Facebook Causes is one of those conundrums in the nonprofit world – it seems like a perfectly wonderful tool for gaining attention for a cause, but there are significant barriers to adopting Causes as an online giving mechanism. It may appear to be a good solution for the nonprofit seeking new revenue streams: Give! Where you already spend time online! Easily! It’s viral! – but very few organizations have figured out how to translate this idea into any type of reliable or significant source of revenues. I attended two workshops at NTEN’s annual Nonprofit Technology Conference that addressed Facebook Causes and offered statistics, best practices and guidance. (I’ll save summaries from those sessions for another blog post.)

However, what arose out of those sessions was this concept:

Facebook users are not used to giving money on-site; in fact, it’s not how they use the site. Yet. Facebook users are going to a party, not a fundraisng house party.

Think about it: when you are visiting Facebook online, do you also think, “I’m on Facebook and I’m ready to also give some money while I’m here…socializing?” Not really. That’s what you do at a fundrasing house party, and not at a social event.

Here is how most people use social networks:

I don’t see “giving money” on the list. However, “organize with others for an event, issue or cause” is listed. Facebook seems ideal for communicating ideas.

Maybe donating money within a social network is closer in nature to clicking on an ad? The habits of social network users are one obstacle. According to emarketer, “In 2008, IDC found that 43% of social network users never clicked on ads, a dramatic difference from the 80% of other Internet users who did so at least once a year. Further, 23% of nonusers who clicked on an ad then made a purchase; only 11% of social network users who clicked on ads did the same.”   When people click on ads, they are interested in making a purchase, or thinking about making a purchase. When people on social networks click on a Facebook Cause, they may be interested in supporting the cause (possibly the 43% cited in the Pew Internet study), but not making a donation (purchase) to the cause.

According to the session that I attended at NTEN, “Valuing Online Fundraising,” only two nonprofits have raised more than $100,000 through Causes.  Fewer than 50 nonprofits have raisde more than $10,000. However, from 2007 to 2008, the average average amount donated per cause has increased from $31.25 to $41. According to the Causes developer’s page, the average donation is now $45.52, and there are 155,000 Causes listed (for 32,000 unique non-profits). According to this article by Allison Fine, only about 8,000 of those Causes have also created a Network for Good fundraising dashboard to raises money for the Cause. If you take that into account, then the average donation per organization with a Network for Good dashboard is closer to $930.That shows some signs of improvement. Which organizations have raised the most? Both the Nature Conservancy and Students for a Free Tibet have raised over $100,000, and Save Darfur has raised about $80,000.

I don’t think any organization should give up on Causes, nor any other social network-based fundraising efforts. It’s just that people are socializing on social networks. They are meeting up with friends and chatting at virtual events or parties online. They are even making people aware of causes by organizing for a cause (see chart above). They aren’t, in large part, raising funds on social networks. Raising funds through social networking is the future – but the Causes application is in no way the “fundraising house party” widget that it needs be to raise awareness and funds.

And maybe that is the issue. Perhaps Causes should to divide itself into an awareness application and a fundraising application. The expectations are just too high on the part of the nonprofits -  that awareness passed along easily through social networks will translate into donations. This is the same translation challenge on every medium- from email fundraising to offline event organizing. The difference is that when a nonprofit supporter receives an email from a nonprofit, that person is now acculturated to expecting a donation request.

According to Facebook Causes, “a cause is an online campaign for collective action that can be started by any Facebook user. The creator of a cause can champion any issue…like ‘Support the Berkeley Y.M.C.A.’ The cause creator conveys the primary goal of the cause in the title they choose and the various fields they can fill out to describe the cause.” The offline equivalent would be asking people to take action, such as signing a petition or making a phone call. It’s different than asking people directly to give money.

I know the argument: engagement leads to donations. That is a true fact. What I’m arguing is: the expectation is that if one joins a Facebook Cause, the money will follow. This has more to do with how people want to use social networks than whether or not Causes can raise money. Engage with your supports on social networks – it will lead to donations. But right now, those donations are happening where donors are used to donating: from their checkbook, or when led to donate on a website.

adoption barriers, people have to first change their patterns of online behavior. If your organization isn’t currently trying to raise money through Causes or any other social network fundraising application, it is missing an opportunity. Two years from now, I predict that online behavior will again have shifted and that social network users will become accustomed to donating through social networks. Early adopters will be at an advantage in two years’ time. They will be the ones that understand best how to utilize Causes to create large fan bases and raise funds…by the time their fans are ready to give regularly online.

