are thousands of websites dedicated to
charitable giving, community foundations, and donor advised
funds. Many are excellent resources for finding philanthropic
options, researching issue areas, and locating worthy grant
recipients. But for the most part, these sites have focused
on how to make a contribution online, as opposed to more
fundamental questions like, "Where do you want to donate
your money--and why?"
The Donation Industry
In Silicon Valley, developing mechanisms for giving money
online has been viewed as an instant growth industry. Fueled
by research suggesting that the number of potential online
donors already surpasses the number of donors that could
be reached through direct mail marketing, there has been
a rush to develop instant donation services and launch charitable
portals online. Besides that, any reticence about conducting
business over the Internet seems to be vanishing: Internet
spending topped $24 billion last year.
With all of this online commerce and consumer
readiness to accept it, e-philanthropy would seem to be
a no-lose proposition. Yet, in the past twelve months, there
has already been a rapid winnowing in the field of e-philanthropy,
just as in the e-commerce arena. More than a few well-heeled,
splashy websites--such as Donor.net and Charitable Way--which
were specifically designed to collect and distribute contributions
to charities, have failed to produce. Similar sites aimed
at this market are already looking for a way to get out.
They are finding the "donation industry" too expensive.
Their clients are finding it ineffective.
Why has the market failed to properly fill
this area of cyberspace that has so much potential? One
major reason is that the wrong people have been attempting
to do it.
Early on, the charitable giving space on the
Internet was ceded to commercial interests. Venture capitalists
plugged significant money into such endeavors, expecting
an eventual cash return. The business models varied, but
the concept was the same: Make money from other people's
philanthropic intentions. This has not been successful largely
because nonprofit organizations--which are the engine driving
the "donation industry"--are based on the economic
model of sustainability, not profits. More importantly,
they are based on values.
Internet Connections: High Speed vs. High
Organizations that have prior experience in their specialty
area find the jump to the online world much easier than
those that don't. For example, retailers who know how to
run a store, sell merchandise, and stock a warehouse are
going to be better at selling goods online than someone
who has a great website but no retail experience.
The same is true for philanthropy. Giving money to an organization
is a very personal action, and philanthropies and nonprofit
organizations know this. Charitable and mission-driven institutions
raise money because they make connections with people--connections
based either on issues or on personal relationships, or
The Internet can foster and broaden those
connections, via e-mail contact, targeted information, and
technical resources--but the Internet cannot replace those
connections. They must come from a sense of shared values.
Instead of creating connections grounded in
shared values, online portals have taken the shopping mall
approach, focusing on the fiscal bottom line, at the expense
of personal values and human connection. The result has
been donation portals with little or no identifiable character
or vision, other than the ability to accept credit card
numbers and search through thousands of nonprofits. In the
United States alone, there are more than 700,000 registered
nonprofit public charities. "One-size fits all"
websites do little to screen potential donors and help them
connect to the groups that are right for them.
While some potential online donors relish the idea of researching
the track record, political history, and financial status
of nonprofits, many do not. Consequently, there needs to
be more screened content on e-philanthropy sites. In addition,
the sites themselves should be driven by a commitment to
an organizational mission--or they should be based on clearly
articulated issues and positions. Donors need to feel that
they can trust, support, and believe in groups that will
receive their donations.
Thus, the challenge is set: to provide online
donors with information about effective nonprofits that
match their values. This needs to be available from easy-to-use
sites that have a defined character (what some refer to
as "an attitude"). Clearly, the need for strong
nonprofit voices and service providers amidst this sea of
dot-coms is vital if online donors are going to fulfill
their great potential.
One example of an online philanthropy portal
site that is answering that challenge is Give For Change,
a partnership between Working Assets and eGrants.org, a
nonprofit Internet foundation created by Tides Foundation.
On the Give For Change site, donors are presented with a
selection of nearly 400 organizations spanning eleven different
interest areas. What all the organizations have in common
is a commitment to social change. All are carefully screened
by eGrants.org, which accepts and processes all donations
made through the site.
This gives donors the opportunity to make
well-informed giving decisions and ensures that their dollars
go to groups that are making a difference. For nonprofits,
the site offers the hassle-free opportunity to be included
in a screened, giving catalog, along with other like-minded
organizations working for progressive social change--rather
than being lumped together with the 700,000 other 501(c)(3)
organizations in the United States.
