Richard Waldvogel’s loss is producing gains for some Colorado nonprofits.
Waldvogel, a 36-year-old software developer, last year co-founded Longmont’s Givezilla Nonprofit Technologies after a friend died of breast cancer.
“At that point I had not done too much with nonprofits other than buy Girl Scout cookies,” he recalled. “This, in some ways, is my gift.”
Givezilla, a for-profit company, partners with Internet retailer Amazon.com to help nonprofits retain up to 10 percent of product sales made on their websites. The company also plans to offer other Internet services to nonprofits, including website design and donor e-mail.
In the late 1990s, a variety of companies offered similar Internet services to nonprofits. However, the sector cooled when the dot-com bubble burst.
Recently, as charitable organizations seek to increase their Internet capabilities to attract donors and to stay in contact with current ones, for-profits that help nonprofits have come back into the picture.
Another driver: As the nonprofit industry expands, “the pie is getting much bigger in terms of the number of nonprofits (the companies) can work with,” said Charley Shimanski, who heads the Colorado Nonprofit Association.
In 1994, there were 10,500 nonprofits in Colorado. Today, there are 17,400, according to the association.
However, some, Waldvogel among them, wonder whether such for-profit companies can survive by catering to nonprofits alone.
“It doesn’t put too much in our pockets,” Waldvogel said of Givezilla. “But we are focusing on the nonprofits because they need it most.”
$15.4 billion industry
Givezilla counts 25 Colorado nonprofits and one Pennsylvania school as clients. The company has applied for a patent for its software.
At least one other company, GMP Services in Statesboro, Ga., has emulated Givezilla’s partnership with Amazon, Waldvogel said. “They said, ‘Hey, we can do that too.”‘
In Colorado, the nonprofit sector is a $15.4 billion industry by revenue, Shimanski said. The sector represents about 6 percent of the state’s economy, roughly the size of the state government. Nationally, public charities in 2003 represented a $993.6 billion industry, according to National Center for Charitable Statistics.
“People who provide nonprofit services … have realized” the sector’s size and magnitude,” Shimanski said.
Whole Brain Technologies of Louisville specializes in designing websites for nonprofits. Fifty percent of its clients fall into that category, chief executive Teri Robnett said.
More companies are trying to help nonprofits with online donations and to craft professional-looking sites, she said.
In the past, those efforts were performed by volunteers. But as nonprofits become more dependent on the Internet, for-profit companies are stepping forward.
Most nonprofits operate with limited budgets, but several Colorado companies have carved a niche catering to them.
Blacktie-Colorado.com, for example, auctions items and sells tickets to nonprofits’ events. Blacktie, started in 2000, lets nonprofits post event announcements on its website for free.
Nonprofits purchase a Blacktie membership, which ranges from $300 to $1,500 a year depending on their operating budgets. The company has 350 members in Colorado.
It has recently expanded to Arizona, Cleveland and Pittsburgh, president Elizabeth Byrnes Crony said.
Even without the help of for-profits, nonprofits are increasingly using the Web to find additional revenue, said Jill Finlayson, author of “Fundraising on eBay.”
Online donations to nonprofits have increased by double- and triple-digit percentages over the past two years, said Finlayson, a former eBay senior executive.
Waldvogel’s company, Give zilla, attempts to create a new revenue stream through Internet-based product sales.
It splits the proceeds with the nonprofit, keeping 30 percent for itself.
Partnership “stores”
How it works:
Givezilla partners with nonprofits to create “Amazon.com stores,” which enable nonprofits to sell various products such as T-shirts, books and music CDs. Instead of sending shoppers to Amazon, Givezilla allows shoppers to purchase products directly from the nonprofits’ websites.
Givezilla then logs each sale, and at the end of each quarter cuts checks to the nonprofits.
Amazon lets nonprofits, for-profits and individuals do something similar. But because Givezilla acts on behalf of many nonprofits, Amazon combines sales from all Givezilla clients to determine the percentage to be returned.
Without Givezilla, for example, a nonprofit that sells 10 books would receive 5 percent back from Amazon. By using Givezilla, those books would be added to Givezilla’s other clients’ sales, enabling each nonprofit to retain up to 10 percent.
“These types of consortiums are really useful for a young, small organization like ours,” said Ann-Elizabeth Nash, head of Longmont’s Colorado Reptile Humane Society, a Givezilla client.
Staff writer Will Shanley can be reached at 303-820-1260 or wshanley@denverpost.com
