14.0071 E-Commerce and Nonprofits project

From: Humanist Discussion Group (willard@lists.village.virginia.edu)
Date: Thu Jun 22 2000 - 06:59:14 CUT

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                    Humanist Discussion Group, Vol. 14, No. 71.
           Centre for Computing in the Humanities, King's College London

             Date: Thu, 22 Jun 2000 07:55:50 +0100
             From: NINCH-ANNOUNCE <david@ninch.org>
             Subject: E-Commerce & Nonprofits: a new Benton Foundation project

    News on Networking Cultural Heritage Resources
    from across the Community
    June 20, 2000

                E-Commerce & Nonprofits: a new Benton Foundation project

    In its latest issue of DIGITAL BEAT, the Benton Foundation not only draws
    attention to the rising issue of the relationship between e-commerce and
    non-profits but also announces its own project to offer practical guidance,
    as well as to raise some of the critical policy issues involved, as
    non-profits consider e-commerce ventures. Future issues of the Benton's
    DIGITAL BEAT will focus on such issues and advice. See the foot of this
    piece for subscription information.

    This announcement comes in the wake of announcements from for-profits, such
    as Questia <<http://www.questia.com/>http://www.questia.com/>, engaging in
    the provision of services heretofore offered mostly by nonprofits, as well
    as from consortia of nonprofits, such as Fathom.com
    <<http://www.fathom.com/>http://www.fathom.com/>, offering for-profit

    David Green


    >Date: Tue, 20 Jun 2000 08:10:54 -0500
    >Reply-To: lists@BENTON.ORG
    >From: Kevin Taglang <kevint@BENTON.ORG>

    Digital Beat Extra -- 6/20/2000

    Nonprofits and Electronic Commerce
    by Katharina Kopp

    Electronic commerce (e-commerce) has been around now for a while; great
    expectations of huge financial gains and economic growth are associated with
    it. Brick and mortar companies rush to set up their .com enterprises and new
    business ventures are announced every day. Do we know, however, what
    e-commerce means for nonprofits? E-commerce and nonprofit work is not
    necessarily a contradiction in terms. As electronic commerce becomes a
    larger part of the U.S. and world economy, it seems critical that nonprofit
    organizations become knowledgeable participants in it. E-commerce is likely
    to develop into an important vehicle that allows nonprofits to become more
    self-sustainable and more effective in advancing their objectives.
    Furthermore, in order to shape the market in their best interests, nonprofit
    organizations must become knowledgeable about and advocate for the key
    policy issues that will best serve them. New policy frameworks are being
    implemented, and the nonprofit community can no longer afford to sit on the

    For various reasons, some nonprofit organizations are beginning to consider
    the risks and opportunities of e-commerce. For those nonprofits who do,
    this typically means selling products like books, reports or other
    merchandise online, or it involves online fundraising. In more general
    terms, however, e-commerce for nonprofits could refer to the creation of
    value from the knowledge and expertise that nonprofits generate, in exchange
    for money or other values, such as increased visibility. In addition to
    providing their general audience with information and services, nonprofits
    could also offer special services, such as reports or analyses, for member
    organizations only, in exchange for reasonable rates. Beyond being producers
    of value nonprofits are also consumers. They purchase products online and
    could, for example, benefit from discounts facilitated through co-ops.

    Nonprofit organizations involved in e-commerce therefore have to grapple
    with a range of issues such as: what products and services can be marketed,
    how should they be appropriately marketed, what legislation and regulations
    apply, how to set up partnerships with for-profit organizations, and how to
    establish a for-profit spin-off. They also have to address policy questions
    and articulate their interests, from privacy, to copyright, to consumer
    rights. Finally, and perhaps most importantly, guidance is needed to
    explore ethical issues and the value standards that should apply to
    nonprofits in general and their organization in particular, including issues
    such as appropriate marketing and privacy protections and where to draw the
    line when profit-maximizing goals are in conflict with the larger mission of
    the nonprofit enterprise.

    Why Is E-Commerce Different?

