EVALUATING GOODSEARCH:

EFFECTIVE E-PHILANTHROPY OR FUNDRAISING FAD?

By

ANN MITCHELL ROPER

A paper submitted to the faculty of

The University of North Carolina at Chapel Hill

in partial fulfillment of the requirements for the degree Master of Public Administration

MARCH 4, 2010

This paper represents work done by a UNC-Chapel Hill Master of Public Administration student. It is not a formal report of the Institute of Government, nor is it the work of School of Government faculty.

Executive Summary

Nonprofit organizations are increasingly engaging in online philanthropy to promote their mission,

communicate with constituents, and fundraise. In 2005, the GoodSearch search engine emerged, donating $0.01 to a user‘s designated charity for each Internet search conducted through the site. Partners with

Yahoo!, GoodSearch makes surfing the web charitable. The purpose of this study is to determine which

organizations are raising more money than others using GoodSearch and what factors are associated with increased revenue. Analyses demonstrate that while GoodSearch generated less than $100 for 89 percent

of the sample, factors such as mission, years of use, and online promotions increase revenue. The findings

provide nonprofit managers and fundraising professionals insight into the effectiveness of GoodSearch as an illustration of emerging e-philanthropy tools.

1

BACKGROUND & RESEARCH QUESTION

Nonprofit organizations are increasingly engaging in online philanthropy to promote their mission,

communicate with constituents, and fundraise. Volunteer-matching websites, strategic email marketing,

social media tools, and click-and-give sites abound.1 In its 2000 review of e-philanthropy, the W. K.

Kellogg Foundation identified more than 100 websites with a charitable focus.2 These websites range from social advocacy and donor services to e-commerce and profit-sharing. GoodSearch emerged in 2005

as a profit-sharing site with a search-and-give theme, donating $0.01 to a user‘s designated charity for

each Internet search conducted through the site. GoodSearch partners with Yahoo! to make surfing the web charitable, estimating $7,300 in annual revenue for organizations with 1,000 supporters who use the

site daily.3 GoodSearch is an example of the ―online phenomenon of giving without giving,‖ making it

easy ―for anyone – even children – to ‗raise money‘‖.4

Research on the success of basic online fundraising methods varies, raising questions about the

effectiveness of online fundraising and emerging e-philanthropy websites. Recent studies indicate that

while total revenue generated online significantly lags behind donations received offline5, more donors chose to give online in 2008 than in prior years.6 With more donors giving online, e-philanthropy tools,

like GoodSearch, could be effective fundraising strategies for nonprofit organizations. To date, however,

no studies have specifically evaluated these tools, leaving nonprofits without guidance about whether e-philanthropy will work for their organization.

Anecdotal evidence presents an unclear picture of GoodSearch‘s success. GoodSearch markets the success of 15 organizations that have earned more than $5,000 through the site, including the American

Society for the Prevention of Cruelty to Animals and the Cystic Fibrosis Foundation‘s $28,000 and

$12,000, respectively.7 In contrast, The Herald Sun‘s informal, randomized survey of 25 Durham-based

nonprofits registered with GoodSearch found revenue less than $200 for the second highest earner.8

Without any studies specifically analyzing GoodSearch or similar profit-sharing websites, the success of

these tools as fundraising strategies for nonprofit organizations remains largely unknown.9 This study

seeks to address this gap in the literature and provide development professionals insight into online fundraising tools, in general, and GoodSearch, in particular, by answering the following question:

Using GoodSearch, which nonprofit organizations are generating more revenue than others and why?

METHODOLOGY

This study features a mixed-method design with quantitative and qualitative components to determine

which organizational factors and marketing strategies are associated with increased GoodSearch

revenue.10 A random sample of 400 nonprofit organizations registered with GoodSearch was gathered for this study using a random number generator.11 Total GoodSearch revenue for each organization in the

sample was obtained through the agency‘s GoodSearch profile. For the quantitative analysis, data were

gathered on 10 independent variables including organizational characteristics, such as location, age,

income and mission, as well as online presence and general GoodSearch use (See Appendix B for all variables).

