What Gives at E-Shop Sites? You
It sounds too good to be true, like eating pounds of chocolate mousse and losing weight at the same time: Give to your favorite charity, but don’t bother to reach into your pocket for the extra cash or to whip out your checkbook or credit card. It won’t cost you a thing.
Consumer watchdogs’ ears perk up at come-ons like that. But in the case of Web shopping sites that promise you can have your stuff and give too, so far nobody seems to have much bad to say. As a matter of fact, consumer watchdogs--including the Better Business Bureau and the National Charities Information Bureau--don’t even have any policies or warnings that specifically target online shop-and-give sites. Rather, some are touting these virtual malls as another avenue for nonprofits to reach donors.
Audri Lanford, co-editor of Internet Scambusters, a consumer Web site and electronic newsletter that alerts Web surfers to online fraud, seemed taken aback when asked about shop-and-give sites.
“We haven’t done an investigation into these kinds of sites. Mainly because we haven’t heard any complaints about them,” she said.
These sites, which seem to be popping up daily as the holiday shopping and giving season approaches, promise that a percentage, typically about 5%, of what you spend on purchases made through them goes to the charity of your choice.
The Web sites often include lists of major national charities that they deal with--such as the American Red Cross, Big Brothers-Big Sisters of America and the World Wildlife Fund--and “mall” areas, where they group merchandise that can include books, music, office supplies, health and beauty aids, computer software and hardware, clothing, food and toys. Prices are usually comparable to those on non-charity sites.
Usually, for for-profit businesses, the sites act as liaisons among vendors, shoppers and nonprofits. Some sell banner ads that will be viewed by the shopping hordes. Others make deals with the charities--in return for bringing people to the nonprofits, the shopping sites are paid a fee or get a cut of what the charity earns. A rare few work strictly as volunteer operations and send 100% of what they make to nonprofits. But all admit that this e-philanthropy space is becoming highly competitive as more shoppers go online and become more comfortable with the whole Internet shopping experience.
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What may be spurring the growth of these sites is a trend explored in a September study conducted by the Mellman Group for Craver, Mathews, Smith & Co., a company that provides direct marketing and other services for nonprofits. The poll, which looked at 800 adults with online access, found that about 44% had visited a nonprofit Web site but that only 7% had made donations online. However, the study also found that “planned effort” is needed to lure online users to charities’ sites.
Shopping can help provide that kind of bait.
This expectation of growth in online giving convinced one strictly nonprofit shopping site to enter the arena as a moneymaking proposition.
Tracey Pettengill, chief executive of 4Charity.com, is taking the former purely charity site into the competitive moneymaking fray. 4Charity was started by Pettengill and a bunch of friends while they were MBA classmates at Stanford a year and a half ago, with the team volunteering nights and weekends to benefit the Special Olympics.
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“This summer we looked at the site,” Pettengill said, and in the face of growing competition, 4Charity had to remake itself. Otherwise, “we were going to get knocked over by all those for-profit sites.”
Givers who shop these sites need to do their homework. With the shop-and-give sites, Bennett Weiner, vice president and director of the Council of Better Business Bureaus’ Philanthropic Advisory Service, suggested that consumers should demand a prominently displayed disclosure statement that tells how much of a purchase is going to charity.
“It should be upfront,” Weiner said. “You shouldn’t have to search for it.”
And, he said, “don’t assume that the money is going to the charity immediately--they may have to meet a minimum, and some sites disburse money quarterly--or less often.”
Daniel Langan, director of public information for the National Charities Information Bureau, said he knew of at least one charity shopping site that had gone out of business earlier this year. But on the other hand, he noted that recent White House hearings encouraging citizens toward philanthropy had included panelists from GreaterGood.com, which he said earlier had come to the bureau with a proposed “bill of rights” for online donor-consumers.
Langan suggested that shoppers look for secure Web shopping sites and privacy policies that protect your information from being sold or shared with other vendors.
“Individuals--and charities, too--should have a clear way to have questions answered or issues resolved. Anybody could put a charity’s name on a Web site.”
In an effort to assuage consumer concerns, GreaterGood.com works strictly with charities that have registered and signed agreements with the Internal Revenue Service, said Katherine James Schuitemaker, its executive vice president of communications. The company, founded in August 1998, launched its Web site in February.
“Each nonprofit on our site we have signed agreements with. We’re using names and logos with the charities’ permission,” James Schuitemaker said.
On the other hand, some sites’ approach to charities is more grass-roots, and that appeals to other types of shoppers. Users at iGive.com, for instance, can propose small local charities that may not be registered with the IRS--scout troops, neighborhood animal rescue groups and even the 24 Carat Ferret Rescue and Shelter in Las Vegas--to be the beneficiaries of their shopping.
