Applying eBay to Nonprofits
There are currently around 1.7 million nonprofit organizations in the United States representing over 7 percent of the nation’s GNP (gross national product). Nonprofits are a growing and vital part of eBay through Giving Works auctions, its nonprofit face. To date, over 13,000 nonprofits have registered with eBay, and more than $78 million has been raised through eBay sales.
Selling on behalf of nonprofits is done in three ways:
• You can register as a nonprofit organization and sell items directly to eBay buyers. This is also called being a direct seller.
• You can be a community seller by registering either as a casual seller and contributing a percentage of your sales to a nonprofit of your choice, or as a professional seller (where you have an eBay Store and are selling full-time) and donate a percentage of your auction sales to the nonprofit cause of your choice.
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• You can be a trading assistant/drop-off location/agency selling items for others, and attracting nonprofits to your own business.
All of these methods present innovative ways to raise funds and to reach out to millions of people, finding fresh sources of funds for your favorite nonprofit and exposing your cause to a whole new group of backers. Offering material on eBay can give your nonprofit a constant presence to a worldwide audience. If your nonprofit organization can continuously keep items for sale on eBay, it will provide additional
exposure for your cause. Furthermore, selling goods on eBay offers your volunteers and supporters new and fun avenues to support your cause. Other sellers, in addition to the tax deductions for charitable donations, often find their auctions selling for higher percentages, since people are willing to pay more for charity items, and eBay Giving Works provides more ways to guide buyers to nonprofit auctions.
QUICKFACTS
UNDERSTANDING MISSIONFISH
MissionFish, a service of the Points of Light Foundation, a 501(c)(3) nonprofit, operates the charity auctions for eBay. The charity auctions are known collectively as eBay Giving Works. eBay Giving Works allows nonprofit organizations to raise money for their charitable causes.
Since November 2003, over 13,000 nonprofits have registered with MissionFish, and through it have raised over $78 million. MissionFish does
several tasks for eBay:
•
It enables sellers to sell in-kind donations to raise funds.•
It provides a directory of nonprofits associated with eBay Giving Works.•
It verifies that the nonprofits are real and valid entities.•
It collects the donations of supportive sellers and distributes them for eBay.•
It handles online contribution tracking and tax receipts for sellers.A seller registers with eBay Giving Works to sell a product and agrees to give a percentage of the proceeds (from 10 to 100 percent, stated in the item description) to a nonprofit organization that the seller supports. Before they post an item for sale, sellers must register with MissionFish, who then verifies that the recipient of the donation is a valid nonprofit. MissionFish handles the distribution of the money, so you can be assured that the donation goes to the nonprofit organization.
NOTE
The eBay Foundation in its Community Gives program supports three nonprofits by giving $1 million and then adding one dollar for each donor that chooses that nonprofit. The three nonprofits are First Books to provide new books for low-income children, Best Friends Animal Society to build and support non-kill animal sanctuaries, andOxfam America to provide clean, safe water to people in Ethiopia and Zambia.
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Become an eBay Nonprofit Organization
A nonprofit organization is a legal entity. It is governed by strict laws regarding what makes up a nonprofit organization and how it must be registered with the state. This book assumes that you know those rules and have followed legal advice to set it up properly within state and federal laws.
But once you have become a nonprofit, or decided to support one on eBay, you might wonder, “Why use Giving Works?” After all, you can sell items on eBay whether or not you are registered as a nonprofit. When you are a recognized nonprofit on eBay, however, your items sold through eBay Giving Works are identified by an icon . Your donors can find you on a list of certified nonprofits; you have access to millions of potential donors; and your item will have greater exposure by being listed in four places: in an eBay category, in eBay Giving Works, in your eBay Store, and in your About Me page. The MissionFish home page is shown in Figure 9-1. The percentage being donated to the nonprofit will appear in the description of the item, for most items. It may not appear for items sold by third parties, such as trading assistants.
In order for a nonprofit organization to benefit from Giving Works, it must possess the following characteristics, as determined by eBay, that distinguish the organization from a for-profit or nonqualified nonprofit group:
•
The group provides a public service. What determines a public service varies widely. It can be a prosperous multimillion-dollar-based college or a small, struggling childcare facility. Among the organizations that are allowed are 501(c)(3) nonprofits, religious organizations, local chapters of larger nonprofits (such as Lions, Red Cross, or Rotary), small nonprofits (under $5,000 in revenue), and government agencies.TIP
To find eBay’s nonprofit auction pages, click Giving Works at the end of the Categories sidebar on the home page.
TIP
Direct-seller nonprofits do not use MissionFish to receive and distribute funds; rather, they handle these activities themselves.
Browser Earl says:
“Find out about the Points of Light Foundation at www.
pointsoflight.org, and research MissionFish at
www.missionfish.org.”
Browser Earl says:
“Look through GuideStar’s database of 1.7 million nonprofits
for information on tax-exempt nonprofits registered with the IRS at www.guidestar.org.”
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Figure 9-1: The MissionFish home page is one place you can register to be certified as a nonprofit.
