Sometimes virtual goods get a bad name. After all, what father wouldn’t load his shotgun at the thought of his daughter getting a Polka Dot Thong on Facebook? And what mother wouldn’t shake her head knowing her teenage son had spent $1 of her hard earned money to send that thong?

Well, virtual goods aren’t all innuendo and frivolity. Sometimes virtual goods can make the real world a better place. Causes, a popular Facebook Application with over 9 million installs, lets users send over 20 different Charity Gifts to their friends. Charity Gifts range from Blankets (a $10 donation to the American Red Cross which is used to purchase two blankets for people suffering from a disaster or emergency) to Baby Chicks (a $20 donation which helps a hungry family in Cameroon start a flock of chicks) to a Laptop (a $200 donation that provides a laptop to a child in a developing country). Charitable donations are made in the recipient’s name and can be displayed on the recipient’s Facebook profile.

The notion of charitable virtual gifts wasn’t lost on the team at Facebook. When Facebook Gifts launched in February 2007, all proceeds for the month were donated to Komen for the Cure. Facebook chose the foundation because Breast Cancer Awareness is the largest cause related group on the site. Today, Facebook Gifts is a for profit enterprise (quite profitable, Facebook made an estimated $15 million in virtual gifts during the first year of the business). However, if you are willing to rummage through a few thongs, you can still find the Pink Ribbon in the Facebook Gifts store.

CarePages is a free website that helps family and friends communicate with a loved who is hospitalized or receiving health care. Patients and their families can create a CarePage which is very similar to a social networking profile page. Owners of a CarePage can leave updates and upload photos, and visitors to that page can leave messages and virtual gifts. Virtual gifts are free to give and organized into helpful categories such as Encourage, Kids, Smiles, and Support.

PrayAbout is a unique social community that has been described as a way to “hack into God’s inbox”. Members of PrayAbout can submit prayer requests. A prayer request is non-denominational prayer that the submitter wishes to be answered. Members can add photos and update their prayers over time. Visitors to the person’s prayer request may leave a message and may light one or more virtual candles for that prayer. Virtual candles can be purchased for about 10 cents to about 25 cents per candle. They can also be earned by inviting friends to the site, receiving candles for a prayer request, and lighting candles for a popular prayer. Lighting candles is a way for the community to virtually hold vigil for a prayer and show their spiritual support to a member in need.

Handipoints is a kid-focused virtual world that puts a different twist on things. Kids earn points by completing chore charts setup by their parents. By completing these “quests”, kids earn “handipoints” that can be redeemed for real world items and bonus points that can used to purchase virtual goods in the Handipoints online world. Online game designers have known for years that players will do almost anything to earn virtual rewards. Handipoints is betting that they may even be willing to do chores.

Virtual rewards provide a very real incentive and virtual gifts add very real value to our online social gestures. We’ve seen virtual goods at work in the most frivolous parts of our lives, but they can have as significant an impact on the things that really matter like standing by a friend in need or teaching kids that positive habits have long-term benefit.