Click on the question below to be taken to its answer farther down the page.
Q. How does my organization participate with the GiveByShopping.com Online Shopping Network?
Q. Why do all of the GiveByShopping.com Online Shopping Portals look the same?
Q. Is there a minimum purchase requirement in order for our organization to receive a contribution?
Q. How often will we receive contributions? Will we receive a check or electronic deposit?
Q. What should we tell our members and supporters about our GiveByShopping.com Online Shopping Portal?
Q. Can I ask a question not listed here?
Answers
Q. How does my organization participate with the GiveByShopping.com Online Shopping Portals?
A. Just visit our Enrollment page and fill-in the requested information.
A. That's a good question and one we asked ourselves, too, before creating GiveByShopping.com. The answer, courtesy of the Internal Revenue Service, is "Unrelated Business Income (UBI)."
"Even though an organization is tax exempt, it still may be liable for tax on its unrelated business income. Unrelated business income is income from a trade or business, regularly carried on, that is not substantially related to the performance by the organization of its exempt purpose or function except that the organization needs the profits derived from this activity." IRS Website
In the case of a non-profit organization being paid by Merchants for advertising their websites on its website, any revenue derived from commissions paid by those Merchants to the non-profit would be taxable as UBI.
Now, if you want to hire someone to seek out and enter into contracts with all of the Merchants represented on GiveByShopping.com, design and host your own Portal, track the sales and commissions owed to your organization by each Merchant, calculate the taxes owed on those commissions, and write a check to the IRS every quarter, you have every right to do so.
Or, you could just enroll your organization with GiveByShopping.com and avoid all of those hassles, legally and painlessly. Our attorneys have advised us that when you place a link to your organization’s GiveByShopping.com Online Shopping Portal on your website you are not advertising or being paid for advertising. You are announcing to your supporters that GiveByShopping.com has promised to donate a portion of its profits to your organization. This is, according to the IRS, not advertising, but a “sponsorship announcement,” like those broadcast on non-commercial radio stations.
"Soliciting and receiving qualified sponsorship payments is not an unrelated trade or business, and the payments are not subject to unrelated business income tax ... For example, if, in return for receiving a sponsorship payment, an organization promises to use the sponsor's name or logo in acknowledging the sponsor's support for an educational or fundraising event, the payment is a qualified sponsorship payment and is not subject to the unrelated business income tax ... In addition, mere distribution or display of a sponsor's product by the organization to the public at a sponsored event, whether for free or for remuneration, is considered use or acknowledgment of the product rather than advertising. (Editor's note: We are considering visits to your organization's website by your supporters as "events" for the purpose of interpreting this regulation.)" IRS Publication 598
The "trade or business" does not begin until your supporters click a Merchant link on the GiveByShopping.com Online Shopping Portal, which is hosted on the GiveByShopping.com server. GiveByShopping.com, not your non-profit organization, is advertising the Merchants, and GiveByShopping.com, not your non-profit organization, is receiving a commission on the sales that result from that advertising. The money your organization receives is a "sponsorship payment" from GiveByShopping.com, not, in the opinion of our attorneys, Unrelated Business Income. You should, of course, consult your organization's own tax professional as you, not GiveByShopping.com would be liable for any taxes due in the event of an unfavorable determination by the IRS. Should your advisors tell you that our donations are Unrelated Business Income, however, please let us know so that we can consult with them and determine the best course of action to resolve the difference of interpretation. We are willing to go to court, if necessary, to protect our right to donate our income to your organization as we see fit, without interference from the government, especially if your organization is a religious institution protected by the First Amendment to the U.S. Constitution.
Q. Why do all of the GiveByShopping.com Online Shopping Portals look the same?
A. The GiveByShopping.com Online Shopping Portals all look the same to protect the non-profit organizations we donate to from any accusation that they are advertising Merchants and receiving commissions. We don't want you to get in trouble with the IRS, so we make it clear that GiveByShopping.com, not your non-profit organization, is advertising the Merchants.
