Hello, Washington Post: Dolllars Per Facebook Donor Is Not the Right Metric for Success

 
Flickr Photo by Vaguely Artistic

This morning the Washington Post published an article titled "To Nonprofits Seeking Cash, Facebook App Isn't So Green: Though Popular, 'Causes' Ineffective for Fundraising."  When I first saw the article, I thought it was the article from a year ago where they said basically the same thing.  Proclaiming that fundraising using Facebook Causes was a failure based on a calculation of dollars per donor. 

Back in 2007, when Facebook opened it doors to people older than college students and nonprofits started the early experiments on Facebook Causes, Froggy Loop did an extensive analysis "The Long, Long Tail of Facebook Causes" using the dollars per donor analysis.  At that time the Facebook Causes was only two months old and in their conclusion they pointed out that fundraising on social networks was not a silver bullet and that it takes time. 

It's still too early to measure success in aggregate dollars per donor.  Steve MacLaughlin points out "If the reason why you want to use social networks is just to raise money, then stop now. It doesn't work that way."  And, as Tech Hermit blog notes, there was quite a discussion about this on Twitter.

I asked my colleague Allison Fine if she was blogging about this article and she published a great piece called "Washington Post Disses Facebook Causes"   She points out some inaccurancies in the post article that skews the dollars per donor number because of the large number of inactive causes on FB or the number of causes who never intended to raise money using Causes.

Allison goes on to reframe how we need to think about Causes.  I'll boil it down to "Causes is A Friending Tool, Not A Fundraising Tool." (Credit to Steve MacLaughlin for that)   Go read it and come back.   I agree with her points:

• Causes facilitates the spread of your organization's message.   The nonprofit doesn't have to do all the heavy lifting.  Allison suggests that we're looking at the wrong metric - we should be measuring success using awareness not dollars.  I agree. So does the GummyPrint blog who shared this case study of their work on Facebook Causes.

• Allison reminds us that while we've read a lot about the dramatic increase in babyboommers getting on to Facebook, the majority of Facebook users are younger and they aren't in the prime earning years (yet)

• Causes has demonstrated its ability for distributed fundraising for causes where there is the right stimulus.  Allison points out the numbers for America's Giving Challenge on Facebook sponsored by the Case Foundation.

I'd also add that if you do the relationship building piece, you can get better results with fundraising dollars on causes.  Earlier this year, I was able to raise $6,893 for the Sharing Foundation using Causes birthday application from 167 donors.  If you do the math, that's $41 per donor.   There were 349 people that joined the cause, so that brings the average down to $19 per donor.   It's the relationship building, it's the relationship building ..... 

My fundraising colleagues concur.  Betsy Harman says:

Any nonprofit who thinks they can simply put a donate now button on their website or simply create a "Causes" page on Facebook and wait for the money to roll in, doesn't understand online fundraising. It's still all about building relationships, telling your story, and taking potential donors through the process of cultivation, stewardship and solicitation The Facebook Causes application is just a tool for peer to peer fundraising but in order to raise money that tool has to be used by someone who is passionate about the organization and proactive about telling the organization's story, making the ask, and linking to the tool. A lot of people and organizations have also created causes pages that don't even offer the ability to donate through NetWork for Good. They were created as a marketing/ awareness building tool so that people can say "yes, this is an organization I believe in and I'm proud to tell my friends and colleagues that I care about this cause."

Almost six months ago, I wrote a chapter for BJ Fogg's Psychology of Facebook apps about fundraising applications on Facebook.   My conclusions about Facebook Causes were all of the above, plus I did make some points about the need for Causes to improve some of the interaction design to better support the fundraising workflow.  They've started to make improvements, but there is probably more they could do as my colleague, Brian Reich, pointed out on a wall post on my facebook profile:

Causes doesn't understand nonprofits, they just built a great tool. They should be doing more to help organizations understand how to take advantage of it. And organizations need to shift their view on how to use technology/the internet to accomplish things (and especially do more than just raise money).

