New Results in the Social Media Fundraising Debate

There has been much debate about how effective social media, particularly Facebook, can be at fundraising for nonprofit organizations.  An article last April in the Washington Post touched off a heated debate by claiming that the Facebook Causes application, which helps supporters of a nonprofit get their friends to donate, has not done much to increase overall fundraising.  As the article argued:

The Facebook application Causes, hugely popular among nonprofit organizations seeking to raise money online, has been largely ineffective in its first two years, trailing direct mail, fundraising events and other more traditional methods of soliciting contributions. Only a tiny fraction of the 179,000 nonprofits that have turned to Causes as an inexpensive and green way to seek donations have brought in even $1,000, according to data available on the Causes developers’ site…[and] fewer than 1% of [people] who have joined a cause have actually donated money through that application.

Beth Kanter, Allison Fine, and many others jumped all over the article and its analysis.  Their ultimate argument is that social media is just another tool in a fundraiser’s toolbox with which to build relationships with potential donors.  Just as you build relationships over time offline, you have to do so online, and Facebook Causes (and Twitter, and blogs, etc) are another way that nonprofits can spread their net and spread their message and attract followers who can help spread the net, etc.  As Allison pointed out:

Causes on FB enables us to tell our own world – distinct from the world -  about the issues, campaigns, orgs that they are passionate about. We can bring our networks of friends, our ingenuity, our passion, our time, our expertise to support causes.  It enables lots and lots of people to learn about causes and to share them with their friends easily, quickly and inexpensively…The bottom line here is that Causes isn’t just about raising money, it’s also about raising friends and awareness, and in the long run turning loose social ties into stronger ones for a cause may be more important than one-time donations of $10 and $20 dollars right now. Our rush to judge this application effective or ineffective over a very short time period with a primary user base of very young people is off base.

So I am rehashing this argument because an online fundraising company, Charity Dynamics, (which happens to be headquartered in Austin) has just had some revenue-raising success with a new Facebook app they created called Boundless Fundraising. This app allows people to extend the fundraising activity they are doing for a nonprofit into their social media profile pages.  Charity Dynamics just announced this week that the application has seen some pretty impressive financial results just in its first 6 months.  36 organizations currently use the app to increase support and giving for more than 2000 events, and they’ve raised $2.5 million so far this year.

That’s a pretty impressive number, so I asked Donna Wilkins, President of Charity Dynamics, how much of this is new revenue for these nonprofits, and she replied:

The great thing is we’re finding that about 75% of the donations are from new constituents vs a range of 40-60% for other donations for these events. Traditionally when someone fundraises for one of these events through Convio or Blackbaud, they send an email to friends and family requesting support.  The biggest hurdle for participants is sending the email and deciding who to send it to.  Boundless Fundraising application sends a newsfeed that all your Facebook friends see with just a couple of clicks. For most participants this means more friends are hearing about their participation and fundraising.  We had one great story where a participant told us she got a gift from someone and she doesn’t even know the person’s email address.  This is a great example of a friend of a friend who supports the cause. We’re also seeing that participants are now becoming multi-channel marketers and they’re asking for support both in email and on Facebook.  In some analysis you can see where a donor made a gift both in response to an email and through Boundless Fundraising.

So 15-35% (or $375-875K) of the money raised is new money. And that’s just in 6 months.  That seems pretty impressive to me.

The point is that social media is a new tool available to fundraisers.  It’s not a magic bullet, but it if you view it as a new, effective way to find and further connect with donors, you could be on your way to raising more money over time.

Tags: Allison Fine, Austin, Beth Kanter, Boundless Fundraising, Charity Dynamics, Facebook Causes, Fundraising, social media, Washington Post

The Fundraising Payback of Social Media

There’s much talk lately about social media (Facebook, MySpace, Twitter, blogs, etc.).  In fact it can at times feel like the beginning of a cult.  And there is increasing pressure on nonprofits, in the midst of an increasingly difficult fundraising climate, to jump on the social media bandwagon.  Blogs and journals are riddled with articles about how to dip your nonprofit foot into the social media space.  And there are some good tips.  But the bottom line of all of them is just to try something, jump on Twitter, set up a Facebook page, start a blog.  You don’t need to do it all, just pick something.

But in the middle of everything else a nonprofit staff is working on, with tapped out resources, an increase in demand for their services, and doubled efforts in fundraising it can seem that social media is just something for which there is no time or resources.  And what is the payoff anyway?

Well, Roger Craver, a fundraising consultant with The Agitator, has done some pretty interesting calculations on what the fundraising payoff to experimenting with social media could be.  For an organization with 100,000 donors, a social media fundraising campaign, asking donors to reach out to their networks and fundraise for you, could raise over $500,000.  The nonprofit provides a social media tool, for example a Facebook, Twitter or other tool that their donors can use to encourage their friends and family to contribute.

Craver has some interesting math, but basically the idea is that 2.5% of a donor base could raise $210 each.  So, for an organization with 100,000 donors that translates to $525,000 per campaign.  He doesn’t extrapolate this to smaller organizations and really all of this is projection anyway, but what if?  Take an organization with a donor base of 10,000 people.  2.5% of those people raising $210 each would be $52,500.  This is for one campaign that probably cost the organization nothing, beyond minimal staff time.  That’s pretty impressive.  That could replace the revenue from a time-intensive and expensive gala.

But how does an organization get started?  There are two simple solutions that have been generated here in Austin.  First, Charity Dynamics created a Facebook application that allows nonprofits to do this very thing.  And Kimbia helps you create a very easy online fundraising widget that people can send out to their networks.  There are also some Twitter applications, like Twitpay that allows people to donate to organizations via a PayPal-like extension of Twitter.  Donors simply Tweet their donation amount to their intended recipient, in any amount under $50.  And new applications are being developed every day.

So don’t be afraid.  Just get out there and try it.  Despite the many social media “experts” out there, this space is new for all of us.  All of it is an experiment.  There’s no such thing as failure.

Tags: Charity Dynamics, Facebook, Kimbia, MySpace, social media, Twitpay, Twitter