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Living Solutions: The Growing Trend of e-Philanthropy

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DARYN KAGAN, CNN ANCHOR: Time now for this week's "Living Solutions" segment: the growing trend of e-philanthropy.

CNN's Eileen O'Connor takes a closer look.

(BEGIN VIDEOTAPE)

EILEEN O'CONNOR, CNN CORRESPONDENT (voice-over): Rehearsals at the nonprofit Wildwood Summer Theatre for 14- to 25-year-olds, whose performances on stage are increasingly funded by donations online.

ISABEL HERNANDEZ, WILDWOOD SUMMER THEATRE: The money just rolls in. I mean, every month a check.

O'CONNOR: Wildwood uses iGive.com, an on-line e-philanthropy site that, like many others, links visitors to e-commerce sites. iGive then splits a percentage of their purchases with its affiliated charities. That means Wildwood can spend more time rehearsing and less time fund raising.

HERNANDEZ: In the past, we've had to do these really time- intensive fund-raisers, but while this, really, is just zero effort and has made more money than some of our standard fund-raisers already.

LYNN RIDENOUR, GREATERGOOD.COM: We're going to select a charity to benefit from the activity we do on the site GreaterGood site.

O'CONNOR: GreaterGood.com allows customers to earmark which charity will receive a percentage of the amount they spend. GreaterGood.com also helps charities with their own Web sites and owns the hunger site where, each time someone visits, a cup of rice is donated by a corporate sponsor. Analysts say those sponsors benefit themselves from a so-called "halo effect" in the eyes of the consumers visiting the site.

With 3.8 million unique visitors a month, GreaterGood.com garners a coveted audience that also benefits affiliated e-commerce sites.

RIDENOUR: Up to 15 percent of every activity, whether that's shopping online, applying for a credit card, making travel arrangements, all of those things go back to benefit a charity.

O'CONNOR: But there can be a downside to online giving. (on camera): The Better Business Bureau warns potential donors to check up on the charities to make sure they are what they say they are. At the Better Business Bureau Web site at www.bbb.com, they actually list 200 of the most asked about national charities and whether or not they meet their standards.

(voice-over): The Better Business Bureau says the majority are legit. And for those, like the Wildwood Summer Theatre, just a few clicks can go a long way.

(END VIDEOTAPE)

O'CONNOR: Wildwood and others say that this is still a small percentage of their total fund raising, but they are hoping it will grow. And some charities are hoping they'll be able to use e-mail instead of direct mail -- Daryn.

KAGAN: That would be cheaper in that case. What if you're interested in online charity but you're not sure completely about whether it's legit or not? What's the best way to check that out?

O'CONNOR: Well, it is to go to several different Web sites, GuideStar.com, but also this BetterBusinessBureau.com or .org. It's www.bbb.com or .org. And you can go down and you can see there it says, "when you donate." And you just click on "check a national charity report," and it gives you an index on the Philanthropic Advisory Service.

And if you go down -- and let's look at Alzheimer's, since that's been in the news a lot lately, the Alzheimer's Association -- you can actually buy alphabetical order, check on different charities, 200 of the most commonly asked for charities. And if you scroll down here, it gives you an idea of what programs the Alzheimer's Association is doing, where their chapters are, the kind of public policy, and also their finances.

And if you get all the way down to the end, you'll see this pie chart and there it's -- that's very important because that can give you an indication of exactly where your money's going. And in this case, 74 percent of your dollar is going for programs with only 4 percent of administration.

So that shows you, Daryn, that for each dollar that you spend, most of it goes, actually, to the programs and to getting those programs going. So that's a very good ratio.

Again, this also will cut down on those administrative fees and the fund-raising costs. In this case, 20 percent of the Alzheimer's Association is -- they spend on fund raising -- Daryn.

KAGAN: Eileen O'Connor in Washington, thank you.

So you don't just know what the charity is, but you know what they're doing with the money.

O'CONNOR: Exactly. KAGAN: Good information. Thank you.

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