When was the last time you wrote a cheque to donate funds to charity?
Chances are, you didn't use pen and paper to make your donation but instead electronically completed the transaction with a few clicks on your computer.
That act is just the beginning of what Better the World wants to capitalize on.
The Toronto-based company is bringing innovative technology to not-for-profit cause organizations.
"We realized that as demographics shift and you see the advent of social communities and networking, charities are not taking advantage of the opportunities online to raise money through Web-based channels," partner Steve Croth says.
He, along with two partners, founded the company in 2008 after coming up with the idea to "use the Web to introduce new ways to give" while doing his executive MBA at the University of Western Ontario's Richard Ivey School of Business.
"We thought that fundraising was very dated," he says. "It needs to be about more than asking people to cut cheques. So we looked across the Web and the types of new business models that have emerged and thought, okay, how do we apply this to charity?"
The answer they came up with was value-based advertising to target individuals. In other words, ordinary people are able to raise money for charity simply by becoming willing targets for ads.
Here's how their concept works: People sign up for accounts at Bettertheworld.com. They choose a charity to support from a list of participating charities. Then they choose from a set of tools - one of which is a fundraising sidebar that integrates directly into their browser and displays ads that are aligned with the cause they've chosen.
Ninety per cent of funds raised by viewing these ads goes to the person's charity - 10 per cent goes to Better the World.
Users can also shop for a charity by installing a shopping application. Every time they buy online from a list of more than 40 participating retailers - such as Amazon, eBay and iTunes - a percentage of their purchase is donated to their charity.
Better the World is also integrated into Facebook and Twitter, making it easy for members to share stories and news from the charity application with friends.
"Our software program gives people free ways to raise money for their cause," Mr. Croth says. "The best way to think about it is that we're the world's first micro-aid fundraising service."
One of the main reasons it works, Mr. Croth says, is because it connects the right people with the right ads. "Generally most companies do broad-based advertising campaigns to tell their stories [of corporate sponsorship] We say no. The community is where that story should start."
Rather than blast the general public with news of their charitable activities, corporations are better served targeting people who are interested in the same cause through Better the World, Mr. Croth says.
So far, Better the World has 25 charities on board, including the United Way, Children's Miracle Network and World Wildlife Fund. The site has 7,500 members, which he admits is small but predicts that number will grow to 7 million in five years.
In March of 2009, Better the World was named Canada's first B corporation, a designation for companies that meet certain social and environmental performance standards and legally protect those interests through their corporate structure.
Significant growth in this space is on the horizon, says Nicholas Offord, president of the Offord Group, a consultant to charities. "The last data I saw put [charitable]revenues via the Internet at three to four per cent. That was double what it was three years ago. There is lots of unrealized opportunity here."
But whether consumers are ready for a concept such as Better the World's is yet to be determined. "I'm not sure how much advertising people are prepared to troll through to raise a significant amount of money for a cause they care about," he says.
By Mr. Offord's estimation, three main sources of charity fundraising work online: celebrity endorsements, crises such as the Haiti disaster, and events such as runs.
Better the World's success rests instead on a cumulative effect. "I would hope that the collective impact would be as significant as they hope for, but dispersed across countries, sectors and causes, the impact will be diminished," he says.
Still the potential upside for charities looking to drum up funds is also there for the corporations that support them. "There's enormous enthusiasm to access the pre-existing communities that charities have to promote corporate social responsibility," he says.
Getting the word out about a company's good deeds is beneficial in many ways. "We know that virtuous companies have better employee retention," he says. "They are much more likely to work for and stay with companies that are actively supporting employee engagement with charities, and the Internet is a great tool to facilitate that."
It also pays off with customers. "We also know that where price is not a major factor, consumers are going to choose products from virtuous companies."
But when a corporation doesn't really care about a cause it chooses to support, it shows both on the inside and the outside, Mr. Croth says. "If they treat it as a marketing initiative and not a corporate initiative, it's shallow and not embedded in corporate culture and so it doesn't trickle down," he says.
The way to use corporate sponsorship to help build a brand is through a strategy that is aligned with the company's core business. "It can't just be the pet project of the CEO and not have anything to do with the company," he says.
By the numbers
59 per cent: Proportion of Canadians who would be more likely to recommend a brand that supports a good cause than one that doesn't.
62 per cent: Share of Canadians who would switch brands if a different brand of similar quality supported a good cause.
67 per cent: Proportion of Canadians who feel it is no longer enough for corporations to simply give money away to good causes - they need to integrate good causes into their day-to-day business.
87 per cent: Share of Canadians who prefer a brand that supports the livelihood of local producers over a designer brand.
Source: 2009 Edelman Goodpurpose Report
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