Down and Out
August 1, 2001 Todd Cohen
The e-philanthropy roller coaster is picking up speed.
GreaterGood.com, the Seattle-based online mall that lets shoppers donate part of purchases to charity, has shut down and is looking for a buyer.
Also seeking a buyer is CharitEx, a New York-based maker of software to help charities manage cash and donor relationships.
And, eContributor.com, a Virginia-based provider of online fundraising products for nonprofits and political advocacy groups, has filed for Chapter 11 bankruptcy protection against creditors and agreed to be purchased by Votenet Solutions, a Washington, D.C., firm that provides tech services and products to public policy and political groups.
Lacking enough cash to sustain itself, GreaterGood.com has laid off all 26 of its remaining employees and is looking at options to sell the site, said co-founder Paul Goodrich, a managing director at Seattle-based Madrona Venture Group, a GreaterGood.com investor.
“The softness in the advertising market has been a challenge,” said Goodrich, a former board chairman at GreaterGood.com, which secured more than $20 million in investment since its founding two years ago. “It costs more money to operate the site and cover expenses than we were able to generate in revenues.”
CharitEx, which raised between $1 million and $2 million since its startup in April, 2000, failed to secure outside financing and complete a deal to buy eContributor.com.
CharitEx had reduced its staff from 11 full-time employees in January to almost an entirely part-time crew, and was looking for a suitor of its own, Peter Martino, the company’s CEO and only full-time employee, said as The NonProfit Times went to press. “It’s a very difficult time,” Martino said. CharitEx’ strategy had been to grow through mergers and acquisitions, he said. But like many Internet companies, he said, CharitEx found it tough to raise the money to finance those deals. The most likely prospects to buy CharitEx are banks and software companies that serve nonprofits, he said.
eContributor, founded in January, 1999, raised more than $4 million, generated more than $500,000 in revenue last year and employed 33 people during the fall 2000 elections. But, it had sharply reduced its staff at press time, said Bob Ellsworth, the firm’s chief technology officer. Ellsworth said eContributor “didn’t have the right mix of investors,” with too many “angel” backers and not enough venture capitalists with deep pockets, dot-com experience and hands-on support. Votenet will keep those employees, including eContributor.com founder and CEO Trey Richardson, who will hold a senior post, said Charles D. Ellison, Votenet’s director of marketing and public relations.
Privately held Votenet was created in February when senior managers at Medinex Systems, a publicly held tech firm serving the medical community, purchased the division targeting the public policy and political market.
Foundations are creating Web sites to make working together easier.
In California, for example, foundations that focus on health care or make health-care grants have created an external Web site, or extranet, to improve communication and share information.
Nationally, foundation officers overseeing their organizations’ technology have built an extranet to help them learn from one another and share ideas and tools. In San Francisco, the James Irvine Foundation is creating an in internal Web site, or intranet, to help its staff members do their daily work better.
“It’s a way to lower the walls and exchange information among colleagues who really are focused on the same work,” said Katharine Miller, extranet manager for the California HealthCare Foundation in Oakland.
The foundation spearheaded the creation of the extranet, known as California HealthFunders @ Work.
The password-protected site lets its 24 members post announcements every day about new initiatives, programs and trends. Features include a directory of about 400 foundation officials in the state and a grants database that can be searched by a variety of categories, including grantee, subject area and geographic location. The site also contains a multimedia section for audio and video clips.
The extranet distributes a weekly email newsletter to its 400 readers.
And a listserve, launched late in 1999 for program officers working on Medicaid and outreach to families, is generating little traffic – but prompted the group to begin holding face-to-face quarterly meetings. “The list-serve gave them the tool to begin the process of building their community,” Miller said.
Like the California health funders, the Technology Affinity Group, or TAG, concluded that an extranet could speed communication and collaboration among foundation tech officers.
“If we come up with something good, we want all other foundations to have it, too,” said Matt Sharp, director of information technology at the David and Lucile Packard Foundation in Los Altos, Calif., and a member of TAG.
TAG’s site at tagtech.org features three separate sections, each aimed at a different audience. Passwords are required for two sections – one for foundation tech officers, the other for nonprofit consultants, vendors specializing in philanthropic technology and groups providing tech support for nonprofits.
The third section does not require a password and provides resources, links and online discussions on general tech topics.
The site features threaded, or ongoing, discussions on a broad range of tech issues, with a weekly digest summarizing those discussions emailed to subscribers.
The Irvine Foundation, faced with growing assets and staff, and its focus spread among six broad program areas, also is turning to the Internet. Since 1997, assets at the foundation have grown to $1.5 billion from $1.05 billion, while the staff has increased to 42 employees from 32.
“It’s hard for everyone here to know what everyone else is doing and to stay on the same page in our work,” said Mark Sedway, the foundation’s director of communications.
Possible uses of an internal Web site include a staff calendar; distribution to program officers of budget reports and invoices paid to consultants; and processing forms such as consulting contracts and vacation requests. Foundation officials also could post documents to share with other staff members.
In the future, officials hope the Web can support “organizational learning” among the staff by promoting the exchange of information, improving delivery of research and expertise, and building institutional memory on issues such as lessons learned from past programs and grants.
Those uses are at least a year away, said Sedway, who added that the Web also could be used to serve board members and grantees. Board members, for example, might get access to grant requests before formal review. And, grantees might join a network to share information and work together.
Growing interest in information-sharing and collaboration among foundations and nonprofits has prompted Interactive Applications Groups, or IAPPS, an e-commerce firm in Washington, D.C., to launch a Web-based product, said David Goldsmith, vice president for strategic development.
The new product, known as community [apps], lets customers create directories of partner organizations, which can post documents and links, hold online discussions, and create shared calendars and news.
IAPPS, which has worked with the California HealthCare Foundation, Technology Affinity Group and Irvine Foundation on their collaborative Web sites, already has signed up 10 customers for the community [apps], which costs $10,000 to set up and $400 a month to use. The New York-based Ford Foundation, for example, is using the tool for its program officers throughout the world who work on reproductive issues.
Change at TechRocks
Rob Stuart, a founder of TechRocks and a pioneer in the movement to provide tech assistance to nonprofits, is leaving the nonprofit group to take a break and write and speak about the impact of technology on nonprofit advocacy.
Techsoup, the San Francisco-based Web portal focusing on nonprofits and technology, has launched a banner-ad campaign in space donated by 14 Web sites. The donations include more than 12 million banner ad impressions worth more than $170,000.