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Emerald Group Publishing Limited
Copyright © 2009, Emerald Group Publishing Limited
Article Type: Internet currency From: Journal of Consumer Marketing, Volume 26, Issue 3
Edited by Dennis A. Pitta, University of Baltimore
Charities and social enterprises and their use of the internet
Charities were early adopters of the internet and used them to send information one way to stakeholders and potential donors. One misconception is that non-profits are not sophisticated in their use of the Internet to automate office processes. Typical non-profit organizations aim at a higher purpose than profits. They tend to focus on a cause or problem whose solution lies outside that of businesses or government. With the focus on doing good instead of making profits, some charities miss an opportunity to thrive.
Non-profits benefit and suffer from the same element: donations. Donations sustain charitable work but are themselves not sustainable. Donors are motivated by their altruism, interest or even feelings of guilt. Their motives and level of commitment vary and some come and go. What charities lack is a “product” containing desired benefits that would appeal to “customers“ and offer a measure of “repeat sales“ – sustainability. Gaining such products would extend their reach beyond donors to consumers and thereby transform them into social enterprises.
In a recent study of social enterprises, one example demonstrated a level of sophistication in its use of CGIs (Common Graphics Interfaces) that automated a rather complicated process. To be clear, a social enterprise marries the best of non-profit and for-profit organizations. The typical arrangement is for the for-profit division to generate operating funds for it and the non-profit division. Since social enterprises contain both profit-seeking and charitable purposes, it was felt that they would be more sophisticated in design of their web sites like ongoing businesses which depend on the Internet for their profits. The example that caught our attention is a social enterprise called Vehicles for Change (VFC). VFC is the charitable side of the company, funded by Freedom Wheels, a division that accepts donated vehicles, repairs and warranties them and sells them at a profit. VFC donates some of those cars to needy families who need automobile transportation to get to a job, and who can prove it. It is a relatively young organization, run by a director with wide experience in business and in university giving. It is interesting to contrast it with an established charity, the American Cancer Society, a pillar in the fight against disease.
When VFC solicits an automotive donation, it requires a significant amount of information. Legal requirements are complex. Buying, selling or donating a high value item like an automobile requires the typical seller/donor’s name, address and contact information. Moreover, it requires the all important VIN: Vehicle Information Number. The VIN identifies a specific automobile and was designed to thwart auto theft. It is placed on the vehicle’s dashboard to be visible to anyone outside looking in, like a police officer at a traffic stop. The VIN’s of stolen cars are circulated among law enforcement agencies. Thieves may replace license plates in an effort to hide the identity of a stolen vehicle but they do not usually have time to change the VIN. In addition, there is another level of security: there are one or two secret places in vehicles that manufacturers place VIN numbers.
VFC uses a sophisticated CGI to collect all the required information including the location of the vehicle. Thus it automates an office process and reduces the cost in staff hours of accepting a donation. Once accepted, the site e-mails the donor to expect a call from a tow truck driver. Since vehicles must be towed from their location to a repair facility, the only human to human contact is between the donor and the driver. In most cases, that phone call is the only contact since the driver can tow the vehicle without the donor being present. The level of automation is impressive. Our first impression was that established charities, run without a profit-seeking division would not be as advanced as VFC. We were wrong.
The American Cancer Society (ACS)
The ACS has a sophisticated web site that provide a wide variety of information to those interested in the disease and in ways to support research to cure it. The web site’s opening page contains a prominent, centrally located module titled, “Join the Fight against Cancer” with the following four links:
Participate in events;
Volunteer your time; and
Advocate for change.
The links are intelligent ways to support the effort. When we clicked on the “Donate” link we encountered 16 different varieties of donations. It is instructive to list each one to demonstrate their nature and scope and to illustrate the high level of maturity in the web site’s development.
The donation possibilities include:
Donate online now.
Gifts in memory.
Gifts in honor.
Join an event.
Gifts of securities.
Cars for a cure.
Family and friends.
Search the web … fight cancer.
Donate by mail or phone.
Over the years, the ACS staff has developed a seemingly all-inclusive list of possibilities. Many of them like the estate/trust administration involve highly complex legal requirements that demand truly sophisticated handling. We investigated the Cars for a cure option and found a CGI similar to that used by VFC. ACS provided the basic tax information and showed the limits of tax deduction for a donation. It also provided links to the applicable tax law. There was one difference between the organizations: VFC donations qualify for a higher deduction under the law since the cars are donated to needy families. ACS had one additional element, a tender testimonial from a donor, a cancer survivor. Her testimonial read in part: “Recently, I donated my treasured 1989 BMW Convertible to the American Cancer Society. My son …had given this car to me one Mother’s Day so there were very special memories attached to it. The thought of selling this special gift didn’t feel right. I talked with my son and he was all for the idea of donating to the American Cancer Society.”
The link to estates and trust management is aimed at administrators and speaks their language. The ACS directs them to its National Office of Probate and Trust Management Services (PTM) and notes that it is staffed with a professional team of attorneys, accountants, paralegals. It stresses that the staff is “responsible for stewarding and accounting for planned gifts on behalf of ACS Divisions across the country and the National Home Office.”
ACS employs time tested marketing wisdom like, “Make it easy for the customer”, “Speak the customer’s language”, and “Provide testimonials”.
It seems that social enterprises may benefit from the profit motive in increasing the business-like nature of their operations. However, the organizational life cycle seems more important. The ACS has matured enough to employ professional fundraisers who have developed a world-class operation, which exploits technology to the full. After considering the truly amazing quality of the ACS’s efforts, it seems like our first impression, that they would be simplistic was actually a prejudice. We failed to appreciate the professionalism of the non-profit’s management and their recognition of the importance of reaching out using all modalities, including the internet.
Significance of the web sites
Both show the benefits of using the internet to automate office processes. The VFC site demonstrates what a small social enterprise can accomplish on a limited budget with a very small staff. The ACS demonstrates that a large non-profit can accomplish goals that are equal to the largest profit-seeking companies. Indeed, for-profit companies might learn much from exploring the web site.
Please forward all requests to review innovative internet sites to: Dr Dennis Pitta, University of Baltimore, 1420 North Charles Street, Baltimore, MD 21201-5779, USA. Alternatively, please send e-mail to: email@example.com for prompt attention.