Hooking New Online Shoppers To Also Donate Takes Marketing
October 31, 2014 Patrick Sullivan
Pam Kohl, executive director at Komen North Carolina Triangle to the Coast (Komen NCTC), a Susan G. Komen for the Cure affiliate in Raleigh, N.C., wanted to rely less on race revenue. She was seeking easy ways to engage supporters when she stumbled upon online retail behemoth Amazon’s AmazonSmile program.
“It gives us an opportunity to get in front of donors shopping on Amazon and remind them we need help year-round,” said Kohl.
AmazonSmile and other services such as iGive, Ziggedy and Goodshop trade on laziness and good intentions. If you’re already shopping, why not take a little off the top and give to charity? These services act as a clearinghouse for items, and a small percentage of the purchase price is given to a charity chosen by the shopper.
It’s a chance for shoppers to do what they’re already doing and generate donations, said Ian McAllister, general manager of AmazonSmile, based in Seattle. “It’s pretty straightforward.”
AmazonSmile launched in October 2013. McAllister declined to provide a specific number of users and overall revenue generated, but claimed, “Millions of customers have joined, and we’ve donated millions of dollars to tens of thousands of charities.”
Donations from AmazonSmile are paid quarterly to charities through the AmazonSmile Foundation, which has yet to file a federal Form 990 with the Internal Revenue Service (IRS). Customers shop through smile.amazon.com and choose a charity to benefit. Thereafter, the charity gets 0.5 percent of the price of each purchase, excluding digital items such as e-books.
That often does not translate into a lot of money. A 32-gigabyte iPad Air, which goes for $539.99 on Amazon, would net a charity about $2.70. Komen NCTC has received $369 from AmazonSmile. But, it’s easy money, for both nonprofits and shoppers.
Simple and automatic are the big strengths of these types of services. Robert Grosshandler, founder of the service iGive in Miami Gardens, Fla., touts the ease of use as the main drawing point for both nonprofits and shoppers. “From a nonprofit’s perspective, the reason for being signed up is hopefully quite simple: The nonprofit gets to raise money from its supporters, at no cost to the nonprofit or the supporter, and it’s very, very easy,” he said. “The very, very easy part is perhaps the most important.”
iGive, founded in 1997, works on the same principle as AmazonSmile, in that shoppers buy items and a portion of the purchase price is donated to charities. But while the goods from AmazonSmile come from Amazon, items from iGive come from across the Internet, and iGive acts as a portal or a virtual storefront.
According to Grosshandler, iGive has had about 350,000 shoppers support more than 35,000 nonprofits in the past 17 years. Some 1,500 stores participate.
Participating stores and iGive come to an agreement on the percentage that gets donated, and a separate percentage that goes to iGive. Percentages to charities range from 0.8 percent to 26 percent, Grosshandler said. “The average consumer spending the average amount of money” will generate between $70 and $100 per year. Grosshandler said an average amount of revenue raised per charity is a meaningless number “because there are organizations that have thousands of members,” he said, and charities with a much lower number. iGive pays its charity partners monthly.
Ziggedy, based in Fountain Valley, Calif., launched in September 2013 and is similar to iGive. But being born on a social Internet means clicking and buying just isn’t enough, said Cassidy Nielsen, director of digital marketing.
“We let users post wish lists and boards,” personal pages to collect deals you like, display your wish list, and shop for items you buy frequently, he said. Nonprofits, too, can create wish lists for in-kind donations.
Nielsen said Ziggedy managers decided to start small and local, with charities with which Ziggedy staffers already had a direct relationship. “Proximity to us was the main factor, and relationships,” he said. “We started slow on purpose. Let’s not push the donors until we’re ready.” The site rolled out more broadly this past September.
Nonprofits get paid quarterly from Ziggedy. The service cuts deals with its 3,500 partner stores to take a percentage of the purchase price. Half of that number goes to the charity, the other half to Ziggedy. Nielsen said the average percentage to charities per purchase is 3.5 percent, meaning the average contract stipulates 7 percent of the purchase price, with the other half going to Ziggedy.
To be successful with iGive, said Grosshandler, you need “a constituency that are shoppers online. If you’re a group that gets all its funding from grantwriting and you provide services to the homeless, iGive is probably not going to be a smart place to put your energy because you have no one to ask for help.”
You also need to let your constituents know you’re on whichever service you use, and probably more than once. Grosshandler said iGive can help with the marketing, but the organizations that do very well remind supporters that they’re on the service and eligible to receive donations. “Marketing 101, frequency is important, but Internet 101, being polite is also important,” he said.
According to Nielsen, “The (organizations) that do really well treat this as a fully integrated campaign,” he said. “It’s taking ownership, being prepared to put in the work to make this happen. Understand it’s going to take some work but it will be worth your while.”
That’s what Komen NCTC is doing. “This is part of a whole effort we’re making at our affiliate to diversify our revenue stream,” said Kohl. “Part of the plan is to have a more robust social media program where we’re having conversations with donors and participants. We can always remind people that as you shop you can always shop to give. We do have a page on our website called Shop to Give with opportunities to donate as they shop.”
Kohl said Komen NCTC doesn’t have a firm financial goal in mind when it comes to raising money from AmazonSmile. “Success would be raising some money and seeing race participants giving at other times of the year,” she said.
