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=3E=3E=3E NINCH-ANNOUNCE =3Cdavid=40ninch.org=3E 06/20/00 10:52AM =3E=3E=3E
NINCH ANNOUNCEMENT
News on Networking Cultural Heritage Resources
from across the Community
June 20, 2000
E-Commerce =26 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 =3Chttp://www.questia.com/=3E, engaging in
the provision of services heretofore offered mostly by nonprofits, as
well as from consortia of nonprofits, such as Fathom.com
=3Chttp://www.fathom.com/=3E, offering for-profit services.
David Green
Date: Tue, 20 Jun 2000 08:10:54 -0500
Reply-To: lists=40BENTON.ORG
Sender: The Benton Communications Policy Mailing List
=3CBENTON-COMPOLICY=40CDINET.COM=3E
From: Kevin Taglang =3Ckevint=40BENTON.ORG=3E
Subject:Digital Beat Extra: Nonprofits and Electronic Commerce
Digital Beat Extra -- 6/20/2000
Nonprofits and Electronic Commerce
by Katharina Kopp
Electronic commerce (e-commerce) has been around now for a while=3B 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
sidelines.
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 =22Enterprising Nonprofits=22 (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
organization.
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 =
goals.
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
internationally.
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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