Although the figures aren’t yet in for 1999, according to Giving USA, Americans gave over $175 billion to charities in 1998 with 83 percent of the donations coming from individuals.
And according to Cravers, Mathews, Smith & Co., more than 3.5 million Internet users gave to their charity of choice online. One company is betting that by making it easier and more convenient to give, this figure will climb and nonprofits will join in the benefits from the Internet explosion.
Charitableway.com uses the Internet to bring together charities and donors through a simple, convenient, safe and private giving mechanism. The site is easy to navigate and allows donors to search for charities by name or area of interest. Categories include Animals, Nature and Science, Education, Religions & Spirituality, Children, Family & Gender, and Civil Rights & Social Action. Don’t know much about making charitable donations? The site has a page that teaches how to give and what to look for in a charity. Want to volunteer? They will hook you up with organizations in your area that need help.
The company builds web pages and develops fundraising mechanisms for registered non-profit 501(c)3 organizations through contractual partnership agreements. Joining the site is free. And the large, sophisticated system in place at Charibleway.com allows small nonprofits to create an online presence that would normally be prohibitively expensive for them. Among the local and national charities represented by the site are United Way Silicon Valley, Pediatric AIDS Foundation, Big Brothers Big Sisters of America, Rock the Vote, National Breast Cancer Coalition, and the Human Rights Watch. A search for Rock the Vote brought up a paragraph on the organization and an address along with several other political organizations and several sites with the word “ROCK” in the name or address.
In addition to direct contributions, Charitableway offers online charity shopping and auctions (coming in the second quarter of 2000). The auction site will create real incentive to donate items because the donor gets a tax deduction at the final auction amount rather than just the depreciated cost of the item. Donations and payments to the site can be made via credit card, payroll deductions, foundation matching programs, and employee giving programs. Donations can be made either anonymously or using a donor name.
Donations made through Charitableway.com are tax deductible and are deposited directly into a trust that is administered by Comerica Bank. The site uses a charity-direct donation system and doesn’t intermediate the funds being raised. Only after a charity receives its donations does Charitableway receive its fee. The company receives anywhere from five percent to just under 10 percent of donations depending on the type of donation and the projects developed by Charitableway for the charity. Donors are able to track their donations throughout the year via the website as are the charities.
But the big difference between Charitableway.com and the other charity sites on the Internet is its focus on corporate giving. “The focus of the business is no longer the site,” said Andy Rachleff of Benchmark Capital, “but enabling work place giving. We will provide technology for employees to give in partnership with corporations. Click on a Web page, choose where to put your money and a third party (Charibleway) will manage the process.”
Rachleff said there is a broad section of corporations that want to enable directed giving for their employees, something a program like United Way has not provided in the past. A new partnership with Silicon Valley United Way now allows directed giving by the donor to United Way charities. Charitableway hopes to bring more branches of United Way into the fold before long.
Charitableway.com will be launching a new system which, according to their spokesp
erson, will allow the donation of stock directly to charitable organizations. Considering the amount of highly appreciated Internet stock in the market today, this could be an outstanding contribution mechanism to worthy causes throughout the United States.
Founder Pete Mountanos serves as CEO and president of Charitableway.com. He held executive positions at Softbank Technology Ventures, Microsoft Corp., Vxtreme, ABEKAS Video Systems and Tektronix.
The company was launched in March 1999 with $1 million from Mountanos. An $8.3 million round followed in May 1999 from Softbank and Benchmark Capital, and the site went live in October 1999. A Series B round is expected to close by the end of January.
At this point, there appears to be no competition for Charitableway.com on the corporate front. All of the web sites currently online are geared to individual giving either through straight donations or online shopping where the charity receives a percentage of the sale.
“We believe that the Internet is the key to making charitable behavior part of society’s everyday life,” Mountanos said. Only time will tell if his vision will become a reality.
IN A NUTSHELL
Company Name: Charitableway.com
Address: 1816 Embarcadero Road, Palo Alto, Calif. 94303
Phone: (650) 213-4243
Fax: (650) 813-1484
Contact e-mail address: Lauras@charitableway.com
Web address: http://www.charitableway.com
Employees: 62 plus 30 contractors
Total Funding: $9.3 million
Investors: Founders, Benchmark Capital, Softbank Ventures
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