The qualitative component included a 14-question online survey distributed to the sample to identify additional characteristics and marketing strategies associated with increased GoodSearch revenue (see

Appendix C for survey questions and results). Forty-four organizations in the sample responded to the

survey for a response rate of 11 percent. Independent variables measured through the quantitative analysis and online survey were selected based on research identifying the impact of certain organizational

characteristics and marketing techniques on the success of online fundraising.

2

Statistical analyses used to answer the research question included a multivariate regression analysis of variance (ANOVA) and difference of means t-tests. The regression analysis examined the influence of

several independent variables on total GoodSearch revenue. The t-tests analyzed significant differences in

GoodSearch revenue between two groups of survey respondents according to selected independent

variables.

LIMITATIONS

Several factors limit this study‘s findings and analysis. First, in order for the entire sample to receive the

online survey of their marketing strategies, organizations without an email address were excluded from the sample. This sampling bias impacts the ability to generalize study findings to the entire population of

more than 87,000 organizations registered with GoodSearch, as those that provide an email address on

their GoodSearch profile may inherently differ from those that do not. Second, due to time and data

restrictions, this study does not measure all variables potentially impacting GoodSearch revenue, such as user motivations and Internet-searching habits, word-of-mouth marketing strategies, and other

unidentified factors. Third, the low survey response rate of 11 percent limits the ability to generalize

survey results to the 400 organizations in the study sample or the larger GoodSearch population. Finally, this study does not consider the non-financial benefits of using GoodSearch, such as improving public

relations, responding to donor or board member demands, and establishing an integrated online

fundraising strategy.

FINDINGS & ANALYSIS

GoodSearch Yields Minimal Revenue

GoodSearch generates less than $100 for the majority of organizations in the sample, questioning its

effectiveness as an online fundraising tool. As Figure 1 shows, nearly 89 percent of organizations in the sample earned less than $100 through GoodSearch as of September 30, 2009, with 23 percent earning

nothing. Only two percent generated more than $500 up to the maximum of nearly $1,700.12 In fact, each

sample organization‘s total GoodSearch revenue represents less than one percent of its total

organizational income, as reported on the 2008 IRS Form 990.

Figure 1. Revenue Generated by GoodSearch

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Furthermore, the marketed success of certain organizations on the GoodSearch website is misleading. A

brief review of these ―success stories‖, which were not randomly selected for analysis in this study, demonstrates the tool‘s minimal impact on total organizational revenue. While the American Society for

the Prevention of Cruelty to Animals, for example, earned approximately $10,000 in 2008 through

GoodSearch, this amount equals less than one percent of the organization‘s $127 million in total revenue

for the same year.

Revenue Increases with Use

GoodSearch revenue increases each year organizations use the tool. As Figure 2 shows, total average revenue increases over time from $3.53 in the first year of use to $82.19 in the fourth year of use. A

statistical regression analysis of variance demonstrates that organizations earn an additional $28 (p <

.001) for each year of GoodSearch use.13 Organizations currently registered with GoodSearch, therefore, will continue to generate modest revenue over time. However, according to the survey results,

GoodSearch revenue does not strongly correlate with the frequency with which agencies promote the tool.

Figure 2. GoodSearch Revenue Increases with Time

Mission Matters As the regression results in Table 1 indicate, two nonprofit missions are significant predictors of GoodSearch revenue. Organizations with a religious mission14 earn approximately $87 more than other

organizations (p < .001). Nonprofits with services related to sports and recreation, such as school athletic

teams, earn $66 more than other organizations in the sample (p < .05). This increased revenue could result

from a variety of factors not explicitly examined in this study. Religious or sports organizations may have a larger number of supporters than organizations with other services or promote GoodSearch with

unidentified strategies. This finding indicates the need for additional research examining whether the

success of e-philanthropy tools varies according to organizational mission.