Brian shared some more thoughts in his post, "The Internet Has Made Us Lazy." He points to this paragraph in the article:

It seems foolproof: nonprofits using the power of the Internet to raise money through a clever Facebook application. After all, the Web earned gobs of cash for Barack Obama’s presidential campaign. And besides, going online means sending fewer fundraising letters, which makes it appealing to penny-pinchers and environmentalists alike.

Brian suggests that too many nonprofits have taken the build it and they donate approach - that simply by using the tools we'll raise lots of money. I agree that's not true. It's the relationship building and that takes time.

Ivan Boothe in the comments of Allison's post puts in another way:

Causes has been incredibly effective at organizing activists and keeping them engaged through a variety of different means — not the least of which is the building of an identity (”I am a climate change activist,” “I am part of the anti-genocide movement,” etc.). In fact, asking for and receiving donations has, in the nonprofits I’ve worked with, only ever been pursued on these networks as a way to reinforce this identity, not as a way to raise large amounts of money.

Someone who expects Causes — or any social networking approach — to replace their development director doesn’t understand the nature of social networks. It’s not about building a more effective ATM — sorry, “donor list” — it’s about cultivating relationships with your most passionate supporters, giving them ways to speak in their own voice and connecting them with other people. Most young folks who are on social networks get this, since it’s how they’re relating socially on these networks already. (As danah boyd has said, “We’re not addicted to computers, we’re addicted to friends.”)

It’s the nonprofits who expect to replicate their year-end fundraising drive whole-hog on Facebook, and the media who cover them, who don’t get it.

Well, not all nonprofit organizations "don't get it,"  I got some private messages from folks who work in both fundraising and social networking tell me this:

All to say, I think the article provides really useful way, frankly, to change the conversation from "I gotta have this Facebook thing right away to raise money" to "gee, let's talk more about overall strategies to raise more funds online and offline" with folks who have little experience in interactive topics. Any help i can get on that front is always welcome, welcome, welcome!

I want to return to the whole dollars per donor metric and the question of whether we can put a dollar amount on social connections made through social networks.   Stephen Baker at BusinessWeek is working a series of posts on value of virtual friends.  The post summarizes some recent research about businesses looking to calculate the dollar value of social connections.  

In Allison's post in the comments, Joe Green, Founder of Causes, points out that while "on a per user basis it may be low, the total number of donors and dollars is something we are very proud of, especially for a new start up raising money $25 at a time."   Allan Benamer shares the numbers in the comments 

So I think we need to look at the lifetime value of getting a potential donor to join our Cause on Facebook and engaging and educating them about our work.

What do you think?

Comments

[Brian Reich]

Great post, Beth, and thank you for including me in your roundup. Two additional thoughts I would like to add: First, while I think we (on the side of those who study and work with groups to help them understand how to use technology) understand the true value of Facebook causes, nonprofits probably give more weight to something in the Washington Post (or similar mainstream news) than anything. So, the fact that the Washington Post got it wrong will not matter -- the message that many groups will take from today's article - no matter how many blog posts are written in response -- is that Facebook causes is, well, a lost cause. And by extension, they'll start to think Facebook may not be right for them, or maybe social networks, or even online communications....

Second, I think there is a larger problem, which is that Facebook Causes has been sending the wrong message to the nonprofits. I have been at numerous presentations by the founders, and other staff from Facebook Causes, and talked with them at various points directly -- and at every turn they explain how easy it is for nonprofit organizations to use their tools to raise money. They lead nonprofits to believe that their tools are the reason groups have raised money, or generated a following, or similar. That message resonates, the groups sign on to Facebook causes, and they truly believe they have found an easy way to raise money or grow their organization. And by the time they realize that the technology doesn't replace the other aspects of fundraising and communications, or that it will take time to cultivate a loyal audience and such, they have expended a lot of energy and reached a high level of frustration and disappointment. The result is a chilling effect across the entire organization, not just for Facebook Causes, but for the internet and technology more widely. Its obviously not just Facebook Causes that does this - technology providers across the board have been selling their tools as the solution to a variety of nonprofit communications, engagement, fundraising and other challenges since technology first came around. Maybe those technology providers really believe their tools will result in a quick win for nonprofits (I disagree). Or maybe they just know that it is effective marketing and care more about selling tools than supporting nonprofits in meeting their missions (I hope not). Either way, the unfortunate result is that too many organizations have invested significant funds in technology and not seen enough of a return, not enough nonprofit organizations truly understand how to use technology and the internet to advance their efforts, and few, if any, are paying attention to how communications and engagement and fundraising have changed as a result of our society being so connected and what that means to how they need to operate as a nonprofit period. And though you, and me, and Alison, and many others continue to push for better understanding, and more appropriate use of technology (and such), the message that the technology folks push is often simpler, seems easier than the long hard slog that is relationship building and community engagement online, and nonprofit groups keep making the same mistakes over and over.

