Charity should begin on the Web

"The internet is going to be the most powerful driver of change in not-for-profit organisations in the next decade, for good and for bad. At the moment, charities are not keeping up. They're not seeing the opportunities," says Joe Saxton, author of "Virtual Promise", a recent report into the relationship between charities and the internet, produced by the UK think tank the Future Foundation with Howarth Consulting.

"The internet is going to be the most powerful driver of change in not-for-profit organisations in the next decade, for good and for bad. At the moment, charities are not keeping up. They're not seeing the opportunities," says Joe Saxton, author of "Virtual Promise", a recent report into the relationship between charities and the internet, produced by the UK think tank the Future Foundation with Howarth Consulting.

There are at least three good reasons to believe the Web has a lot to offer charities if they can learn to grasp its potential: Comic Relief, Christian Aid and the Charity Aid Foundation (CAF). Comic Relief and the CAF have taken millions of pounds in donations over the internet. This year Comic Relief took more than £3m in donations over the Net, nearly 10 per cent of the total raised during the Red Nose Day events. It is a huge achievement, one that could potentially shake British charities out of their reluctant attitude towards the Web.

But Comic Relief's success will be hard for other charities to emulate. It came on the back of unprecedented national publicity and the support of a range of corporate sponsors, including the BBC. Indeed, the Red Nose Day website was built for free by Cisco Systems.

Without the prominence of Red Nose Day, charities can find the going more difficult, but it can still be rewarding. The CAF, a national group that offers secure donation facilities, has raised more than £1.1m over the Web for participating charities. That shows that online donating should be taken seriously, according to Sarah Norris, head of new media at the CAF.

"Use of the internet by UK charities is a lot stronger than in many countries. It's true that news stories about security breaches and credit-card fraud have caused charities to be sceptical and afraid," Ms Norris says. "But online donations are growing and via CharityCard, a service provided by CAF, small organisations without a Web presence of their own are receiving regular gifts."

Another charity that sees the potential of the Web is Christian Aid, which yesterday launched fish.co.uk, a subscription-free internet service provider. For every minute users are online, the phone company will donate a percentage of the charges, while the search engine Ask Jeeves will donate 4p for each search made by fish.co.uk users.

"For the first time, people will feel good about their phone bill, knowing that some of it will go to the world's poorest people," says Simon Jenkins, fish.co.uk's editor.

Unfortunately, CAF, Comic Relief and Christian Aid are the exceptions. British charities have been slow to adopt the internet at every level, not just for getting donations, but also to help with cost cutting and to create virtual networks of supporters. Joe Saxton invited more than 200 chief executives of charities to the launch of his report into charities and the Web. "Only one came. That tells you something about how charities see the Web. They haven't got the internet under their skin," says Mr Saxton.

There are three financial uses of the internet for charities: getting donations, cutting costs and raising advertising revenue. Most of the charities across Europe that The Independent spoke to are not capitalising on any of them. The main reason is that charities are notoriously slow to change, both because investing other people's money causes hesitancy and because of a conservative approach to technology.

"They are taking it slowly. In the United States they say that the average dot.com does in six months what most companies do in a year," says Mr Saxton. "I think you find that most charities do in two years what an average company does in a year."

The internet can save money by lowering mailing costs, phone calls, paper work and administrative time. But these are all benefits to which many charities are only just waking up.

One exception is a UK charity with a £50m turnover that saved £1m last year by purchasing on the internet. Most of these savings came from getting the cheapest prices, avoiding multiple orders and saving administrative time. For Mr Saxton, this is the most significant financial contribution that the internet can make. "It would be much, much easier to save a million pounds through the internet than raise a million pounds."

One of the leading commentators on the area, Howard Lake, believes the reason charities have not benefited from the Net is because they have not understood how it works and what it can do for them.

The author of the first book about internet fundraising, Direct Connection's Guide to Fundraising on the Internet, and the founder of the first site in the UK trying to get online donations, Fundraising UK, Mr Lake says that charities have a long way to go in embracing the Net's potential. "In terms of income generated, UK charities have gained less than US charities. Charities have to gain an understanding of how people use the Net. They use it for entertainment. How many charities' websites are amusing?"

Moreover, Mr Lake argues that potential donors are being ignored because of misconceptions about who is using the internet. For example, hardly any sites are targeting older people, even though bequests make up a massive part of most charities' income and older people are increasingly logging on.

But there is one reason for self-congratulation. Across much of the rest of Europe, the status of e-philanthropy is worse than in Britain. For example, the German Red Cross raised only DM80,000 (£26,300) on the internet last year ­ and that was more than any other German charity. One report found that only 10 per cent of German sites offered facilities for online donations, and that only two of those accepted credit cards.

Charities have proved to be good at publishing information on the Web, but not so good at creating online communities, helping to link up individuals who would otherwise not meet. The Save the Children Fund has shown how useful online communities can be. In the past few months it has linked Palestinian and British children over the internet. International phone prices would have prohibited any other meeting. Frances Ellery, Save the Children's head of publications, believes these links have been eye-opening for children from both countries.

Fathers Direct is a new online service providing advice and a forum for discussion for fathers. Run on a shoestring by four people, it has managed to offer a national service because of the internet.

Similarly, Bullying Online offers support to the families of children afflicted by bullying. It is essentially run by Liz Carnell and her son without any budget ­ the only financial support is what she earns through giving lectures. While these are part of a new breed of small charity made possible by the internet, neither is a runaway dot.com success, growing faster than their real-world equivalents.

Eight per cent of UK gross domestic product ­ £4.8bn a year ­ is accounted for by the voluntary sector. Most of us either give money or volunteer at some time. Given that presence, charities denying the Net's benefits are wasting everyone's money. They are going to have to grow up.