Table 1. Regression Analysis of Variables Impacting GoodSearch Revenue

Independent Variable Unstandardized Coefficient

Religious Mission (excluding churches) 87.09**

Sports & Recreation Mission 66.41*

GoodSearch Logo on Website 69.29**

Years of GoodSearch Use 28.02**

R2 = .356, Adjusted R2 = .303, F = 6.773**

* Significant at the .05 level, ** Significant at the .001 level

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Web-Based Promotions Increase Revenue

According to the regression analysis and survey results, web-based promotions represent the most effective marketing strategies for increasing GoodSearch revenue. GoodSearch offers its logo and other

free, user-friendly tools to participating nonprofits to assist with their marketing efforts. Using the

GoodSearch logo significantly predicts GoodSearch revenue; organizations that post the GoodSearch logo

on their website raise nearly $70 more than organizations that do not (p < .001). However, few nonprofits appear to be taking advantage of this tool. As Figure 3 shows, nearly 94 percent of organizations have an

active website, yet less than 13 percent display the GoodSearch logo on their website (p < .001).

Web-based announcements about GoodSearch also contribute to increased revenue. Survey respondents

that reported posting an announcement about GoodSearch on their organization‘s website raised $86 more

than organizations without online posts, for an average amount raised of $117 compared to $31 (p < .01). Advertising GoodSearch in emails and newsletters, however, was not significantly related to GoodSearch

revenue among survey respondents.

These findings suggest that additional promotions using the organization‘s website may increase GoodSearch revenue. Promotions may include adding a GoodSearch custom search box to the agency‘s

website or displaying a progress meter to monitor GoodSearch revenue. Future research should examine

other web-based marketing tools which signficantly increase online fundraising revenue.

Figure 3. Most Nonprofits Have Website, Few Use it to Promote GoodSearch

RECOMMENDATIONS While this study determines that GoodSearch generates minimal revenue for participating organizations,

the regression analysis and survey results identify certain factors and marketing strategies which are

associated with increased revenue. These results provide recommendations for nonprofit managers and fundraising professionals currently using or considering using GoodSearch. Based on the study‘s

findings, fundraisers should recognize the following:

5

GoodSearch revenue is modest, at best, and staff expectations and fundraising budgets should be

managed accordingly;

GoodSearch revenue will grow over time, about $28 each year of additional use, but its long-term

impact is unknown;

GoodSearch is free, requiring negligible direct costs—there is no risk to heed the advice of

organizational leaders who want to try the newest fundraising fad;

Implementing web-based advertising strategies, such as posting the GoodSearch logo and brief

announcements on organizations‘ websites, will increase GoodSearch revenue;

The amount of money raised through GoodSearch depends on both the number of GoodSearch

users and the frequency with which they use GoodSearch to surf the web. Possible strategies for increasing these quanities include:

o Creating an organizational policy requiring staff, board members, and volunteers to use

GoodSearch when performing Internet searches during office hours;

o Encouraging staff, board members, and volunteers to set GoodSearch as their homepage for easier accessibility both in the office and at home.

CONCLUSION

This study addresses a significant gap in the literature examining the effectiveness of online fundraising

strategies. The present findings indicate that GoodSearch yields minimal revenue for participants, raising questions about the passive use of the Internet to fundraise. Additional research on GoodSearch and other

e-philanthropy tools needs to be conducted to further examine the effectiveness of these fundraising tools

and the strategies used to promote them. Whether other online tools raise significant amounts of money for their users remains to be seen.

In challenging economic times, nonprofits face decreasing donations and increasing community needs, causing them to explore low-cost, simple ways to fundraise. A recent article published in The News &

Observer suggested GoodSearch as one of 13 ways nonprofits can receive small donations with the title

―Every little bit helps‖.15 From this perspective, GoodSearch might appeal to nonprofits desperately

seeking new funding, even if the money grows a penny at a time.

6

END NOTES ___________________

1 W. K. Kellogg Foundation, E-Philanthropy, Volunteerism, and Social Changemaking: A New Landscape of

Resources, Issues, and Opportunities (Michigan: W. K. Kellogg Foundation, 2000); W. K. Kellogg Foundation, e-

Philanthropy v2.001: From Entrepreneurial Adventure to an Online Community, (Michigan: W. K. Kellogg

Foundation, 2001).

2 See W. K. Kellogg Foundation (2000) and (2001) for a list of e-philanthropy websites.

3 See www.goodsearch.com. Figure based on two searches per day per user.

4 See W. K. Kellogg Foundation (2001), 9, 12. 5 Helen Flannery, Rob Harris, and Carol Rhine, 2008 DonorCentrics Internet Giving Benchmarking Analysis,

(Charleston, SC: Target Analytics, 2009); Adrian Sargeant. ―Web Based Fund Raising: Is Anyone Making Any Real

Money?,‖ Fund Raising Management (October 2001): 20-23, 42.