[Maggie]

I was so happy to see this post, having just finished reading the article in the Post and feeling disheartend. I need to send this post to the foundation I just convinced to start a Cause on Facebook, because I know they will read the Post article and take it as the gospel!

[Marion Conway]

I really have a problem with Causes. It has way too much junk which people started once and never went back to. The only way for Causes to get out of this reputation is to come up with a plan to remove Causes with no activity after a period of time - even if it is a year. Otherwise it is going to grow into a huge wasteland with a very occasional successful cause.

If you scroll thru and see cause after cause with no $ raised, it makes someone who is even thinking about giving question whether or not most of the stuff there is real, worthy, etc.

I agree with the need to build relationships along with Causes for it to work, but i have to wonder about the effort needed to put into it in order to get a return.

I would prefer to follow Michael Ames' advice - which includes reading this blog for three months before you start - for fundraising on facebook. I would never recommend causes to anyone.

Marion
http://marionconwaynonprofitconsultant.blogspot.com

[Lateef]

Brian makes a great point - the fact that Causes' staff pushes the app as a method for raising funds is disheartening(instead of balancing their claims with theories regarding the long-term ROI by cultivating communities). I've seen comparisons to Network for Good and even ChipIn.

As the benefits of social media become more apparent nonprofits are establishing communities and investing time/resources on their various online presences - they are seeing very little in terms of quantifiable ROI (in some part the fault of tech consultants that make ridiculous promises) - and responding by hiring their own on-site staff dedicated to online marketing. As this practice continues we're beginning to see the adoption of social media/online efforts as an extension of traditional outreach goals - which under the right direction can be converted to monetary gains, even in the short-term (Beth has raised crazy amounts w/ Twitter alone!).

[Allison Fine]

Beth, this is a superb summation of the issues surrounding Causes (naturally!) And thanks for the shout out. I wonder if there is someway that a critical mass of folks could ask Causes for a sit down to talk about these issues -- after all, without us, Causes certainly won't be successful.

PS I really love the idea of measuring the value of the lifetime experience of a participant, thanks for raising it!

Allison

[Account Deleted]

Excellent points in your article and comments. A couple of additional thoughts:

1) Nonprofits are no different from commercial companies who sometimes/often get sucked into believing that a channel/tool is the solution and forget that the reason a donor/fan/customer pulls out his/her wallet has nothing to do with technology. The nonprofits who succeed using Causes or any other tool have a compelling issue or offer. AND, as you point out, the people representing that offer on the nonprofit side are successful at communicating their passion well enough that it spreads around. These technologies are really good at spreading news and offers around - taking advantage of that moment of passion we feel when we click "fan" or "donate now" to let us share the love with our friends. But the passion definitely comes first.

2) I struggle with connection between "relationship" and "donations". I agree with you that the main function of these tools is to build and foster relationship, but there IS a tie between that relationship and money which is vitally important to non profits. In my own work I try to look at the global effect of the social network channel vis a vis other channels in terms of overall cost and return (not just financial). I like how you break out the dollar-per-fan because I think it tells an important story about how the larger fan base contributes to the donor base. Unlike other channels (gala parties for example), we focus on "the donors that matter" and really pamper that small pool of large donors to make them feel special, because that pampering is important to them (and they ARE special). But through a social network it's a different dynamic and the donor and the fans are ALL equally special for their potential to spread the word, creating a larger pool of moral and financial supporters. The art of leveraging this channel towards financial contribution is in #1 above, tapping into the message and passion that will attract dollars from those who can pay among the (hopefully ever growing) pool of supporters. But their support (i.e., fandom) has to come first.

