THE BLOG
11/18/2013 04:53 pm ET | Updated Jan 25, 2014

Do eCommerce Giving Programs Effectively Raise Money for Charity?

Hey, the idea behind craigconnects is giving the voiceless a real voice, and the powerless real power. I see it as everyone doing some small, or big, part.

One way to do this is by giving back via purchases and a few key initiatives. Organizations like We-Care.com team up with merchants and give a percentage of the proceeds to charity. We-Care works with more than 2500 online merchants, and it's the merchants who choose what percentage of proceeds to donate (ranging from 1.5% to 15% of transactions). Participation doesn't cost anything for the organizations, and there is no extra charge for the person who is shopping. Something that's really useful on We-Care is their toolbar plugin. You can download a reminder that will pop up each time you're shopping on a site that will give some money to your cause.

Amazon just started doing something similar to We-Care, but aren't giving as much (just 0.5%). They're calling it AmazonSmile.

Perla Ni, CEO of Great Nonprofits commented on Amazon's new giving program, and what she calls "interesting benchmarks":

0.5% is an interesting percentage. Amazon's revenue was $17B last quarter. It would be $80M/quarter if everybody who purchased something took it up. Even though it doesn't cost anyone to do it, say 20% of users sign up, so that would be $20M/quarter. That would be about $80M/year donated to nonprofits. Google gives about $100M/year and Wells Fargo gives about $300M/year.

Efforts like these are making donations an every day thing, and this way, according to Perla, "nonprofits may see donations throughout the year, rather than just at the end of the year for tax-deductions." Perla does voice a concern though. She says: "the biggest potential downside I see is that it may cannibalize individual giving -- 'oh, I don't need to give on my own, because I've already done it just by shopping.' It may make shopping replace giving."

We also contacted Ken Berger, President and CEO of Charity Navigator, about AmazonSmile to get his opinion. He said that Charity Navigator will be looking into the project to see if Amazon will use their API to display the Charity Navigator ratings.

Ken also shared with us that "shopping portals that give money to charity usually don't generate enough revenue to make a big impact on an individual charity's bottom line. One of the problems is the change of behavior required -- same as with Amazon since customers will have to start their purchase process on a different website than the regular Amazon site. However, the scale of Amazon makes this a unique proposition with the potential to make a big impact on a charity's bottom line."

I think the most helpful thing you can do to make sure you're giving to the good guys is to check out Guidestar, Charity Navigator, and Great Nonprofits (like Yelp for nonprofits, with user reviews). These will help you select good, effective nonprofits.

GNP

I support some nonprofits, and some not (more on that here). I make sure to look into a charity before I donate to avoid giving to one of America's 50 worst charities. It's useful to be able to give back to orgs that I support via purchases that I'm already making. Although, I don't think that shopping should replace giving to an org when you believe in their cause.

How are you giving back, if you're able?