Spotlight on Online Fundraising

More than two dozen online fundraising companies have formed in the last year. Schools and other non-profits are testing the new waters. Approximately eight percent of schools have alliances with an online fundraising company, according to the National Association of Elementary School Principals. The Washington Post recently reported that one of the largest company's in this young (and now crowded) field boasts a customer base of 17,000 schools who have netted only $1 million - an average of $53 per school. By comparison, traditional product fundraising raises an average $13,000 per school. Online fundraising is not a replacement for traditional product fundraising, experts say. But as more and more consumers do more shopping online, it's expected that fundraising online will grow as well. For now, most groups approach online fundraising as a natural extension of their existing fundraising efforts.

The National PTA, PTO Today and a number of industry watchers, suggest non-profit organizations considering online fundraising keep the following points in mind:

Online fundraising appears to be less labor-intensive and, therefore, may require fewer volunteers. In most cases, there are no printed order forms; and, products are usually shipped directly to the supporter. However, sponsoring groups are still required to help promote the site. Online fundraising offers flexibility, allowing family and friends to go online anywhere, anytime to make a purchase. But because some people may not have Internet access, there may be fewer potential buyers than with a traditional product sale. Online fundraising companies are still quite young and the market appears to be getting crowded. While buyers usually benefit from competition, experts warn that rebates may soon begin to shrink as these competing companies fight to compensate for reduced profits.

When interviewing online fundraising companies, experts suggest applying the same rigorous research as you would when evaluating a traditional fundraising company. In addition, they recommend non-profit groups:

• Clarify the percentage of the rebate being offered. For example, if a company claims to offer 70 percent, does that actually mean 70 percent of the 5 percent rebate provided by the retailer? Also different retailers on a given site may offer different rebates.

• Find out if there is a minimum amount of money that must be reached before the vendor issues a check. If so, find out what that amount is and what time period there is for reaching that minimum. Also ask about what happens to the money if your group doesn't reach that minimum.

• Check out the company's Web site and technology. Is it easy for a supporter to navigate and make purchases? How are rebates tracked?

• Ask about the company's privacy policy. Do users have to provide info on themselves and /or their children? Will their names and personal data be sold to others? Most electronic commerce sites display their privacy policies. If there is no formal policy, it's fairly safe to assume that the company is willing to share its database for the right price.

• Find out how much support your school will receive from the online company. Some have customer service representatives who can provide help by phone, e-mail or in-person. Many offer printed materials to help promote the fundraiser.

• Ask for references. Because most online fundraising sites are still young, results are hard to come by. But it's still a good idea to talk to some of their current customers about service and overall shopping experience.

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