6 M + R Strategic Services and Nonprofit Technology Network, 2009 eNonprofit Benchmarks Study: An Analysis of

Online Messaging, Fundraising and Advocacy Metrics for Nonprofit Organizations, (Washington, DC: M + R

Strategic Services and Nonprofit Technology Network, 2009).

7 See page entitled ―Success Stories‖ on www.goodsearch.com.

8 Matthew Milliken. ―Local charities see varying impact from Web site,‖ The Herald-Sun, 3 January 2009.

9 Blackbaud, Inc., 2008 State of the Nonprofit Industry Survey: North American Survey Results, (Charleston, SC:

Blackbaud, Inc., 2009); M + R Strategic Services and Nonprofit Technology Network (2009).

10 Organizations registered with GoodSearch may also receive contributions through GoodShop, an affiliate tool of

the GoodSearch site. Reported findings pertain only to GoodSearch revenue, as including GoodShop revenue did not

significantly alter the analysis.

11 Organizations were selected from the ―Participating Nonprofits‖ page on the GoodSearch site using a random

number generator, beginning with the 391st agency listed and progressing in intervals of 415. According to the

GoodSearch site, eligible organizations must be registered non-profits, including schools, charities, hospitals and clinics, volunteer services, political organizations, fraternal organizations, professional associations, religious

organizations, governmental agencies, and others. Organizations without an email address were excluded from the

sample.

12 This observation is a significant outlier and was removed from the sample for all further analyses. See Appendix

D for the normal curve.

13 Determined with a multiple regression analysis of variance (ANOVA). The regression model explains 30.3

percent of the variability in GoodSearch revenue among organizations in the sample (p < .001). Approximately 70

percent of the variability in GoodSearch revenue remains unexplained through this study. See Appendix E for the

full regression model and results. 14 Excludes formal places of worship, including churches and synagogues.

15

Mary Cornatzer. ―Every little bit helps,‖ The News & Observer, 25 October 2009.

7

BIBLIOGRAPHY

Blackbaud, Inc. 2008 State of the Nonprofit Industry Survey: North American Survey Results. Charleston,

SC: Blackbaud, Inc., 2009.

Blackbaud, Inc. White Paper: E-Philanthropy Strategy for Nonprofits. Charleston, SC: Blackbaud, Inc., 2002.

Cornatzer, Mary. ―Every little bit helps.‖ The News & Observer, 25 October 2009.

Flannery, Helen, Rob Harris, and Carol Rhine. 2008 DonorCentrics Internet Giving Benchmarking

Analysis. Charleston, SC: Target Analytics, 2009.

Hart, Ted, James Greenfield, and Michael Johnston. Nonprofit Internet Strategies: Best Practices for

Marketing, Communications, and Fundraising Success. New Jersey: John Wiley & Sons, Inc, 2005.

Milliken, Matthew. ―Local charities see varying impact from Web site.‖ The Herald-Sun, 3 January 2009.

M + R Strategic Services and Nonprofit Technology Network. 2009 eNonprofit Benchmarks Study: An Analysis of Online Messaging, Fundraising and Advocacy Metrics for Nonprofit Organizations.

Washington, DC: M + R Strategic Services and Nonprofit Technology Network, 2009.

Olsen, Merritt, Mary Liz Keevers, John Paul, and Scott Covington. ―E-relationship development strategy

for the nonprofit fundraising professional.‖ International Journal of Nonprofit and Voluntary Sector

Marketing 6 (2001): 611-613.

Sargeant, Adrian. ―Web Based Fund Raising: Is Anyone Making Any Real Money?‖ Fund Raising

Management (October 2001): 20-23, 42.

W. K. Kellogg Foundation. e-Philanthropy v2.001: From Entrepreneurial Adventure to an Online

Community. Michigan: W. K. Kellogg Foundation, 2001.