It’s just a waiting game now.

image by 10ch

I’m at the NTEN 2009 Conference attending the session “What It’s Worth: The Value of Online Fundraising.” The session is presented by Allison Van Diest of Blackbaud and Clinton O’Brien, VP for Nonprofit Services with Care2. . Nonprofits use Care2 to recruit new donors and supporters and advocates for their organizations.

Goals of the session:

Why would you benchmark? How to make the case for fundraising tactics using measurements.

Purpose and value of benchmarking web metrics.

Review some 2008 industry benchmarks. from a March 2009 survey. What the data reveals, or doesn’t.

Case studies.

Purpose of benchmarking

Need them for goal-setting, comparison, prioritization, to make a case for resource utilization, forecasting results.

Sources that informed this benchmarking:

-1200 responders to State of Nonprofit Industry Survey 2008

-Blackbaud client data

-Care2 community data

-Q1 2009 State of Nonprofit Industry Survey: Return on Internet Investments:  93 valid responses. 97% of respondents had a website. 56% held email marketing or fundraising. 52% participate in social networks. 1/3 had revenue under $1mil, and 1/3 revenue over $10 million. Good mix of verticals in type of organization (largest group type was health care orgs at 17%). Most responders are fundraisers at the organizations.

Below is analysis of data from the Q1 Survey (93 responders), but integrated with other data from Blackbaud when noted:

Website benchmarks:

• 52% had a positive ROI on investment
• 26% made no investment
• 22% had negative ROI
• median amount collected through website transactions was $5,000 (this included organizations that didn’t collect any money also).
• Median ROI of website value was 110% (took the number in the center to get the median vs. mean number).
• From those that collected at least $1 in website transactions: $20K was median dollar amount collected through website transactions and 37% median ROI from website transactions .
• NOTE – Definition of “investment”: asked orgs to give a $ amount for website building and consulting amount and HR related website costs which was the self-reported “investment” from 2008

Need to consider the source: how did people get to the website?

• 63% of those with positive website ROI conducted email marketing or fundraising campaigns
• 46% of orgs with positive website ROI reported participating in social networks.

Note: these organizations may not have had a positive ROI of each channel, but did for the website, so reconsider how look at ROI for channels is a thought.

Email Benchmarks

Asked people to figure out value of an email: of those who reported doing email marketing, median number was 290,000 emails sent in 2008. Average return per email sent was $8.16  But-. average website return per email was $18.37.ISSUE:  How to differentiate whether email sent brought the money in or the website brought the money in? That is to be addressed. Most orgs aren’t sourcing if email drove the donation at the point of site.

(A side note: bulk of email campaign responses should be within 48 hours of email sent! However, it could different by audience, as an audience member notes. This audience member notes one of her clients receives the buik of return after two weeks! So there are exceptions.)

Median amount dollars collected as a result of email marketing is $1,000 (including those that don’t collect any money).

Median ROI from email marketing is 53%

Median amount collected from orgs that collect at least $1 from email marketing is $10,000.

NOTE:

• Only 18% of organizations credit positive ROI on email programs, but 63% of organizations with positive website ROI say they send email campaigns. Question is are they tracked properly?
• Orgs with positive website ROI who sent email campaigns brought in 2.8 times the website revenue -takeaway is that targeted asks might be more effective than just having a donate now but’ont.
  
• Orgs that have 6 – 10 events “a-thons” a year averages $60K in online event revenue. All other orgs averaged $39K. Implications? Maybe affected by size or client reach of the organizations.

The amount of revenue earned TRIPLES if an organization engages in email campaign versus just offering the “donate now” button on the website.

Online Event Benchmarks

Only 15% of orgs offer online participation in an “a-thon” or “friends asking friends” type of event. But arts/cultural orgs are more likely to hold them. Median amount raised is $11,000 online.

Blackbaud additional data from its clients:

• friends asking friends  (FAF) emails have a 90% greater open rate.
• Average online gift size is $59.40.
• 32% of FAF emails resulted in a transaction.
• average participant sends 27 emails.

Social Media ROI

Remember: about half of those surveyed use social media. 17% of them put money into using the networks.

• Of the 17% investing resources in social media, 63% reported positive ROI.
• 92% participated in Facebook, 44% use Twitter, 33% use Linkedin, 29% use MySpace, 13% use other networks.
• Of organizations participating, they averaged participating in 2.4 networks each. Of those participating in only one network, all but one use Facebook.
• Median ROI was 125%, median dollars raised was $200, and AVERAGE revenue raised was $41K from those reported raising money.
• Orgs connect with a median of 600 individuals through social networks.
• Average value of networking individual was $1.60

Social Networks = Free Donors? (Clinton O’Brian from Care2)

The purpose of today’s session is to look at the monetary value of social networks, but we recognize there are other values.

