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Get a Deal and Give Back: Group Buying Sites With a Charitable Twist

Getting a deal is great. Getting one that gives back to charity is even better – especially at this time of year when many of us tend to open our hearts and wallets a little bit wider to share the holiday spirit with our loved ones and favorite charities. 

By now, you are probably familiar with Groupon, LivingSocial, and the myriad of other websites that run daily deals on deeply discounted products and services. Now, a new crop of daily deal websites are emerging with a twist: rather than simply take a cut of all sales, they give part of it to charities. They not only get to feel good, they say, but are also attracting a better kind of customer to their merchants.

Take Washington, D.C.-based Deals For Deeds. Co-founder Josh Hoffman says daily deal websites aren’t attracting high-end brands because they don’t want to be associated with deep discounts. And the kinds of customers frequenting the traditional daily deal websites aren’t likely to turn into repeat business for the local merchants, since many of them are simply after the biggest deal they can get.

By donating some of the proceeds to a charity, however, “we are able to reach a high-value demographic of socially conscious consumers,” says Hoffman. “Cause marketing, if structured effectively, increases retention and brand perceptions.“

Just like most other daily deal websites, Deals For Deeds largely attracts well educated, affluent women. But their customer base is active and engaged in the community, and on average volunteers at least six hours per month of their time, he says.

So how does the charitable twist work? At Deals for Deeds, non-profits come up with a fundraising goal and users get to vote on which non-profit cause they would like to see featured on the website. Deals For Deeds then dedicates a week’s worth of deals toward the fundraising goal, which Hoffman says enables members to know exactly how the money is being used.  The goal for the week of December 19, for example, is give 175 students the chance to be in a science fair, through The Child and Family Network Centers.

Deals For Deeds gives a minimum of 5% of every purchase to the charity and in some cases may pony up 100% of the proceeds. For instance, when the website featured a non-profit’s holiday pie sales drive for the homeless, Deals For Deeds gave 100% of the proceeds from the sale to the charity, says Hoffman.

Another such website, Naples, Fla.-based MyEZDeal, works with more than thirty non-profits and schools to give 5% to 10% of each purchase back. Most organizations are schools in the Portland, Oregon and Nashville, Tenn. areas. Once a quarter, 100% of a day’s deal is donated. Currently, MyEZDeal is offering discounts only in the cities mentioned above, but plans to expand rapidly in 2011.

Ron Sapp, the company’s chief executive officer, says that by partnering with local charities MyEZDeal is able to give local merchant access to customers that are more apt to turn into repeat business because they are part of the community.

While schools are the main focus of the charitable giving, with hospitals coming next, Sapp says MyEZDeal will work with merchants to choose charities they care about. “We’ve heard from the business owners that they like the customers they are getting,” says Sapp. “They are feeling pretty positive because there’s a lot more at stake and a lot more passion.”

Yet another website, Eversave of Wakefield, Mass., doesn’t donate a portion of proceeds to a charity every day but will aim to do it with 10% to 20% of the “Saves” the company runs. Jere Doyle, the company’s chief executive officer, says they chooses local charities that are close to home and that people can identify with, including public schools. “It really resonates with our audience,” he says. Eversave donates 5% to 10% of the proceeds from the deals linked to a charity and in some cases lets the merchants choose which charity will receive the proceeds.

One recent deal was a $50 voucher for children’s clothing store ScoutCollection.com for $25. Eversave pledged to donate 5% of the proceeds to Toys for Tots.

Even traditional daily deal websites are getting into the charitable giving game, at least during the holiday season. Through December 24, LivingSocial is running its second annual “12 Days of Giving… Back” program. Customers who purchase these deals will see 1% of the proceeds donated to DonorsChoose.org and GlobalGiving. The program is available in more than 130 markets and in five countries.