W. K. Kellogg Foundation. E-Philanthropy, Volunteerism, and Social Changemaking: A New Landscape of Resources, Issues, and Opportunities. Michigan: W. K. Kellogg Foundation, 2000.

8

APPENDIX A: GoodSearch Homepage & Logos

9

APPENDIX B: Data Gathered in Quantitative Phase

Independent Variable Operational Definition Data Source

Characteristics

Population size Population size of the city in which the nonprofit is located

Census 2000 Data www.census.gov

Internet accessibility Internet usage of the state in which the

nonprofit is located

American Community

Survey 2007 Data www.census.gov

Organizational revenue Total revenue reported on 2008 IRS Form 990

(or most recent available year)

GuideStar

www.guidestar.org Organization age Year organization received tax-exemption GuideStar

www.guidestar.org

Mission Organization‘s primary mission, categorized as:

Animals Arts & Culture

Children & Youth

Community, Volunteerism & Philanthropy Disabled

Disaster Relief

Economic Development Education (2): School, Other

i

Environment

Foundation

Fraternal Organizations & Civic Club Health & Disease

Housing & Homelessness

Human Rights Hunger & Poverty

Legal & Crime

Other

Religion (2): Church, Otherii

Sports & Recreation

Substance Abuse

Women

GoodSearch profile

www.goodsearch.com

Web Presence

Website Organization website, confirmed with a brief

Internet search

GoodSearch profile

Online fundraising Donation button on organization‘s website

(including PayPal, Network for Good and other

external portals)

Organization website

GoodSearch Use GoodSearch logo GoodSearch logo or badge on organization‘s

website, confirmed with a brief website review

Organization website

Years of use Years of GoodSearch use GoodSearch profile GoodShop income Received revenue through GoodShop GoodSearch profile i ―Other‖ includes nonprofits with an educational focus, such as literacy or tutoring programs

ii ―Other‖ includes nonprofits with a religious focus, such as ministries, missionary groups or religious

conference centers

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APPENDIX C: Survey and Results

Closed-Ended Survey Questions Yes / Total %

1. Which of the following marketing strategies does your organization most frequently use to promote

GoodSearch as a way to raise money for your agency? (please mark all that apply)

Announcement on your organization‘s website

Announcement in your organization‘s newsletter Email message to your organization‘s constituents

Press release to local media outlets

None of the above Other (please specify)

18/48

21 19

2

11 8

38%

44 40

4

23 17

2. Does your organization use the GoodSearch logo, such as the example below, in any of your promotions?

Yes

No

17/45 38%

3. Which of the following GoodSearch-sponsored tools is your organization currently using?

GoodSearch button, banner, logo or badge on your website

GoodSearch logo as a ―footer‖ in your organization‘s email signatures GoodSearch custom search box on your organization‘s website

Other (please specify)

11/14

6/14 2/14

0/14

79%

43 14

0

4. Does your organization use a form of social media, such as blogging or Facebook, to promote your mission?

Yes

No

30/45 67%

5. Which of the following social media tools does your organization currently use? Facebook

MySpace

Twitter LinkedIn

Blogs

Other (please specify)

27/30

8/30

14/30 8/30

9/30

3/30

90%

27

47 27

30

10 6. On average, how often does your organization actively promote the use of GoodSearch as a way to

fundraise for your mission?

Daily

Once a week Two to three times a month

Once a month

Once every three months At least once a year

Very rarely

Other (please specify)

3/44

1/44 1/44

6/44

7/44 10/44

13/44

3/44

7%

2 2

14

16 23

30

7

7. How many staff members are primarily responsible for your organization‘s fundraising? Less than one

One

Two Three

Four or more

Other (please specify)

5/42

14/42

11/42 5/42

4/42

3/42

12%

33

26 12

10

7

11

Closed-Ended Survey Questions, continued Yes / Total %

8. Please provide the total number of full-time, paid employees who work for your organization.

Responses categorized for reporting. 0

1 to 10

11 to 20

21 to 40 41 to 60

100+

10/43

20/43

5/43

5/43 2/43

1/43

23%

47

12

12 4

2

9. Has your organization ever been featured on the GoodSearch homepage as the ―Charity of the Day‖? Yes

No

I don‘t know

1/43

22/43

20/43

2%

51

47

10. Does your organization promote the use of GoodShop as another way to fundraise for your mission?

Yes

No

I don‘t know

18/41

21/41

2/41

44%

51

5

Questions removed from analysis due to validity concerns and response errors include:

How long has your organization been using GoodSearch?