3) Back to the message - non profits have a tendency to believe their passion is widely shared. Even when it is shared, it's not always the priority for their potential donors that it is for themselves. This can be a strength when pitching those big donors personally when you can "feel" that moment when the close is attainable, but in the electronic realm it can be a liability because your potential donor is browsing many many options - not just for donations, but for purchases and news and links and photos etc. So the passion and the message need to be massaged a bit, more attention paid to frequency of contact (but not overfrequency), communicating good news, passing around (related) humor or photos or other potentially viral content (i.e., mingling at the party before identifying your target). In other words, it's a different strategy all together and one that takes independent planning. Facebook, Causes and other tools are just tools to enable this other strategy, but the strategy comes first.

I could go on but this more than enough. Thanks for the stimulating article!

[Josh Futrell]

Agreed that $ raised is not the only metric one should use to consider the ROI of Causes; but, if you're going to measure Causes primarily on metrics of awareness spreading or relationship building, you need to evaluate whether Causes is actually more capable of achieving these goals than other aspects of Facebook. Does spending an extra hour on your organization's Page or Group give you more return in these measures than an hour spent working on Causes? My gut instinct says yes. I wonder if any research is out there on that...

[Betsy Harman]

Thanks for quoting me in the post Beth. Lets hope this gets out for a lot of nonprofit organizations to read! I'll add one more thought. For some people joining a cause is like putting a virtual window sticker on your car or a button on your shirt. Those virtual buttons are posted on individual profile pages and this means something in awareness/brand building for the nonprofit. Causes also tracks who the top recruiters are for the cause so it can help you identify who you might reach out to in order to help tell your story.

[David Collin]

This post and discussion would make an excellent primer for nonprofits thinking about social networking. Maybe Causes would post it as a guideline. We should have a wiki or something for real case studies and best practices for getting beyond the first contact.

Also, IMHO, a lot of fundraising approaches in nonprofits are really stale. Haven't change much in years and can be a turn-off, especially to younger folks.

[David Collin]

Oops! The wiki already exists in We Are Media Project: http://www.wearemedia.org/

[James Young]

Great post, Beth! I agree that the main point of social media is to facilitate connections between people who are passionate about a certain mission, and that the first and foremost metric should be engagement. The pay off from these connections will be seen down the road, I believe.

I think there is another aspect to consider, however. Direct Mail and Email campaigns are more effective in the sense that they are driving a direct connection between the organization and the person. With that connection made, organizations can be more aggressive about asking for money, and frankly, they are driven to do it as a business. Social media tools like Causes and Change.org are people driven, and we as individuals are not nearly as aggressive about asking for money. Some of us, like Beth, have gotten to a position of respect where asking more aggressively is OK because of the value she brings and respect she commands. We can't expect most people to be as effective at that, and so by association these tools will be less effective, when compared to email and direct mail.

Finally, each of these tools has their own audience, and I don't think it is fair to think that any one tool can drive the same levels of giving as the organization can itself. I wonder how the giving stacks up if you combine the results of all of these tools (Causes, Change.org, Just Giving pages, etc.). Would the category of social media driven fundraising compare well or even respectfully against email or direct fundraising?

[Joe Gunn]

Having been one of those folks who have used Facebook to fundraise, I can't agree more. I love the greater interactivity it can provide for fundraising. People can more easily ask questions about your cause and getting them to visit the organizations website is just a click away. (It's also easier for other fundraising to share tips with one another.) I think soliciting donations is actually more work on social media sites than it is offline. It is all worth it though. Individualized messages for each potential donor are a great way to not only to raise money in an interactive way, but to build relationships many of the weak ties all of us have on Facebook.

[Shannon K. Aronin]

I am frustrated by the mainstream media's portrayal not only of facebook and causes but social media at large. I think perhaps they are just a wee bit bitter.

