Life/Work - Issue 37

Tell the truth: How many times during the past week have you had a conversation about money -- whether you have enough, how much someone you know is making, how your stock portfolio is doing, or whether you should buy that new PalmPilot, car, or vacation home?

Now, answer this: How many times during the past week have you had a conversation about giving back -- how you could contribute to a cause that you care about, or which social issues really deserve your attention and support, or which organizations are successfully addressing the world's most pressing problems?

There is a disturbing imbalance today between giving and getting. Somehow, we find it easier to focus on our self-interest than to focus on the greater good. Over the past 10 years, the new economy has created an unprecedented amount of wealth. But, leaving aside such high-profile exceptions as Bill Gates, we have not become notably more philanthropic.

While Americans contributed an estimated $115.5 billion to charity last year -- more than the citizens of any other country -- that figure represents an average of just 2% of our adjusted gross incomes. Worse yet, people in the lowest income brackets contributed a higher percentage of their earnings to charities than did those in the highest brackets. The Newtithing Group, a San Francisco-based nonprofit organization that promotes philanthropy, estimates that Americans could have given an additional $250 billion to charity last year -- without decreasing their net worth.

Fortunately, change is under way. The same technological innovation and entrepreneurial spirit that have spawned thousands of e-businesses in recent years are prompting a new, high-tech approach to philanthropy. For starters, the Internet has created an entirely new universe of potential donors. According to the Mellman Group, more than 16 million Internet users say that they are willing to make a donation to charity online, while only about 12 million people currently respond to direct-mail solicitations from charities. The average age of direct-mail donors is 66, while the average age of online donors is 42. Finally, whereas an overwhelming majority of direct-mail donors describe themselves as liberal, potential online donors represent a wide range of ideologies.

Whatever their politics, potential Web donors are more skeptical and more demanding than traditional givers. They're more inclined to seek information about the charities they support and to insist on accountability regarding how their money is spent. Meanwhile, during the past year, more than a dozen dotcom entrepreneurs have launched for-profit Web sites that offer innovative, efficient ways to contribute time and money to charities. The W.K. Kellogg Foundation estimated that as of last December, there were 140 Web sites devoted to philanthropy, volunteerism, and social change.

Perhaps all of this is news to you. It certainly was to me. I wasn't aware, for example, that there was any such thing as an online charitable shopping mall. It turns out that there are at least 10 of them, with names like CharityMall.com, GreaterGood.com, iGive.com, and MyCause.com. When you shop at the name-brand retailers that are affiliated with these sites, a percentage of the money you spend is donated to whatever charity you designate.

Most of these sites earn revenues by negotiating a discount with retailers, keeping part of it for themselves, and then passing the rest along to the charities that their customers choose. It's hard to imagine a good reason to buy things directly from a retailer such as Amazon.com once you know that by linking to it through a charity mall, you can help a cause that you care about.

Charity-auction sites offer another way to give. They usually work by sending the proceeds of a given sale to a cause chosen by the donor of the item being auctioned. So far, the online charity-auction business has proved to be only modestly successful. For example, WebCharity.com, launched in July 1998, has generated just $172,000 in auction sales.

Then there are sites that simply give people a way to contribute to the organizations of their choice. At AllCharities.com, for example, donors can select from more than 670,000 charities. Givenation.com earns its revenues by taking a fee of $2.50 for charitable donations of $30 or less, or $5 for any gift that exceeds $30 -- far smaller amounts than nonprofit organizations typically spend per donor in raising money by traditional means.

"We believe that it's a natural progression for people to start giving online, just as they're beginning to shop and do their banking online," says Susan Hackley, 53, cofounder and senior vice president of Givenation.com. "Young people are especially comfortable online. When they do AIDS walks or bike rides for cancer, we're going to make it possible for them to sign up their sponsors online. Or, when a natural disaster occurs somewhere in the world and people want to help, we'll provide information and an immediate way to contribute."