News & Views

To give or not to give? Online, that is!

A click-of-the-mouse convenience ... or a risk to be avoided?

Although approximately one-third of all charitable donations will be made online (Chronicle of Philanthropy) by 2010, many nonprofit agencies have not yet embraced the power of their websites for e-philanthropy, citing a number of excuses but mostly fearing that credit card information will end up in the hands of cyber-bandits.

At EHL Consulting, we strongly encourage nonprofits to use the Internet creatively. The Internet is a cost-effective way to cultivate donors, especially small donors.

A recently released report shows that, despite concerns about identity theft and online fraud, the Internet is more protected from identity thieves than the offline world.

According to the 2005 Identity Fraud Survey Report released by the Better Business Bureau and Javelin Strategy & Research, Internet-related fraud problems are actually less severe, less costly and not as widespread as some have projected. Most instances of identity theft are paper-based, not Internet-based.

• The majority of reported cases of identity fraud come from a lost or stolen wallet or checkbook. Computer crimes accounted for just 11.6% of all known-cause identity fraud in 2004 as compared with 68% from paper sources. Would-be thieves retrieve charge slips in wastebaskets, copy numbers found on faxed-in credit orders, eavesdrop by public phones for credit card transactions ... the list goes on.
• Contrary to suspicions that the crime is committed anonymously through computers, most identity theft occurs at the hands of friends, relatives and others whom the victim knows.
• The cost to the victim, in dollar terms? The average loss for online identity theft in 2004 was $551, vs. $4,543 from paper theft.
• A wide variety of metrics confirms that identity fraud problems are not getting worse; rather, the total number of victims is in decline.
• The majority of identity fraud crimes are self-detected. This reinforces the benefits of activity-monitoring through electronic review of transactions, statements and credit reports allowing consumers to check their account activities quickly and efficiently -- without waiting for a paper bill or statement.

The threat of security breaches on the Internet is real and agencies need to secure their websites for back-and-forth communication as well as online contributions. But the Internet threat is minimal compared with security breaches occurring much more frequently in other places.

Online giving continues to accelerate, and not just with the largest nonprofits. The resources exist for small and mid-sized agencies and we encourage you to consider how to make your website interactive. Consider, too, that direct mailings are much more expensive than email appeals, take more time for responses, and generally result in smaller gifts.

For more information on the 2005 Identity Fraud Survey Report, go to:
http://www.bbb.org/alerts/article.asp?ID=565

Further information on online giving may be found at:
www.aafrc.org
www.nsfre.org