Re: Causes though, people point to the Obama campaign, but very few are even attempting to follow the model. They were constantly asking for something, and managed to not come across as greedy but as fellow Americans invested in the same things we all are. And they never JUST asked for money. There were always multiple channels that were offered to get involved. Perhaps nonprofits could use causes more frequently to out out calls to action, and remember that a volunteer is much easier to turn into a donor.

Thanks Beth for looking more closely at this article that, sadly as you said, will discourage many nonprofits away from social media.

[Jessica Dally]

"If you scroll thru and see cause after cause with no $ raised, it makes someone who is even thinking about giving question whether or not most of the stuff there is real, worthy, etc."

As a founder of an organization that doesn't ever take cash donations of any kind from anyone I must say that I have issue with this idea. The reality is that there are many reasons to use this and other social media applications beyond fundraising. Spreading the word about your cause and what you're doing has implications far more broad then just financial and in the end tracing your donations back to the original reason or place where someone heard of your organization could be difficult. If what you're doing really is important then there is value in people knowing that you're doing it, regardless of their propensity to donate.

[Robert Tolmach]

Great post, Beth!
Our experience operating http://www.ChangingThePresent.org is consistent with some of the other comments above. The nonprofits that spend even a few minutes letting their supporters, staff, volunteers and Board know of their profile on the site do far, far better than the ones that expect money to start falling from heaven, on its own.

[Jyl (Mom It Forward)]

I love this post. I especially love all the people you quote that have written on this topic.

I'm smack dab in the middle of a social-media driven fundraiser... my first big initiative. So many lessons learned and yet to learn... but the piece on building relationships and raising awareness really hits home. At least for me, when I first started, I did have dollar signs in my eyes, knowing how much help each of those dollars could bring. But, as the fundraiser has progressed, I have recognized, even during points when we were meeting our financial goals, that these other things, especially watching the community develop and bond over something so meaningful, has been truly eye opening and is so huge in the scheme of things.

Not only that, but being able to tweet with people in Africa— recipients of the micro loans we are raising money to provide them with—who can put a price tag on that? That a technology like twitter can bridge distance and location and help us focus on our similarities... things like family, raising children, working, etc. is simply amazing.

Thanks for the post!

[Thomas Aitchison]

Charity Dynamics put out an announcement yesterday related to fundraising on Facebook, so I wanted to chime in (though realizing I'm quite late to the conversation.)

NP tech vendors and consultants certainly will let organizations down if they go in trying to sell their (enter product name here) as the silver bullet. Organizations, as pointed out by Brian, don't need to be misled into thinking that the technology in and of itself is the fundraising panacea. Those providing the tools need to educate organizations (and set appropriate expectations) that their social media presence supports a stronger integrated marketing and fundraising strategy, since you're introducing a new channel through which to connect and build relationships with potential donors.

Second, one point I haven't seen discussed, but something Charity Dynamics hears often from its clients, is that social networks like Facebook provide a good "passive fundraising" experience. For many donors, making the ask itself -- especially during dismal economic times -- can be the most difficult part. They fear asking for money directly, so putting a fundraising badge up on their Facebook page is an easier, and safer, way for them to at least try to raise a few bucks for a cause they believe in.

Last, Charity Dynamics contends that if nonprofits use Facebook to extend peer-to-peer fundraising, they WILL see better results. One recent event, the Hill Country Ride for AIDS, is a shining example. They smashed their fundraising goal (raised more than $690K) and saw a significant boost (30%) in participation for their recent event. Organizers have given a tremendous amount of credit to their first time use of their new social networking tool, Boundless Fundraising, to help them achieve these new records. And they're especially ecstatic that they were able to do so well given today's challenging economic environment.
More at www.charitydynamics.com/hillcountry

Since January, a small group of nonprofits using Boundless Fundraising have sourced more than $1.5 million through the application, and other big name organizations have also started lining up -- including Lance Armstrong Foundation, American Cancer Society, and American Heart Association. When you reach more people via social networks, you will raise more money. Organizations just need the right social networking application to be successful.

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