This kind of site has not been created by
for-profit organizations because for-profit entities have
lacked the value commitment and the sustainable economic
model needed to make such sites work. It is only through
organizations clearly rooted in the nonprofit sector and
firmly grounded in their own values that the true potential
of online philanthropy can be fully realized. [MtM]
Drummond Pike founded Tides Foundation in
1976. He currently serves as president of Tides Foundation,
Tides Center, and eGrants.org. He co-founded and served
as associate director of the Youth Project in Washington,
D.C. and as executive director of the Shalan Foundation
in San Francisco from 1976 to 1981. He is one of the founders
of Working Assets.
Christopher J. Herrera is director of communications
for the Tides Foundation. Before joining Tides in March,
2000, Herrera was part of a communications firm working
exclusively with nonprofit organizations. For the past ten
years he has directed communications and public education
programs for civil rights and other nonprofit organizations.
Tools for Online Giving
Foundation Research Tools
Search engines are ground zero for any Web research. Google
is one of the simplest (with no brightly colored advertisements
cluttering the screen) and one of the most powerful. Tip:
Use quotation marks for precise searches, e.g. "National
Resources Defense Council."
This site has a database of detailed information on more
than 640,000 nonprofit organizations. It can generate a
report on each organization, including mission statement,
financial data, key staff bios, and IRS 990 reports.
The Foundation Center
An excellent online directory of more than 1500 foundation
websites, including a special section on community foundations.
This site also offers useful additional links and a great
Council on Foundations
This is the umbrella association for most foundations in
the United States and is another good resource for information.
Online Giving Sites
This nonprofit site connects people with charities and causes
that match their values. It provides resources, services,
and tools to donate money, time (volunteering), or goods.
A nonprofit, Internet foundation, this site accepts online
donations to nonprofit groups that are working for positive
social change. eGrants allows donors to fund social change
organizations through portal sites, as well as through direct
links to the nonprofits themselves.
Give For Change allows donors access to hundreds of progressive
nonprofit groups. The site is part of WorkingForChange,
a comprehensive website offering resources for people with
progressive values. Members and non-members alike can speak
out on urgent issues, make a donation, volunteer their time,
or listen to online RadioforChange programming.
Funded by the AOL Foundation, Helping.org is one of the
nation's largest donation portals, helping people find volunteer
and giving opportunities.
News and Information Services
Nonprofit Online News
This site offers current information about and for the nonprofit
sector. A weekly e-mail subscription is also available.
The Chronicle of Philanthropy
The Chronicle of Philanthropy is the leading print publication
on mainstream philanthropy. Though the website offers some
of the publication's articles, it requires a subscription
for many of its best.
Philanthropy News Network
This site is another good source for finding giving opportunities
and news about the philanthropic community.
A new, informative website and charitable foundation, established
to foster the use of the Internet for philanthropic purposes.
This site provides nonprofit groups, social service agencies,
and individuals a place to tell others about what they are
doing to serve their community, who or what they represent,
and what they want or need.
The Nonprofit Matrix
An excellent guide to the broad world of online giving and
how nonprofits and Internet-based services are connecting
in cyberspace. This site offers the latest on current thinking
and services in e-philanthropy.
Services to Nonprofits
The Impact Fund
The only foundation dedicated to providing funding, technical
assistance, and representation for complex public interest
litigation in civil and human rights, environmental justice,
and poverty law.
For years, San Francisco Bay Area nonprofits have benefited
from the efforts of Compumentor, an intermediary that connects
nonprofit organizations with willing technology volunteers.
The new Techsoup brings Compumentor's best thinking to the
Web, making it available to nonprofits anywhere. Excellent
resource for nonprofits trying to figure all this out.
Originally founded by the Rockefeller Family Fund to help
its grantees use technology tools, Techrocks now helps advocacy
groups better utilize the Internet for their work. Cutting
Billed as an "online networking site for the environment,"
One Northwest takes a regional, issue-based approach to
e-philanthropy. Nonprofits can use the site to share information
and contacts. More than 1200 Northwest conservation groups
are connected through the site.
The mission-based Tides Foundation partners with donors
to fund progressive social change organizations. It also
creates funding collaboratives--driven by donor involvement--targeted
at vital issues that are typically underfunded by U.S. philanthropy.