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The Boston Globe OnlineBoston.com
Boston Globe Online / Giving

Net gains

Online giving is still in its infancy, but donors flock to the Web in crisis

By D.C. Denison, Globe Staff, 11/18/2001

(Illustration/ Boris Kulikov)

Change of heart
It used to be we worried about other things, like what was on the racks at the mall. Now we're not buying as much, but we are giving money away like mad.

Keeping faith
A unique mission to join secular foundations with black churches is boosting services to some of Boston's poorest neighborhoods.

Market pressures
Endowments are having one of their worst investment years in a decade. Here's how people responsible for investing the money are managing.

Guidance for giving
The tremendous creation of wealth that occured during the 1990s has many individuals seeking guidance for how they give.

Education collaboration
How the Boston public schools and the local business community finally got working together.

The new Boston
It's not always easy to get residents who work in Boston and identify themselves with the city to abandon their longtime patterns of giving.

Corporate outsourcing
Donor-advised funds have become wildly popular with individuals over the last decade. Now some companies are trying them, too.

The nonprofit 100
A ranking of the top Massachusetts nonprofits by public support, revenue, expenses, and assets.

They are everywhere on the Internet now: banners, buttons, and hyperlinks urging us to ''Donate Now!'' Since Sept. 11, these charitable requests have been harvesting funds with impressive efficiency. More than $106 million has been raised by the online community since the terrorist attacks.

This latest wave of Internet fund-raising has also benefited from a number of new advantages. For example, low transaction costs allow organizations to pledge that every penny donated will go to the designated charity. Internet connectivity gives donors a way to bypass clogged telephone switchboards during telethons and fund-raising events. And rapid Web site development tools and procedures gave charities the ability to start collecting funds within hours of the attacks.

Yet, even as Internet donations continue to pour in, many fund-raising professionals are wondering if Internet-based giving will have a sustained impact on the way charities and nonprofits raise money.

''It's important to realize that while $100 million sounds like a lot of money, online giving is still a very small piece of the overall pie,'' said Mark Rovner of Craver, Matthews, Smith & Co., a fund-raising firm in Arlington, Va.

In 2000, for example, individual giving in the United States added up to $152 billion; if you add donations by foundations and corporations, the total rises to $203 billion, which puts online giving as a percentage of overall giving at less than one half of 1 percent.

The reason for online giving's relatively small slice: ''There is still significant resistance to giving online by traditional donors. For many people, direct mail and telemarketing still work. Their view is, if it ain't broke, don't fix it.'' The recent spike in online donations, Rovner said, matches a particular strength of online giving: crisis response.

''The earliest successes for online giving happened in the late '90s, and they were sparked by the war in Kosovo, Hurricane Mitch, and the earthquake in Turkey,'' he said. ''The Red Cross, which is all about rapid response, was able to make online giving work.''

But will the rise in Sept. 11-related online giving introduce the idea of Internet-based giving to an entirely new class of donors? Rovner isn't sure. ''It's true that the single biggest predictor of whether someone will give online is whether they've done it before,'' he said.

''And because of Sept. 11, probably hundreds of thousands of new people have now made a donation online. So it will make an impact, but my guess is that the online giving's biggest impact will remain in the crisis area.''

One reason for online giving's success with disaster-related fund-raising, Rovner said, is that it needs the focused attention a disaster inspires.

''All of the big online fund-raising success stories have grown out of massive publicity,'' he said. ''You need to have celebrities and high-profile events really pushing people to a Web address. In the case of LibertyUnites.com, for example, you had the president of the United States repeating the URL from a world stage at the White House. That's powerful.''

This increased visibility, however, can be seductive - and potentially disasterous - for fund-raisers, Rovner said. Recently, he's heard a number of clients float the idea of skipping direct mail in favor of an online campaign.

''That's just plain nuts,'' he said. ''There just aren't enough people online. You wouldn't stop fishing in the Atlantic in favor of a small pond in your backyard, would you?''

Emerson Health Care Foundation, the fund-raising arm of Emerson Hospital in Concord, still hasn't started fishing online, and is in no rush to do so. The reason, significantly, has to do with more than simple numbers.

''We do have a Web site for disseminating information about the hospital, but after considerable debate we decided not to enable donations online,'' said Rhoda Taschioglou, vice president and executive director of the foundation. ''The reason was that we were not able to ensure that our list of donors would remain confidential. We're a community hospital, and we have a long-term relationship with our donors, and there's a high level of trust there. We needed a very high comfort level with the security, and so far we haven't gotten that.''

Taschioglou wanted assurances, for example, that the donor list would remain under the foundation's control, even if the Internet provider was sold. When prospective providers could not give her that guarantee, she put all online fund-raising projects on hold.

She does not believe the foundation's fund-raising has suffered from the lack of an online presence. Within a month of the terrorist attacks, for example, Emerson went through with its annual direct-mail appeal. ''The response was the fastest we've ever had,'' she said.

The Emerson approach is in synch with the advice Tom Subak gives his clients. Subak, cofounder of The E Organization, a Boston Internet strategy firm that consults with nonprofit organizations, does not believe in starting out with the online strategy. ''The Internet, by itself, is not a fund-raising campaign,'' he said, ''just as a toll-free number is not a fund-raising campaign. You can't set up an 800 number and expect the phones to start ringing and the money to come in. The same is true of an Internet donation site.''

Online campaigns for Sept. 11-related charities have succeeded, Subak said, because they have benefited from the publicity that comes with a major news event.

''People were actively looking for a way to give,'' he said. ''That's very unusual.''

Most charities do not have that advantage.

''If an environmental group, for example, wants to raise money,'' Subak said, ''first it has to identify whom to market to, then decide what the message is, then figure out how to motivate these people to give. At that point, finally, it can address the question of how to reach them, and whether online makes sense ... an online donation site is not enough.''

A nonprofit must also examine whether its target audience is online, he said. ''It's true that more and more people are getting online every day, but there are still groups that you probably shouldn't target online. Many church groups, for example, are very comfortable passing the basket on Sunday. There would be very few reasons for them to go online to give.''

Online giving, Subak said, will grow slowly, as nonprofits add it incrementally. ''The focus of a fund-raising campaign should always be on the message, and the motivation, and the constituency,'' he said. ''At that point you can add online giving as another way to donate, not as a replacement.''

''One of the biggest mistakes a nonprofit can make,'' he added, ''is to say, `The Internet is neat - now that's how you have to give to our charity.'''

D.C. Denison can be reached by e-mail at denison@globe.com.

This story ran on page F2 of the Boston Globe on 11/18/2001.
© Copyright 2001 Globe Newspaper Company.