Q. How do I know that I'm shopping on my preferred organization's Portal?
A. You know that you're shopping through your preferred organization's Portal in two ways: First, the name, city and state of the non-profit organization that will receive a donation from purchases made through an individual Portal is listed at the top of that Portal in large, green letters. The Portal will also always include email and postal mail addresses to contact the organization directly. Second, we use a highly specialized, super secret, extra unique coding system in the URL (Internet address) of each online Portal. Look at the URL for your organization's Portal, usually located next to the word "address" near the top of your browser. It will read "http://www.GiveByShopping.com/portals/nnnnn-nnnn.shtml" where the n's are replaced by a nine-digit number. That nine-digit number, with the dash in the middle, is the Zip+4 Zip Code for the mailing address of the non-profit organization connected to that Portal. Pretty sneaky, huh? That same number should appear somewhere in the URL's of every Merchant link displayed on that Portal. That's how we track the purchases made through Portals and make our contribution decisions. When you click on a link, the Merchant's website places a "cookie" (text file) in a temporary folder on your computer to track only which organization's Portal referred you to their site. They do not provide us with information about which items you purchased or even what you viewed. Also, we never have access to your credit card information.
A. You'll just have to trust us on that, at least initially. You can be certain, however, that if GiveByShopping.com was defrauding non-profit organizations over the Internet (a mechanism of interstate commerce subject to federal jurisdiction), that the Justice Department would shut us down in a heartbeat. GiveByShopping.com is the creation of Jeff Johnson, a former full-time law enforcement officer, who now works as a journalist with the American Family News Network, a Christian news service. You may remember Jeff's name from his five years with the Media Research Center’s Cybercast News Service, from his time as the Washington bureau chief for Focus on the Family's Family News In Focus radio newsmagazine, or as news director of the Washington, D.C. radio stations owned by Salem Communications, the world's largest Christian broadcaster. You may have even seen Jeff on Fox News Channel discussing his investigative reporting. You can find out more about GiveByShopping.com and Jeff Johnson by clicking here.
A. Unfortunately, the answer to that question is: “It depends.” Each Merchant chooses how much commission it will pay. Some Merchants pay varying levels of commissions on different products or services. Some Merchants only pay commissions on products but not on services such as installation or recurring monthly fee services. We are forbidden by the contracts with our Merchants from disclosing the amount of commission they pay us, but we base our contribution levels on the commissions we are paid, taking into account our operating costs such as accounting, web hosting, legal services, etc.
The minimum percentage of each "qualified purchase" that we will contribute to our Participants is listed on our Merchant List. "Qualified purchases" are defined differently by each Merchant, but the rules usually include all purchases that are completed, not returned, and for which final payment is delivered to the Merchant by the purchaser's credit card company.
Our goal is to donate 90 percent of the commissions we receive from the Online Shopping Portals of churches and non-commercial Christian radio stations back to them (a "reverse tithe"), and 75 percent of the commissions we receive from the Online Shopping Portals of other 501(c)3 non-profit organizations back to them.
Q. Is there a minimum purchase requirement in order for our organization to receive a contribution?
A. No. Imposing such a minimum would, according to our attorneys, constitute a "contingency" subject to Unrelated Business Income taxes under IRS regulations. Each non-profit organization we sponsor a GiveByShopping.com Online Shopping Portal for will receive a percentage of the "net profits" from all "qualified purchases" made through that Portal. We define "net profits" as all commissions paid by our Merchants minus operating costs, fees, taxes, licenses and any other financial obligation incurred in the course of creating and providing this service. "Qualified purchases" are defined differently by each Merchant, but the rules usually include all purchases that are completed, not returned, and for which final payment is delivered to the Merchant by the purchaser's credit card company. Please note: Many participating Merchants do have a minimum aggregate purchase requirement before they will pay commissions to GiveByShopping.com. No sponsorship donations will be made to our Partners until such time as commission payments have been received from participating Merchants.
Q. How often will we receive contributions? Will we receive a check or electronic deposit?
A. GiveByShopping.com mails checks to our Participants at the end of every calendar quarter. There is, however, a variable period during which purchases may be returned set by each Merchant. GiveByShopping.com receives no commissions until the expiration of each Merchant's refund period and no contributions will be made until commissions are received.
All payments are sent via check.
A. Getting your supporters to use your GiveByShopping.com Online Shopping Portal counts on your use of an advertising principle called “targeted reach with frequency.” In radio, the principle of “targeting” explains why you’re more likely to hear ads for motorcycles on rock and country stations than on classical and adult contemporary stations. The advertiser is “targeting” the listeners most likely to buy their motorcycles.
