U.S. Nonprofit Groups Turning to Cyberspace

Charities and other nonprofit groups in the United States areturning to cyberspace to raise money.

What attracts many nonprofit groups is the prospect of a cheap,easy way to reach an estimated 57 million Americans with access tothe World Wide Web.

Many nonprofits originally set up Web sites to spread theirmission and offer online activism. Now they are adding encryptiontechnology that makes it safer to send credit-card information overthe Internet.

Also, they use the techniques of electronic commerce to acceptonline credit-card donations and conduct upscale auctions over theInternet.

The philanthropic spinoff of e-commerce is still in its infancy;no one tracks how many nonprofits are fund-raising online, or howmany money they are bringing in. Yet a growing number of nonprofitsregard the Internet as a way to reduce their reliance on expensivefund-raising methods like direct mail and phone banking, accordingto Knight Ridder Newspapers.

GuideStar is a nonprofit online service that lists informationand financial data for 40,000 American charities and non-profitorganizations.

The trend has spawned a cottage industry of consultants andcompanies that create or host secure Web sites for the non-profits-- sometimes in exchange for a cut of the contributions.

CharityWeb, a California-based startup which has signed upcontracts with seven agencies, for instance, charges full membership99 U.S. dollars for setup, plus 2.5 percent to 5.5 percent pertransaction.

The most successful online fund-raisers are philanthropy'sbiggest brand names, such as the American Cancer Society and theAmerican Red Cross.

The American Cancer Society began raising money in 1995 throughan online form that could be downloaded, then faxed or mailed. Thislow-tech way trickled 3,000 dollars in each month. Onlinecontributions have grown fourfold since the nonprofit added securetransactions to its Web site.

The American Red Cross launched online contributions in July 1996and has raised about 128,000 dollars since then. During the Midwestfloods of 1997, contributions shot up to 300 monthly, up from a moretypical 25 to 40 per month.