Facebook Causes Report just published March 2009.

25 million users reached through FB Causes. It has raised $7.5 milion in 2 years.

179,000 causes participate. 46K participate. # people who have donated = 186K (.7%)

Only two nonprofits have raised more than $100,000 through Causes.

Average gift =$ 40.54. Less than 50 nonprofits raising more than 10,000.

From 2007 to 2008: Average money per user donated has increased from $.21 to $.31. Average amount per cause has increased from $31.25 to $41.

List of several case studies: Susan G. Komen Foundation, Save Darfur, and Birthday Causes. None of them raised a lot of money.

One interesting tool to help you figure out ROI of Social Network Investment is the Care2 tool. (Their blog is www.frogloop.com which engages with nonprofit professionals and share best practices.) It asks user to provide inputs on their social newtowrking and email investment and gives ROI for outputs, along with four-year ROI projections.

Commentary by Care2′s Clinton O’Brien- most organizations aren’t going to see a positive ROI from this calculator. The thing you need to think about is the opportunity cost by investing employee time in social networks. Question: What aren’t you doing?

Audience question about choosing among the different social networks:

Answer: MySpace is for a younger group, Facebook has the numbers and users, and a good activ base. One audience member offers that alumni groups are using Linkedin very effectively.

My Takeaways:

1. Email campaigns (and email related activities for raising funds) are still the most proven and effective investment an organization can make.

2. Don’t rely on social networks for fundraising, but they may very well drive people to donate on-site.

3. Track where every person comes from and why they decided to donate on the website. Are they a network member? Could this have raised their awareness and encouraged them to donate on the website?

TheNew York Times’ article Utilities Turn Their Customers Green With Envy provides a few good pointers for social network fundraising, even though the article is about utility bills. The Sacramento, California utility company created a pilot program that issued personalized bills to some customers, using “smiley faces” and “frowny faces” on the utility statements in order to illustrate how a customer’s electricity consumption compares with his/her neighbors’ consumption. Those who received comparative, personalized statements cut their energy efficiency by 2% more than those who did not receive smiley or frowny faces.

The article article also cited an experiment conducted by social psychologist Robert Cialdini, of Arizona State University, and another colleague that illustrates the effect of peer pressure.  “…(Cialdini) and a colleague left different messages on doorknobs in a middle-class neighborhood north of San Diego. One type urged the residents to conserve energy to save the earth for future generations; another emphasized financial savings. But the only kind of message to have any significant effect, Dr. Cialdini said, was one that said neighbors had already taken steps to curb their energy use.”

Social network fundraising should include competition to reap higher rewards.

image courtesy of Cambodia4kids

The concept of social network fundraising is leveraging one’s own social network to raise funds. Facebook and MySpace are two online social networks that have figured out that leveraging one’s peer network for good is good business…and raises funds. They utilize the concept of “people to people fundraising” — raising money from people you know, rewarding them and making it fun. Beth Kanter posted a summary of the concept in her post here, and be sure to read the comments which offer further amplification of the concept.

How can we leverage our networks to raise funds the most efficiently?  Think about what the municipality of Sacramento learned:

• People react (and change behavior!) based on how they compare with their neighbors/friends.
• People compete to be as good as their neighbors/friends, as long as the comparative results are public.

There are many great examples of organizations utilizing Facebook Causes, Chipin and other online donation programs and widgets which incorporate the two points. For example, the Facebook Causes application allows network friends to view who else has donated, what amount, and how close the network is to reaching the entire fundraising goal. Joe Green, founder of Facebook Causes says “Facebook and other social networking sites mimic existing relationships, making users feel more pressure to get involved.” (Beth Kanter’s Five Things I Discovered About Facebook Birthday Cause highlights all the best features of the Birthday Cause application.)

Can we quantify what difference the “public” aspect of people to people, or network, fundraising makes compared to non-disclosed givers and amounts? I’d love to hear of further pilot studies using online giving where one group knows how much its peers/network friends are giving and the other does not.

My bet? Peer pressure is just that, and it makes a big difference.

Further reading:

Online fundraising widgets at We Are Media and a toolkit for getting started linked here.

Social micro-fundraising tools: screen shots and compilation on Mashable.

Wild Apricot also compiled a List of Online Fundraising Tools to consider, many of which are peer-to-peer based tools.

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