The United Nations' World Food Programme has ended its relationship with online charity shopping mall GreaterGood.com, because the site has failed to make timely payment of funds collected on GreaterGood's TheHungerSite.com.
“WFP decided it could no longer permit GreaterGood.com … or TheHungerSite.com to use its name for fundraising or promotional purposes,” said WFP in a statement released late last month, before money owed by GreaterGood was paid. “WFP believes that the individuals who clicked on the site and the sponsors who have paid for those clicks from the site's inception to the present time intended that their donations should be used by WFP to provide food to the hungry,” the statement said.
Under GreaterGood's agreement with WFP, visitors to TheHungerSite could access a click-to-donate button and view a sponsor's ad, and a portion of the ad revenue would go to WFP. But with the online ad market softening, sponsor payments to GreaterGood have slowed.
“Our advertisers were beginning to take a little bit longer to pay,” said Lynn Ridenour, executive vice president at GreaterGood, Seattle. “A lot of those companies were dot-coms. And money was getting a little tighter.” GreaterGood is now diversifying and looking for more bricks-and-mortar advertisers, Ridenour said.
And though $171,000 due the WFP on Nov. 15 was paid on Dec. 6, GreaterGood will have no problem paying the two new beneficiaries that it acquired on Nov. 6, Mercy Corps and America's Second Harvest, Ridenour said.
“The model is sound,” she said. “[Online donation] takes the right amount of time. People can do it every day and feel good about it. Advertisers will always want to get their message in front of a qualified demographic,” said Ridenour.
Abigail Spring, spokeswoman for the WFP, confirmed that the money had been paid, but indicated that WFP had lost faith in the process in the months since GreaterGood bought TheHungerSite from founder John Breen in February.
“When TheHungerSite was founded, the money went directly from the sponsors to the World Food Programme,” said Spring. “When TheHungerSite was sold to GreaterGood.com, we continued with the same agreement. After some time GreaterGood.com suggested, and the World Food Programme agreed, that they would be an intermediary because they had more resources and staff in order to collect the money from the sponsors. It [then] became clear that GreaterGood.com was having some financial troubles, and the money started coming in slowly even after the sponsors had paid.”
There will be no renegotiations, Spring said, because WFP fears that donors would question the integrity of the program when they found out that money had to go through a “bureaucracy” before it got to the beneficiaries. According to Ridenour, there never was a written contract between WFP and GreaterGood.
At least one of GreaterGood's new beneficiaries, Mercy Corps, is unconcerned about the integrity of the partnership or GreaterGood's financial standing.
“They've explained to us what happened, and what World Food Programme says happened is pretty much the same,” said Matthew De Galen, chief development officer at Mercy Corps.
“We're very excited about the partnership,” Ridenour said.