Web sites like Groupon.com, which offer online coupons to local businesses if enough people sign up for them, aren’t just a good deal for consumers. Some charities are benefiting, too.
A new group-purchasing Web site called CauseOn, unveiled today, is committing 20 percent of its revenues to local nonprofit groups. Users will have some say in where the money goes. And Groupon, the father of such online-coupon companies, has tried a handful of ways to bring nonprofits to the attention of the approximately 12 milion people who subscribe to its daily e-mails.
Perhaps the most fruitful partnership has been with DonorsChoose, the nonprofit group that provides teachers a chance to publicize classroom projects for which they need money. In May, Donors Choose raised $162,000 when it was Groupon’s featured daily deal.
The nonprofit group used a grant from Pershing Square Foundation, the philanthropic arm of Pershing Square Capital, to match money that Groupon users spent on charitable gift cards to Donors Choose. For example, if a Groupon user paid $25, that person was able to give $50 to education projects on the Donors Choose Web site, because the foundation underwrote the difference.
Nearly 1,500 coupons were sold, many of them to people unfamiliar with DonorsChoose, according to the organization.
Groupon hasn’t done other such charity deals, in part because the nonprofit must first come up with matching money. But Groupon, which evolved from a Web site called the Point, which encourages people to take collective action, offers a few other ways to help.
For example, the Chicago company allows charities to advertise for free on its Web site. Groupon worked recently with the Chicago affiliate of the American Cancer Society to publicize a local fund-raising event.
CauseOn, which is starting in Portland but hopes to expand to other cities soon, has signed on five local charities, including Susan G. Komen for the Cure Oregon and South Washington and the YWCA of Greater Portland. It will likely be entering the New York City market next, says Craig W. Barnes, its founder, and will be seeking nonprofit groups there to work with.
Mr. Barnes, a Portland technology entrepreneur, says that if all goes well, the Web company should generate $50,000 to $75,000 monthly for nonprofits in each city in which it operates.
Christine McDonald, executive director of the Komen affiliate, said she envisions the arrangement requiring little work of her charity.
“We see this as a revenue stream that will grow and grow,” she said.