Reprinted from Washington Post Magazine – Original article can be found by clicking here

App review: CauseNetwork lets shoppers donate, retailers look good

by Aaron Gregg – December 17, 2015

Doing your last-minute shopping online? Have a favorite charity? If so, you might want to consider CauseNetwork, a McLean, Va.-based start-up that has created a self-described “marketplace for giving.”

“Think of us like LivingSocial or Groupon for charities,” says co-founder Glen Gulyas.

But be aware: This is a for-profit venture, and charities aren’t the only ones benefiting.

Here’s how it works: A shopper picks one of 120 charities on CauseNetwork’s site or its free apps (iOS and Android) and clicks through to an online vendor such as Amazon.com or Priceline.com. As long as the shopper starts from CauseNetwork’s site, the start-up will give up to 10 percent of the purchase price to the chosen charity. It makes money by taking a commission.

Cash-strapped nonprofits get a free and entirely effortless way to raise money. The retailers involved don’t mind paying a commission if it means more shoppers.

Plus, they get to position e-commerce as a form of charitable giving.

“The retailer walks away with what the industry calls a ‘halo,’ ” Gulyas said.

I logged in and bought a used 70-cent copy of “The Taylor Swift Holiday Collection” from Amazon for my chosen cause, America’s VetDogs, which provides service dogs for veterans.

Amazon advertises a 5 percent donation for VetDogs, so presumably this transferred 3.5 cents to the organization. How much did CauseNetwork get? I don’t know.

The portion that ends up going to charity is clearly and ostentatiously displayed on the vendors’ sites. But information about CauseNetwork’s commission is nowhere to be found. Each cut is negotiated separately with the vendors, CauseNetwork says, and its commission never exceeds the amount given to the charity.

The company says that in the six-month period ending Oct. 1, it passed about 75 percent of the money generated from retailers on to charities in its network, keeping a quarter for itself.That’s not much, considering that the company says it generated only about $20,000 during that time.

Such a tiny revenue stream is normal for early-stage start-ups, which typically don’t make any money in their first few years (CauseNetwork was founded in 2012). So far, the company has been subsisting on $1.7 million of investment money raised largely from the co-founders’ friends and family.

CauseNetwork is not the only for-profit company trying to monetize charitable donation. Facebook just released an in-line “donate” button. District start-up GoodWorld and California-based Total-Apps both operate donation platforms. Amazon’s AmazonSmile feature works almost exactly like CauseNetwork.

Such ventures offer “a nice opportunity to do good and do well at the same time,” said CauseNetwork president Clay Buckley.

The site is fast, functional and seems to be free of glitches — if you can get on it. The first time I tried to visit causenetwork. com, the site was down. Its founder was surprisingly candid about why. “We just had an attack on our site,” Gulyas told me.

It’s in good company: Target, JPMorgan and even the federal government have been attacked. Make sure you have a super-strong password before you shop on.

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