Please rank the primary revenue sources for your organization from 1 to 10, with 1 being the

largest revenue source and 10 being the smallest revenue source.

12

Marketing Strategies Provided in Open-Ended Survey Questions

1. Which of the following marketing strategies does your organization most frequently use to promote

GoodSearch as a way to raise money for your agency? “Other” responses. Handouts in campaign supplies

Link on MySpace, Facebook, Twitter or social media

Link in email signature

Posted in store and food pantry

Word of mouth by staff, board, and volunteers

2. Please share any additional ways your organization promotes GoodSearch.

We include the GoodSearch information with our campaign supplies and encourage campaign

coordinators to share it with employees. We've also distributed the info to schools and partner

agencies.

I have a link on my web page. My Space and Facebook are other ways I use GoodSearch for

donations. I don't ask much but the option to donate is prominently displayed.

We have asked all of our staff and board members to use Good Search. We are hoping to add it to

our website soon. It is in every newsletter. We promote it at our events.

I remind people when Internet searching comes up in a conversation; I wrote to all the people in

our address book about it.

GoodSearch poster is placed on our walls in our thrift store as well as in our food pantry. Our staff

is trained to mention GoodSearch when asked questions.

We promote it primarily with our staff members and board but you have given me some

additional ideas that we will try to now incorporate (listing on our new website, etc.)

We announced last year that any funds raised through GoodSearch would be directed to medical

research: "GoodSearch for Research‖.

13

APPENDIX D: Normal Distribution of GoodSearch Revenue for Entire Sample

i

The circled data point is an outlier removed from further statistical analyses.

i

14

APPENDIX E: Regression Analysis of Variables Impacting GoodSearch Revenue

R Square Adjusted R Square F

.356 .303 6.773

Independent Variable Unstandardized

Coefficient t Significance

Constant 319.37 .588 .557

City Population 2.253E-6 .525 .600 Internet Usage by State -1.17E-6 -2.639 .009**

Organization Age -.185 -.677 .499

Organization Mission Animals 7.490 .019 .700

Arts & Culture -11.955 -.660 .510

Children & Youth 4.480 .287 .774 Community, Philanthropy, Volunteerism -19.464 -.884 .377

Disabled -19.465 -.765 .445

Disaster Relief -1.601 -.028 .978

Economic Development -18.234 -.383 .702 Education: Other -43.928 -1.951 .052

Environment -41.850 -1.118 .264

Fraternal Organization or Civic Club 46.942 .809 .419 Health & Disease -3.381 -.200 .841

Housing & Homelessness -20.751 -.748 .455

Human Rights 4.408 .117 .907 Hunger & Poverty -3.481 -.108 .914

Legal & Crime 15.418 .641 .522

Other -30.945 -.538 .591

Religion: Other 87.09 4.137 .000*** Sports & Recreation 66.41 2.186 .029*

Women -18.091 -.523 .601

Organization Has Active Website 2.372 .136 .892 Organization Has ―Donate Now‖ Button on Website 14.742 1.538 .125

Organization Has GoodSearch Logo on Website 69.29 5.401 .000***

Years of GoodSearch Use 28.016 6.427 .000***

GoodShop Revenue .763 7.347 .000***

* Significant at the .05 level

** Significant at the .01 level

*** Significant at the .001 level

Interpretation

This table provides the results of the multivariate regression analysis of variance (ANOVA), which examines the influence of several independent variables on GoodSearch revenue. The unstandardized

coefficients represent the amount of GoodSearch revenue organizations earned per unit increase in each

independent variable. For example, for each additional year of GoodSearch use, organizations earn

approximately $28 more.

15

APPENDIX F: Acknowledgments

I would like to thank my committee members, Maureen Berner (chair), Margaret Henderson, and Greg

Allison, for their guidance, expertise, and feedback throughout the capstone process. I also would like to

thank my fiancé, Byers Bowen, for his constant support and encouragement as I conducted my research.