Placing links to your GiveByShopping.com Online Shopping Portal on your website where your supporters and visitors can easily notice them is “targeting” that portion of your membership or support base most likely to shop online. After all, they already use your website. We recommend that you locate links to your GiveByShopping.com Online Shopping Portal on the front page of your website, “above the scroll,” (so that they are visible when the page loads, without having to scroll down) and on any contributions or donations page you host. Some organizations consider it effective to locate links to their GiveByShopping.com Online Shopping Portal in the same position on every page of their website so that they are easy to locate and seen often.
To best “reach” your supporters, include references to your GiveByShopping.com partnership in all of your external communications. Email messages, “snail mail” newsletters, and announcements during in-person meetings are all effective means of “reaching” your target audience with reminders that when they shop through your GiveByShopping.com Online Shopping Portal, the organization they support benefits. Almost any method that you normally use to communicate with your members will work, including direct mail, telephone calls, and email promotions. Please note, however, that unsolicited email promotions to individuals who have not specifically requested to be added to your email list for such messages are strictly forbidden and will result in termination of your participation and the banning of your IP address by GiveByShopping.com’s web host.
The “frequency” with which you promote your GiveByShopping.com Online Shopping Portal is at your discretion. Just know that the more often your see or hear a message, the more likely you are to remember it. Think about the songs that were played on the radio when you were a teenager. You probably hated the fact that the most popular station played the same songs over and over again. But if you heard one of those songs now, you would instantly remember the words. That is the power of “targeted reach with frequency.”
Remember: Under IRS regulations, we can only require you to "acknowledge" our sponsorship by placing a link to your GiveByShopping.com Online Shopping Portal on your website. We cannot legally require you to provide any goods or services (such as advertising your GiveByShopping.com in your magazine or newsletter) in exchange for your participation. However, the success of the GiveByShopping.com Online Fundraising Network is dependant on your supporters visiting your Online Shopping Portal so plan any additional voluntary acknowledgements you choose to undertake accordingly.
A. The basic message is always the same: "GiveByShopping.com will donate part of the proceeds from every purchase you make through our Online Shopping Portal back to us."
The Featured Merchant banner on your Portal is specifically chosen for each type of organization to be the most appealing to your supporters. GiveByShopping.com will frequently update the “Featured Merchant” banner with either a new Merchant or a new offer from the existing Merchant. This could happen as often as weekly. Because these offers change without notice, it’s best that you not announce them in any printed/text materials. A great way to promote these offers, however, is to mention them in a face-to-face meeting or live broadcast. “Monday, I was looking at our Portal and noticed that Merchant A was offering deal B. Before that, Merchant C was offering discount D. And there are new offers like that all the time.”
GiveByShopping.com also features a "Deal of the Week" in the left column of each Portal. This promotion is also designed to attract return traffic to your portal and should be promoted to your supporters accordingly.
A. We sincerely don't believe so. Your organization is not selling anything. You are also not advertising anything. All you are doing is informing your supporters about GiveByShopping.com's sponsorship of your organization. All we are doing is asking them to complete the online purchases they are already making through your GiveByShopping.com Online Shopping Portal.
A. Again, we sincerely don't believe so. In Matthew 21:12, Mark 11:15, and John 2:15, the Bible relates Jesus's reason for driving the money changers out of the temple: "'It is written,' he said to them, 'My house will be called a house of prayer,' but you are making it a 'den of robbers.'" Jesus' was justifiably angry for two reasons: First, the money changers were misusing God's House to make money for themselves. GiveByShopping.com, on the other hand, is trying to build up God's House, and other non-profit organizations, by helping them get the money they need to serve the public. The second reason for Jesus' anger was that the money changers were cheating their customers. That's why he called them "robbers." GiveByShopping.com is doing everything we can to support Christian ministries and other non-profit organizations, not to steal from them or their supporters. Finally, as we mentioned above, when your organization partners with GiveByShopping.com, you are not selling anything. You're simply asking your supporters to add the extra step of clicking through your GiveByShopping.com Online Shopping Portal when they make their online purchases. You're not even asking them to spend more money, just to add an extra step to their online shopping routine that will also add more money to the coffers of your organization. GiveByShopping.com is owned and operated by Christians who sincerely believe Jesus would approve of what we are doing ... or we wouldn't be doing it!
Q. Can I ask a question not listed here?
A. Yes. Just go to our Contact page and fill in the requested information.