February 9, 2001 9:45 AM PST
Taking donations from the Palm in your hand
Experts say that only a fraction of all charitable giving takes place online. But well-known organizations such as CARE, the American Red Cross and Amnesty International can draw substantial sums over the Internet in the wake of major disasters. In the weeks following last month's devastating earthquake in India, the American Red Cross gathered some $1.5 million through its Web site alone, the organization said.
"When a major visible disaster occurs in the U.S. or around the world, we find that our Internet giving goes up significantly," said Chris Paladino, spokesman for the American Red Cross, who noted the group raised just over $2.3 million online in all of 2000.
The trend has spawned even bolder experiments from some charitable groups, which increasingly see technology as the key to opening the wallets of disaster sympathizers who wouldn't otherwise get around to writing and mailing a check.
This week, for example, Time magazine and online philanthropy site Netaid.org announced an initiative aimed at collecting donations through Palm VII handheld computers, which come rigged with wireless Web connections. The program, aimed at assisting AIDS victims in South Africa, lets volunteers collect credit card data from friends and zap it to a Web site run by Netaid, which processes the transactions.
The experiment, sponsored by AOL Time Warner-owned Time and by Netaid, pushes the envelope for Web-based charities, according to analysts, who said the bid to turn handhelds into virtual wallets faces some significant hurdles--for example, guaranteeing the privacy and security of contributors.
"It's a good start," said Patrick Thomas, an analyst at Nielsen/NetRatings. "But it might be ahead of its time."
Supporters of the project, including Palm, counter that wireless devices offer major advantages over traditional fundraising tools. Palm Chief Marketing Officer Satjiv Chahil said that wireless devices exploit a different sales psychology than traditional methods by allowing instantaneous transactions anywhere.
That mantra extends beyond the realm of charity for Palm, which has been pushing to transform its handheld devices into virtual "wallets" as a way to gain an edge in a competitive market. Last month, the company unveiled a new eWallet feature that will allow a customer to conduct secure purchases by beaming personal information from the device's infrared port.
Chahil said such features will let people be more impulsive when spending their money, which could give a boost to charitable impulses.
Web charities face big questions
Turning to the Web for fundraising is nothing new. Since its inception, the medium has provided traditional charities ways to gather donations. It also has inspired a handful of new virtual ventures with names such as CharityWave.com, Thehungersite.com and Helping.org.
Such newfangled Web sites have not been as successful at fundraising as traditional organizations such as the American Red Cross, according to Mark Rovner, senior vice president of Craver Mathews Smith, a consulting firm for charities. People who are willing to give online overwhelmingly gravitate toward groups that they have already heard of or had some prior relationship with, he said.
The numbers appear to bear that out.
Netaid, which was founded by the United Nations Development Programme (UNDP) and Cisco Systems, has some big backers but is not a household name. Its Outreach Project, in which people send AIDS treatment kits to South Africa, has raised $4,862 so far, according to data on the group's Web site. Its goal is to raise some $82,994.
Other projects, such as a Netaid initiative with Time to reduce childbirth deaths in Rwanda, raised some $291,740 so far, just short of its goal of $315,225.
"As with so many Internet, dot-com companies, (Netaid) went to market without proving that there was a demand for the product that they were offering," Rovner said.
Netaid said that the projects have been successful because they have helped educate people about certain issues, such as AIDS/HIV.
"It's not all about the money," said Netaid spokeswoman Susan Lamontagne. "Our primary goal is to engage people and get them involved...we consider that a victory."
But analysts said the response to Netaid shows that there is still a long way to go before handhelds can be turned into virtual UNICEF boxes.
A Craver Mathews Smith study conducted in the fall of 1999 showed that roughly 3.5 million Americans over the age of 18 said they gave online donations between 1998 to 1999. About 40 million Americans who make charitable donations have Internet access, the report also found.
Rovner said preliminary results in the company's pending report on online giving for 2001 shows people are still more likely to write checks and send their donations via snail mail than via the Web.
Time Foreign Editor Joshua Cooper Ramo defended the partnership with Netaid, saying it creates an outlet for charity that has never really existed before. In
"It's not enough for us to just cover certain issues," he said. "We also want to be aggressive about providing ways for readers to do something about the things they read about in Time magazine, and closing that loop is an important part of what we think journalism does."