Part of the attraction of AmazonSmile for shoppers — and their nonprofit beneficiaries — is Amazon’s huge marketplace. It’s the same with eBay Giving Works, based in San Jose, Calif., which leverages eBay’s marketplace. Since eBay Giving Works was founded in 2003, it has raised $521 million for more than 30,000 nonprofits, according to Alison Perris, head of marketing.
“The way our program works, each seller has the opportunity to donate between 10 and 100 percent of the proceeds to charity,” she said. “What’s really interesting is all of that is through buyers and sellers, through people shopping for a product and they run into a cause.”
eBay Giving Works has two aspects: direct nonprofit selling and community selling. Any nonprofit registered can sell items directly, with the proceeds going to the organization. Or, it could be the benefit of other sellers’ largesse. All items with a charitable element, whether direct selling or community selling, are marked with a blue-and-yellow ribbon. Perris said on any given day there are about 1.5 million blue-and-yellow ribbon items available.
Some 17.5 million such listings were created last year, generating $85.1 million. Perris said eBay Giving Works does not break out the total raised from direct selling, community selling and direct donations at checkout. Nonprofits selling directly link their eBay and PayPal accounts and get paid after each transaction, and funds from community-selling are paid out monthly.
While those who run these services suggest that using them is easy, not everyone agrees. Cause marketing expert and consultant Joe Waters of the blog SelfishGiving.com, is one of them.
“I think the challenge is, what AmazonSmile (and others are), is a shopping portal, which we’ve seen since around 2000. The reason why they don’t work is they require supporters to do something that they don’t usually do,” he said. In AmazonSmile’s case, “It requires you to go to a different site,” said Waters.
“I think it’s too much for most shoppers,” he continued. “A lot of people just go to their browser and type in ‘Amazon.’ We’re only getting a lot of anecdotal evidence. It’s a challenge, and part of it is the old portal dilemma. When portals came out for fundraising, it was the same concept. All you had to do is go through the site, pick the Amazon or whatever button, and people couldn’t even do that. That’s essentially what Amazon is asking them to do.”
Grosshandler acknowledges that it might be difficult to get shoppers to change their behavior by using a different site to begin shopping. “Just because you’re willing to change your behavior doesn’t mean you want to,” he said.
Changing behavior can be tricky, so Goodshop doesn’t even try. “According to eMarketer, 112 million Americans will use online coupons. We know these are the same people who are supporting causes,” said Scott Garell, CEO of Goodshop’s parent company Goodsearch, based in San Francisco. Goodshop has deals with more than 7,000 merchants to offer coupons to users in exchange for a portion of the purchase price being donated to shoppers’ favorite charities.
When users search for a store on Goodshop, the site sends them to that store’s Goodshop coupon page. Shoppers can take advantage of a coupon or go through Goodshop to the merchant’s website. Goodshop sends a piece of code with the user’s data to the merchant, so the merchant knows the shopper came from Goodshop and to hold back a percentage.
Like iGive and Ziggedy, Goodshop works out contracts with each merchant to hold back a percentage of the subtotal (not including taxes and fees). Goodshop passes half of that percentage to charities and keeps the other half. “The average passback to charities is about 3 percent,” said Garell. “It can be as low as 1 percent, and I’ve seen it as high as 20 percent.” Goodshop pays out to charities once per year.
Goodshop and Goodsearch together have raised $11 million since Goodsearch was founded in 2005, Garell said. A breakout of funds raised only from Goodshop was not available.
According to Garell, the site has added three or four times the number of unique visitors during the past year, and in August clocked 4 million unique users. Charities fill out a simple application to get on the site and are validated by Goodshop within 24 hours.
The most successful charities on Goodshop, said Garell, “have made a real effort to integrate Goodshop on all of their marketing channels. They send emails to their user base. They put something on their website. They market us on Facebook. This should be something that gets consistent marketing to raise awareness and get consistent results.”
Waters would have preferred to see opportunities to give at checkout. “When people get to the register, the site would ask them, do you want to round up the price and donate the remainder to charity. That strikes me as a more effective model. Even 1 percent of what happens at checkout would be a lot of money.”
Nonprofit managers thinking about putting some time in promoting a shopping portal revenue stream might be cautious of a chilling effect. No one wants supporters to think, “My money went to this charity through AmazonSmile or iGive, so, I don’t have to donate.” Waters said this shouldn’t be a problem.
“That’s what people think about something like the Ice Bucket Challenge,” said Waters, which raised more than $100 million for the ALS Association on social media. “But, that’s not often true. People don’t feel that it excuses them from making a donation at some point.”
Kohl doesn’t think giving through AmazonSmile will make her supporters any less likely to give through more traditional means. “Our philosophy is we want to give people all kinds of choices in how and when they give. Some give to the race, some join our monthly sustainer program, some give at the end of the year,” she said. “Let’s give people choices and enable them to give year-round.”
“A lot of people would call something like AmazonSmile slacktavism,” said Waters. “That’s a big challenge of that. In addition to having to figure out how to get people to (the service), you have to figure out if this is hurting. But in general, people will give more, not less, given the opportunity.” NPT