Social Networks Meant for Social Good, at a Price

Over the last year or so, there has been an explosion of online intermediaries promising to help nonprofit groups raise money and awareness.

Crowdrise, Jumo, Causecast, Causes on Facebook and others try to use social networking and crowdsourcing to build interest in charities and causes, and to help them attract donations.

“2010 has really been the year of the social network for social good,” said Katya Andresen, chief operating officer at Network for Good, a nonprofit that handles processing and other administrative chores for many of the new sites.

In a recent study of online giving, Network for Good found that the experience when donating online is important to people. “I think many of these new sites are trying to make online giving, which is rather transactional in nature, an experience of greater intimacy, and that’s valuable,” Ms. Andresen said.

But to many in the nonprofit world, the value of the sites remains to be seen. For one thing, they hand partial control over charity brand names and trademarks to users who are often unknown to the nonprofit groups they support. And virtually all of them ask users to pay to donate.

“I think of them as disintermediaries because they stand between a nonprofit and its supporters, and what most of our clients’ value is establishing that direct connection,” said Gene Austin, chief executive of Convio, a company that provides technology to help nonprofits manage donor relations. “It’s especially concerning if they’re taking a cut on top of capturing eyeballs and individuals.”

To Mr. Austin and others, the new sites operate on a model that evokes memories of the United Way a decade ago. That organization began to lose ground when donors questioned why they should make donations through United Way — and give it a percentage of the money — when they could give directly to a charity.

“Moving toward a more donor-driven, pass-through model didn’t raise more money,” said Brian Gallagher, chief executive of the United Way of America.

Now, the United Way raises money around three core issues — education, health and income — which it addresses with proprietary programs. Its “pass-through” business, Mr. Gallagher said, has remained stagnant for the last five or six years.

“What we learned is that folks will pay you if they think they’re getting more value for what you’re offering,” Mr. Gallagher said, describing what his organization had learned. “They won’t pay you because you’re part of the commodity in the middle.”

The young entrepreneurs behind the new sites say their organizations are more than middlemen. “Saying the people can donate on an organization’s Web site misses the fact that nonprofits have to advertise to get people there, do marketing in various places to convince them to donate, cover credit card fees and pay for technology associated with their Web site and payment processing,” said Matthew Mahan, a representative of Causes.

Chris Hughes, the founder of Jumo, said his site was primarily about helping people connect with one another and with organizations around social missions, not about fund-raising.

“Jumo makes it easier for people to find an organization and stay in touch with it,” said Mr. Hughes, who is also a founder of Facebook. “That has a value.”

Crowdrise pitches itself as a tool to improve an individual’s fund-raising campaign, whether that is a celebrity like Barbra Streisand, who is raising money for the Cedars-Sinai Women’s Heart Center, or a person like Christine (Crowdrise users usually use only their given name), who is using the site to raise $60,000 for the Leukemia and Lymphoma Society.

“To us, Crowdrise is a complement or additive to whatever users are already doing,” said Robert Wolfe, one of its founders. “We don’t see this as a place for a charity to raise money for operational funds. It’s more for projects.”