Online Giving Site to Close

The impending demise of Charitableway, a provider of online solutions for workplace giving campaigns, has raised new questions about the near-term viability of online donation sites.

Headed by former Microsoft executive Pete Mountanos and backed by $43 million in venture capital, Charitableway opened shop nearly two years ago with the dream of revolutionizing nonprofit fundraising. But the company struggled to find a niche, first presenting itself as online giving portal, then transforming itself into a provider of online fundraising services to companies and nonprofit federations. Along the way, Mountanos discovered that nonprofit organizations were often reluctant to get involved with a for-profit company.

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"I just thought the idea was to do it faster, cheaper, better," Mountanos told the San Jose Mercury News. "But the response was, 'We are worried.' You work in an environment in the nonprofit world where you are presumed guilty."

Others attribute the failure of Charitableway at least partly to a lack of knowledge about the sector. "They went into the business without understanding the nature of nonprofits they were allegedly attempting to benefit," said Allan Parachini, a Los Angeles consultant who works with nonprofit organizations and foundations. "From the beginning, anyone following this would say there is going to be a huge disintegration." The recent demise of such for-profit sites as Shop2Give, iBelong, PledgeBay, iReachOut, ClickforaCause, and onGiving would seem to confirm that view.

Mountanous, for one, remains undaunted. "I'm very bullish on online workplace giving," he told the News."But if you are too early, sometimes you are just going to burn a lot of money. And that's not good for anybody."

John Boudreau. "Online Giving Suffers Setback With Charity Conduit's Demise" San Jose Mercury News 03/08/2001.