    Commerce has been around forever and nonprofits have not previously gotten
    involved in it on a large scale. Why, then, is e-commerce any different,
    some might ask? The Internet puts high value on content, knowledge and
    expertise, and it values neutral brokers of information, something many
    nonprofits are particularly well-positioned to take advantage of. Also,
    transaction costs appear low and certain audiences are now easier to reach.
    E-commerce for nonprofits seems to be a particularly attractive proposition,
    because the general climate that nonprofits are operating in is changing.
    Gregory Dees, in his article "Enterprising Nonprofits" (Harvard Business
    Review, Jan.-Feb. '98), describes five major pressures and influences that
    are pushing nonprofits into entrepreneurial models or commercialization.
    These include:

    - a general pro business zeitgeist,
    - the need to decrease dependency on and organization's constituency to
    deliver social goods and services,
    - financial sustainability and the need to create more reliable funding
    sources than donations and grants,
    - a drive by foundations to make grantees more self-sufficient, and
    - competitive forces from for-profits leading nonprofits to consider
    commercial alternatives to traditional sources of funding.

    Dees argues that improving mission-related performance must remain paramount
    and that the most important measure of success is the achievement of
    mission-related objectives, not the financial wealth and stability of the

    A New Benton Project

    This brief overview of some of the critical issues for nonprofits in
    electronic commerce marks the beginning of the Benton Foundation's
    involvement in this area. Benton is interested in providing nonprofits with
    practical guidance in helping evaluate the opportunities and risks of
    e-commerce in a thoughtful way. Moreover, Benton wants to help raise some
    of the critical policy issues on the agenda of the nonprofit community. In
    future Digital Beats, we will cover various aspects of e-commerce. Articles
    will particularly focus on privacy, copyright and fair use, consumer rights
    and Internet governance, as well as practical advice on e-commerce
    implementation and the various e-commerce business models that in some form
    or another could be applicable to the nonprofit sector.

    Nonprofits should care about the practical aspects of e-commerce and the
    associated policy issues, not because everybody else is talking about it,
    but because e-commerce may provide an important vehicle with which to become
    economically more independent and self-sustainable. Some of the more
    lucrative possibilities for nonprofit e-commerce ventures are already being
    taken up by for-profit enterprises. Nonprofits should consider now whether
    to become more assertive and creative in taking advantage of those
    e-commerce opportunities and make e-commerce also work for philanthropic

    In order to develop a credible and effective voice in policy making, the
    nonprofit community must set the highest standards when implementing their
    own e-commerce practices. Being creative with e-commerce practices can
    demonstrate to other nonprofits and corporate enterprises what models and
    standards to adopt. In the policy making environment, setting the benchmark
    for e-commerce conduct high will put pressure on the private sector to do
    the same, as nonprofits demonstrate what can be done.

    The expectations for the potential of e-commerce and its impact on our
    economy and our lives are high and perhaps exaggerated. The extent of its
    impact remains to be seen. However, it is likely that the changes, good and
    bad, will be considerable, particularly with the increasing conversion of
    electronic media into one platform. The nonprofit community can no longer
    afford to sit on the sidelines and let the opportunities of e-commerce pass
    them by. Nor can they remain passive in shaping the policy framework in
    this emerging market. Too much is at stake and time is running out. For
    nonprofits to become self-sustainable and for them to remain valuable
    contributors to our civic lives, they must change with the times and adopt
    new models of operation. E-commerce is likely to provide some of those new
    models. The Benton Foundation will try to provide some of the necessary
    exploration, knowledge, and guidance in conducting e-commerce and provide,
    in cooperation with other advocates and nonprofit leaders, the guidance in
    organizing an effective voice in e-commerce policy making.


    (c)Benton Foundation 2000. Redistribution of this email publication -- both
    internally and externally -- is encouraged if it includes this message.

    This service is available online at (www.benton.org/News/Extra).

    Benton's Communications Policy Program seeks to promote equity, access and a
    diversity of voices. CPP researches and reports on communications
    technologies and practices, legislative and regulatory debates and industry
    trends. It urges the nonprofit, government and corporate sectors to
    acknowledge their shared public responsibility and to apply their unique
    strengths in creating a communications environment that meets educational,
    civic and social needs. CPP works primarily in four issue areas:

    Digital Divide: CPP manages the Digital Divide Network, an online resource
    connecting communities with the tools they need to address the inequalities
    in access to and use of communications networks.

    E-commerce: Benton Foundation is helping the non-profit community identify
    the opportunities and risks of engaging in e-commerce. The focus is on: 1)
    creating value in the e-marketplace from the vast knowledge and networks of
    the non-profit community and 2) organizing an effective voice for the
    non-profit community in e-commerce policy making both nationally and

    Education Technology: With billions of dollars being invested by all levels
    of government in education technology, the policy program is committed to
    making sure the resources devoted to introducing new technologies in schools
    and libraries are used to their greatest potential.

    Public Media: CPP strives to identify and promote the policies, practices
    and principles that will contribute to vital and inclusive public media in
    the digital age.


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