Online Coupon Deals Increasingly Benefit Charity

Customers aren’t the only ones benefiting from an explosion of “deal of the day” Web sites, which offer discounts from local businesses if enough people sign up for them. Some nonprofits are working with the sites—CauseOn, Deals for Deeds, Groupon, LivingSocial, and Mulamu, among them—to raise money.

In the most successful example to date, DonorsChoose brought in $162,000 when, in May, it was featured as Groupon’s daily deal in several large cities.

DonorsChoose, which provides teachers with a way to publicize classroom projects for which they need financial support, used a grant from the Pershing Square Foundation to match money that Groupon customers spent on charitable-gift cards.

For example, if a Groupon customer paid $25, that person was able to give $50 to education projects on the DonorsChoose Web site, because the foundation grant underwrote the difference.

Small but Helpful

DonorsChoose is the only charity so far to be featured as a Groupon deal of the day, however, and other nonprofits that are working with the online coupon companies are raising much smaller sums. But fund raisers say the arrangements are helpful because they give charities free exposure and don’t require much work.

For example, the American Cancer Society’s Chicago affiliate worked with Groupon to offer the chance to participate in a sold-out fund-raising half marathon, with free training and other benefits provided by the charity, as a “side deal.” Information about side deals is mentioned in the company’s daily e-mail blasts but not prominently.

Still, in 10 hours, nearly 100 people signed up for more information about the event through a landing page the charity had created, and 10 runners ended up participating as a result of learning about it through Groupon.

Building Community

Getting that many people often requires the charity to hold two or three volunteer-information sessions, says Ann McNamara, vice president for annual giving. “We were ecstatic.”

Groupon was receptive to working with DonorsChoose and the American Cancer Society in part because the charities presented “deal”-style opportunities, something officials from the two groups would recommend to other nonprofit leaders. “Nonprofits have to be thoughtful about how they would work as a deal of the day,” says Thalia Theodore Washington, vice president of the east region for DonorsChoose. “I don’t know that every nonprofit has something that’s easily translated into a retail model.”

Meanwhile, more online coupon companies are being created with a commitment to give a share of their sales to charities, and they don’t expect nonprofit groups to make the same retail-type pitch. They are instead looking for local organizations that can help them build a sense of community and spread word among their supporters.

Miriam’s Kitchen, which works with homeless people in Washington, will receive about $560 from its partnership with Deals for Deeds, a group-purchasing site that for now works only with businesses in Washington but plans to expand to other cities. Deals for Deeds, like CauseOn and Mulamu, donates a portion (in Deals for Deeds’ case, 5 percent) of its sales to local charities.

Miriam’s Kitchen was one of three nonprofit groups that benefited during the month of August. People who bought Deals for Deed coupons got to choose which of the groups they wanted to benefit, and Miriam’s Kitchen secured the most clicks. (By contrast, the Epilepsy Foundation of Metropolitan Washington received just over $200). Sara Gibson, director of development, says Miriam’s Kitchen, publicized the partnership on Twitter and its Web site but didn’t have to put in much effort beyond that.

“To know that we’re raising money doing almost nothing is always a gift to our nonprofit,” she says.

The arrangement worked especially well, she says, because it provided much-needed cash during the fund-raising doldrums of August.

Using Coupon Sites: Tips for Charities

• People who receive online coupons tend to be younger. Is your organization’s “deal” appropriate for that audience?
• Timing matters. Don’t publicize events just days before they occur, and do consider whether certain seasons (back-to-school, for example) are the best times to promote your group.
• Pay attention to the other businesses and organizations on the site to be sure you’re comfortable being associated with them.
• Make sure you have Web tools in place to measure whether the effort has been a success.