Charity Malls Allow Painless Online Donations

By Katherine Reynolds Lewis
c.2008 Newhouse News Service

Debating whether to send flowers or make a donation to Mom's favorite charity for Mother's Day?

Now you can do both.

Web sites with names like Benevolink and BuyforCharity use your online shopping to benefit philanthropic organizations, without costing you a cent more.

Here's how it works: You sign up with the site and designate a charity to receive cash. Most sites, known as charity malls, will let you enroll a new organization if your favorite isn't already listed.

Then you visit the charity mall when you shop online, clicking through to your favorite retailer. The merchant gives a percentage of your purchase to the mall, as a referral fee. The charity mall passes on a portion of that fee to the group you designate.


"It's a creative and fabulous way for people who can't afford to make big donations to give back really easily,'' said Sue Matthews, whose Scarsdale, N.Y.-based nonprofit Tay-Bandz funds pediatric cancer research. "It takes two minutes to sign up.''

Tay-Bandz supporters contribute using iBakeSale, in memory of Matthews' daughter Taylor, who died in February at age 16.

One catch: You won't get a tax deduction, since you didn't pay anything above the retail price of the item you purchased.

Here are some tips to figure out which charity mall is best for you:

— Pick one that includes your favorite online stores. If you prefer a wide variety of choices, you may want to select a mall with several hundred retailers, such as Benevolink, iGive or GoodShop.

— Compare your favorite stores at different charity malls, and you'll see a great disparity in the percentage of your purchase price that will be donated.

For instance, a $50 purchase at Target.com would reap $3 through Benevolink, a 6 percent donation, but only 75 cents through GiveBackAmerica. A $100 pair of Adidas.com sneakers would bring in $7.50 through BuyforCharity, but only $2.80 through iGive, according to rates listed in late April.

The amount of the donation reflects the size of the retailer's referral fee and how much of the fee the charity mall keeps for overhead and profit. All the malls mentioned in this article are for-profit companies.

BuyforCharity passes on 75 percent of referral fees, and hopes someday to forward 100 percent, with other revenue, such as advertising sold on its site, paying for operations, said Brian Freedman, president of the Austin, Texas-based company.

Ithaca, N.Y.-based MyCause forwards between 60 percent and 100 percent of referral fees. "A few vendors gave such a small commission that we were embarrassed to shrink it any more,'' explained MyCause owner Brendan Wyly.

That figure is 85 percent for Benevolink, about 80 percent for iBakeSale, 60 percent for GiveBackAmerica, and 50 percent for GoodShop, site representatives said.

An iGive representative declined to say what percentage it redirects to charity.

But a Newhouse News Service comparison of seven charity malls indicates that the iGive number is less than 50 percent. Looking at 30 selected retailers, iGive almost always offered a lower percentage than the 50 percent donated by GoodShop. The comparison confirmed that Benevolink passed on the highest percentage of the referral fees, for rates on the Web sites in late April.

— Consider whether you'll remember to visit the charity mall before shopping, and how comfortable you feel disclosing your personal information.

Most of the sites require you to visit their home page first in order to generate contributions.

But some track your online shopping automatically and credit your charity for any purchases.

IGive and iBakeSale offer software you can download that displays a pop-up window when you visit a participating retailer, letting you know what portion of your purchases there would go to your charity. GiveBackAmerica is launching a similar product shortly, President Craig Neilan said.

"People are busy and they don't remember'' to visit the charity shopping site first, explained Seth Sarelson, founder of New York City-based iBakeSale.

Sites that don't use pop-up software say it is too intrusive for shoppers and may alienate merchants reluctant to be subjected to automatic fee-vacuuming.

"That's frowned upon by the industry,'' said Ken Ramberg, co-founder of GoodSearch, which launched GoodShop in November. "Our reputation is way too valuable to us.''

GoodShop and MyCause are unique in letting users' shopping count toward their favorite charity without collecting their personal information.

"We don't gather any customer information; you're completely anonymous to us,'' said MyCause's Wyly.

— There are other options for getting rebates on your shopping.

Sites like Ebates give cash back for online shopping, which you can then give to charity yourself. These donations are eligible for tax deductions.

You can also look at affiliate programs connected with your bank, favorite magazine or local newspaper, which generally offer points or cash back for in-person shopping as well as online.

They may have special offers tailored to your preferences, negotiate better commissions from retailers, and pass through a larger portion of those revenues, said Jonathan Silver, president of Affinity Solutions, a New York-based provider of such programs.

"The limited appeal of (charity mall) Web sites is that it doesn't acknowledge that the consumer does a lot of off-line shopping,'' Silver said.

— Don't get carried away by doing good and buy items you don't need. Your charity would rather you give a $10 donation than buy a $10 shirt that nets a 40-cent donation.

— Make sure the site offers customer service numbers and e-mail addresses, and is unlikely to go out of business.

Beth Bowers, 45, of Cassopolis, Mich., signed up with a site and shopped away happily, but when she tried to cash out there was no response from customer service. It took almost a year for her to wring free the $35 she had accumulated — and now the site is defunct.

"I would check a little bit further next time before I signed up on one,'' Bowers said. Now, she uses well-established programs like Ebates and MyPoints.

— Think about whether you want to track how much you, or others, are raising for charity.

Some charity malls, such as iGive and Benevolink, offer robust tracking for both the individual and the nonprofit, as well as forums and other community-building services. Others are more bare-bones.

The tradeoff is that such extras cost money that could otherwise go into your organization's coffers. It's no coincidence that the flashiest sites tend to offer lower commissions.

And all the sites share one downside: The dollar amounts raised can be very small.

"At the end of the day it's not a whole lot in terms of the charity's total revenue,'' said Sandra Miniutti, spokesperson for Charity Navigator, a nonprofit based in Mahwah, N.J., that evaluates some 5,200 charities. "It shouldn't be a substitute for writing a check to a charity.''

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To shop for charity, check out:

Site ...................... Percent of .... No. retailers

........................... fee donated .................

www.goodshop.com .......... 50 ............ 600-plus

www.igive.com ............. n/a ........... 680-plus

www.benevolink.com ........ 85 ............ 440-plus

www.buyforcharity.com ..... 75 ............ 145

www.givebackamerica.org ... 60 ............ 200-plus

www.ibakesale.com ......... 80 (approx) ... 200-plus

www.mycause.com ........... 60-100 ........ 34

(Ranked by March 2008 visitors, as reported by compete.com)

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Some tips for fundraisers interested in these sites:

— Be patient. It takes time to accumulate significant revenue.

— Regularly remind your supporters to shop through the site.

— Give incentives, like a prize for the person who raises the most money.

— When choosing a site, consider how much support and what "extras'' it offers to charities.

This article was originally published on Monday, April 21, 2008.