Clicking for charity
Online buyers, sellers team up to help
By Leon Stafford
The Atlanta Journal-Constitution
Published on: 01/11/05

When the UPS delivery truck visits Sandra Mackey's neighborhood, it's probably stopping at her house. The senior marketing manager at the Troutman Sanders law firm is a hard-core online shopper, much to her husband's chagrin, she says. But for the past year, Mackey has been able to justify her shopping sprees — at least somewhat. In late 2003, she joined Benevolink, an Atlanta company that matches consumers with retailers willing to donate a portion of proceeds from online purchases to charity.

"I just love the concept," said Mackey, a frequent shopper of apparel retailer Chadwick's. "I juggle a husband, a 2-year-old and a career. This gives me convenience and the opportunity to do something that I think is worthwhile."

Here's how 14-month-old Benevolink operates: Consumers go to the company's Web site, sign up for a free membership, choose their charity and start shopping by clicking on one of more than 150 affiliated retailers. The retailer deposits some of the sale — about 5 percent to 7 percent — into the customer's Benevolink account. Once a quarter, Benevolink donates the account balance to the charity, which can be as small as a local church or as large as a nationwide nonprofit.

Benevolink is a recent entry in the ever-crowded loyalty marketing sector in which businesses — from grocery stores to banks to airlines — promise to reward customers for their patronage, said Ken Bernhardt, regents professor of marketing at Georgia State University. Consumers like it because it gives their purchases additional value. Companies like it because it attracts new customers and helps retain the ones they have.

"For the consumer, it is basically getting something for nothing," he said. "And the retailer gets some warm-and-fuzzy associated with it."

And a tax break. Because retailers do the actual donating, they get the tax credit. Benevolink makes its money by charging retailers to participate, said Tunstall Rushton, founder and chief executive officer. The company does not charge charities.

"The beauty of this for charities is they are getting one check that is an aggregate of many people," Rushton said.

Consumers can choose from a list nonprofits or submit a charity of their own, said Karen Clay, the company's vice president for nonprofit relations.

"Any organization that can receive charitable funds can participate," she said. "We have a very broad definition."
Educational, faith-based and social service organizations have been the most popular, she said. "That's right in line in with national giving norms."

When making its pitch to retailers, Benevolink touts research that indicates consumers spend more when they feel their dollars are being used for a greater good, Clay said.

"It's a really strong draw for both the consumer and the retailer," she said

But Todd Mark, a spokesman for Consumer Credit Counseling Service, said consumers should be careful. If they already have credit card debt, buying for the sake of charity could leave them paying more to the credit card company than to the nonprofit.

"This will work for people who pay off their bills in full every month," he said.

Benevolink, which went online in September 2003, doubled its customer base during the holiday season, Rushton said, although he would not say how many customers came to the site or how much they ended up routing to charities.

Chris Nave, major gift officer for Atlanta's Project Open Hand, said his organization joined Benevolink in November and has not yet received its initial quarterly payment. But he said he's already sold on the service: The Internet portal makes it easy for agencies without a large fund-raising staff to bring in more money.

Chara Fisher Jackson, executive director of the Georgia Breast Cancer Coalition Fund, said Benevolink offers another way to raise money and demonstrates how the fund is trying to broaden its reach. The fund sent letters to its major donors soon after signing onto the service in November.

"It worked out well for us because we got to say this was a new initiative for us on our 10th anniversary," Jackson said.

For consumers, giving through Benevolink is different from making direct donations. The contributions are not tax-deductible. And donors cannot specify the purpose of contributions. That means the money can be spent on a charity's administrative costs. This is an important distinction for some donors. Several charities ran afoul of contributors a few years ago after reports of donations being used for high-dollar salaries, expensive office furnishings and lavish trips. Many charities now allow donors to direct their money solely to a charity's programs, not its overhead.

"The unrestricted giving is becoming harder to come by for charities," Clay said, explaining why Benevolink decided to give charities the final say on how the donations are spent.

Frequent shopper Mackey, who gives to Atlanta's Families First program as well as diabetes organizations (her father and brother suffer from the disease), said she is not bothered by the unrestricted giving policy. "They [charities] wouldn't be there if they didn't have the administrative essentials," she said.

More than 150 online retailers have signed up with Benevolink. Here is a sample, including the percentage of sales they set aside for charities:• Fossil: 13 percent
• PetsMart: 8.5 percent
• RedEnvelope: 6.5 percent
• Ace Hardware: 4 percent
• Neiman Marcus: 4 percent
• OfficeMax: 3 percent
• Gap: 3 percent
• Tower Records: 3 percent
• Home Depot: 2.5 percent
• Travelocity: 1.5 percent