How the web is changing the face of charity

Social networking sites offer a more personal approach to charity, writes David Prosser

Madonna's adoption of a Malawian "orphan" may have attracted huge criticism, but there's no denying that the pop singer has made a very personal and direct commitment. And in one sense, the adoption is the natural extension of a growing trend among charity donors, who increasingly want more control over where their money goes and an ongoing relationship with the causes they support.

"It used to be that people were happy simply to put cash into a collecting tin," says Jane Moyo, of the charity Action Aid. "People now want to feel much more connected to the recipients of their donations."

So much so that several websites enable charitable supporters to establish a direct link with small projects from all over the world - and to choose which specific projects to support. The sites marry the concept of social networking - the domain of MySpace and Bebo - with charitable giving, by enabling potential donors and projects in need of support to meet and talk online.

Global Giving is a typical example. Set up three years ago by two former World Bank employees, it aims to match up donors with small-scale projects all over the world. The projects all have their own pages on Global Giving's site (at www.globalgiving.com), with details of how much they need and where the money will go.

"Our founders had years of experience running multi-million-dollar development projects but became frustrated that they never saw how people's lives were changed on the ground," explains Joan Ochi, a director. "The idea of our site is to connect the many to the many, to democratise the concept of philanthropy."

Would-be donors can search the site by cause - from Aids relief to climate change - or by geographical region. Donations can be as small as you want and it's possible to get in touch with project leaders before committing money. The site also enables you to get continuous feedback on how your money is being used.

Another option for charitable networkers is Kiva (at www.kiva.org), which offers the chance to get involved in microfinance. This is the field in which Muhammad Yunus, the Bangladeshi professor who founded the Grameen Bank more than 20 years ago, has just won the Nobel Prize for Peace.

Professor Yunus's idea, which has been copied all over the world, was a scheme that would lend money to poor people to help them start or develop their own businesses. The Grameen Bank has lent millions of pounds to people who would otherwise not have been able to borrow cash, or would have had to pay extortionate interest rates. Bad debt ratios have confounded sceptics, with 98 per cent of borrowers repaying what they owe.

The Grameen Bank accepts donations from anyone who wants to support the microfinance movement. What it doesn't do, however, is give you any choice about the projects you'd like to support.

Kiva, on the other hand, lets you choose the individual project to which you'd like to loan money. Its pages resemble an online dating agency, with hundreds of would-be entrepreneurs from low-income areas around the world asking for financial support.

The projects are vetted by local microfinance organisations with which Kiva has partnered. You loan money interest-free and the business keeps in touch with regular progress updates and eventually repays your money.

Kiva's Fiona Ramsey says the site has only been made possible by the sort of social networking technology pioneered by entertainment services. "We call this philanthropy 2.0," she says. "We started out just wanting to connect people and as we develop we'll be adding more social networking concepts."

Terry Brown, of the Charities Aid Foundation, says that while sites that enable users to social network for charitable causes are mostly based in the US, the idea is beginning to catch on in the UK.

In one sense, where a site is based doesn't matter. Just as the internet enables projects and charities from all over the world to appeal for funds using a single medium, so the location of the site's founders is irrelevant to donors (although UK supporters of Global Giving and Kiva will have to be prepared to accept exchange-rate costs, as these sites trade in dollars rather than sterling).

Even so, Brown believes UK charities could tailor the approach so as to appeal for funds specifically for British projects - and that there's plenty of room for more sites.

"There is definitely a place for an approach such as this," he says. "The huge success of the Good Gifts catalogues over the past couple of years shows that many people are looking at new ways to get involved with charitable causes."

Robert Bailey, a policy adviser at Oxfam, thinks this sort of model, with people giving to more specific projects, is likely to become increasingly common. In December, the charity will launch its Top Projects internet site, which will give donors a wide choice of specific initiatives to support.

"People do like to see how their money is spent," says Bailey. "Top Projects will allow individual donors to support the specific scheme of their choice and they'll get feedback on how the project is progressing."

Still, there are potential problems. For example, one reason why many donors say they want a more direct relationship with the causes they support is the suspicion that not all charitable donations end up where they should. But allowing projects and charities from all over the world to appeal for cash could make internet sites a target for criminals. How can you know that what looks like a worthwhile project on the other side of the world is what it says it is?

Sites such as Kiva and Global Giving work with locally based organisations in order to vet fundraisers. Oxfam, meanwhile, will be managing its own projects, so the question of corruption does not arise. However, as the number of internet sites operating in this way develops, scams are more likely.

The other issue is that, while giving to good causes in this way may be personally fulfilling, it is not necessarily economically efficient. Bailey says: "All charities have to balance the trade-off between enabling people to get as close to a project as possible while managing the costs and time involved in doing this."

Ensuring that small individual donations end up on a very specific project is an expensive piece of administration, Bailey points out. And in any case, charities need support quickly - advertising on the internet and waiting for money to arrive in dribs and drabs may be a frustrating process for project leaders.

Nonetheless, Bailey believes this type of giving is to be applauded. "It's a positive thing that people are taking a much more active interest in how they give to and engage with charity."

'We bring the school to the child'

A project in the Indian state of Orissa is a successful example of the Global Giving concept. Last year teacher Inderjit Khurana appealed for more than $100,000 (£50,000) to set up classrooms in train stations, where she regularly encountered dozens of children begging.

Milton Leitenberg, an American donor, saw the appeal of Global Giving and made a donation. He also e-mailed 50 friends, who backed the project, too - eventually the target was met in full. The classrooms are now set up, as part of a programme offering healthcare, job training and even shelter.

Khurana says the project would never have got off the ground had it not been for this new source of funding. "If the child cannot come to the school, the school must come to the child, the most marginalised ones," she says. "These schools accept no barriers to take education to all."

Sponsor a child: how we used to give directly before the online age

Sponsoring a specific child in a developing nation is another way to establish a very direct connection with a good cause you want to support, though you may have less choice than you would with an online social networking site.

At Action Aid, for example, sponsoring a child costs from £15 a month. It's worth pointing out, though, that your money does not necessarily go directly to the child. The charity says 80 per cent of this money is spent directly overseas, while the remaining 20 per cent is spent on priority activities such as responding to emergencies, campaigns and finding new sponsors.

However, the charity guarantees that the value of your monthly gift will be spent on funding work in the community where the child you sponsor lives. Richard Bailey of Oxfam says: "This is the best way to balance local needs with the fact that people want to sponsor individual causes."

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

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