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•
The group is exempt from paying federal taxes.•
The group possesses special status that allows gifts to be tax-deductible.•
The group must not have self-interest or private financial gain.•
The group does not engage in illegal or terrorist activities.•
The group accepts electronic funds transfer (EFTS) payments.Keep Your Nonprofit Viable
A nonprofit corporation has just as much need for planning and managing as does a for-profit corporation. Perhaps there is even a greater need, since nonprofits don’t have a built-in requirement to stay solvent—the organization is built around the mission rather than around making money. Planning is essential to keeping a nonprofit viable.
CREATE THE PURPOSE OR MISSION OF THE NONPROFIT
One of the main differences between nonprofit and for-profit organizations has to do with their mission, or purpose for existing. For-profit corporations exist to make money for their owners or investors, while nonprofits raise money for a public purpose. This is a rather significant difference, and some of the potential impacts include the following:
•
There really is no “ownership” in nonprofits. No one owns the corporation; therefore, no one personally receives the donations. At the same time, a nonprofit can be profitable.Funds go back into the nonprofit corporation’s operations rather than to an individual.
Nonprofits can be highly innovative, energetic, and entrepreneurial; or they can be conservative and cautious in their fundraising approaches and in fulfilling their mission.
QUICKFACTS
RAISING FUNDS
Fundraising consists of establishing relationships with as many people as you can, identifying your donors, planning events, and following up when donations are made with thank-yous and other outreach efforts. Using eBay as a part of your overall fundraising helps to maximize your donor base. To get to Giving Works, click Giving Works at the bottom of the Shop Your Favorite Categories list on the home page. Figure 9-2, displayed when you click Are You A Nonprofit on the Giving Works header, explains how eBay Giving Works helps.
IDENTIFY DONORS
Fundraising is all about establishing relationships. You need to get and keep donors to ensure your organization’s success. The first step is to identify donors. Potential sources include:
•
Present and past board members•
Volunteers•
Present and past donors•
Vendors or suppliers•
People responding to the mission or purpose of the nonprofit•
The targeted service group (if feasible—the homeless, for example, would not necessarily be a good donor base)Continued . . .
Professor Polly says: “Some organizations do not qualify to be nonprofit organizations. These
include political organizations, private foundations, fraternities
or sororities, business or homeowner associations, or other organizations with tax-exempt but
not tax-deductible status.”
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•
It is much easier to tell if a mission is being met for a for-profit than for a nonprofit. The for-profit has the purpose of supplying something to a market, and if people buy their product or service and the corporation is profitable, then the mission is met. This is not the case with a nonprofit. Here, the success of a mission is often murky or hard to quantify. For example, how easily can you determine if a shelter for the homeless is meeting its mission? Is it by the number of homeless people who stay there? Is it by the numbers of new people who pass through? Is it by the absence of homeless people living on the nearby streets? The measurements of a nonprofit are often intangible and subjective. It has less to do with money raised and more to do with another purpose altogether.•
Survival of a for-profit is not an issue of controversy. If the corporation makes money, then the company survives. If it does not make money, then the corporation does not survive (although it may not be obvious for a while that it is not surviving). A nonprofit also has a need to survive, but there is more to it than just meeting the bottom line.There are questions around whether the mission is being met, as well as whether the group is financially viable. A constant pull exists between spending money to preserve the company versus spending money on the mission (that is, spending to keep an accounting employee versus spending to acquire another bed for a homeless person).
For these reasons, it is critical that a nonprofit develop a business plan that contains all the elements of a for-profit plan: a vision statement, a mission statement, and goals and objectives. There needs to be a broad statement of the dream or vision, a concise statement of how the vision will be fulfilled, and details about how the nonprofit will operate. These factors will help you evaluate whether you are meeting your purpose. The following is an example of a nonprofit’s mission statement and goals:
•
Mission Statement: To provide shelter for the homeless on Washington Island•
Goals:•
To provide breakfast and a warm dinner per day for residents•
To provide safe shelter for up to 20 individuals a night during normal weather•
To provide emergency shelter for up to 35 individuals a night during severe weather•
To provide linens and towels, soap and shampoo, tooth care supplies, and showers for residents•
To provide a network within the community for full-time and part-time jobs for residentsQUICKFACTS
RAISING FUNDS
(Continued) ESTABLISH RELATIONSHIPSEstablish relationships by keeping in touch with your employees, donors, and volunteer base. Ways to do this include:
•
Follow-up with immediate thank-you letters for donations.•
Send regular e-mail notices regarding your organization’s activities. Send announcements of related events, introduce new personnel, and announce awards won or pending, or any other news pertaining to the organization.•
Send flyers on new legal challenges or accomplishments.•
Give parties, lunches, or other special events to recognize volunteers or donors.•
Send out press releases to recognize people and announce upcoming events.TIP
Notice that the goals did not include providing shelter for all the homeless on Washington Island. Only 20 persons can be sheltered during the summers, and up to 35 can be sheltered during emergencies. This is an essential part of defining a nonprofit mission: You must provide boundaries or limits to your mission; you can’t do it all.
Professor Polly says:
“You cannot tell if your nonprofit mission is being
met if you do not have goals and objectives that
you can track.”
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Figure 9-2: Using eBay as a part of your overall fundraising is another way you can maximize your donor base.