Facebook, fundraising

Facebook Credits for Good

10 Comments 26 April 2011

image courtesy of Yes!Online via Creative Commons

Whether you realize it or not, Facebook may be the next big online donation platform. And I think it’s not so far off. With the creation of Facebook Payments, and the new structuring of Facebook Deals, I can envision Facebook developing an online donation platform where donors and nonprofits collect and disperse Facebook Credits, resulting in real-world cash for nonprofit organizations. Here’s why:

Facebook currently owns and disburses a Facebook-only currency, Facebook Credits. If you play a game on Facebook that requires you to purchase virtual goods, you probably have to use Facebook Credits. (“Most transactions within games on Facebook now require that you first purchase Facebook Credits and then go to your favorite game to exchange your credits for the in-game currency,” according to Facebook’s Help Center.) Facebook also pays out the real currency players spend: “Facebook splits revenue from Facebook Credits with app developers, meaning it has to disburse funds as well as collect them.” What’s more, it’s no small market: virtual goods for sale on the site make up an estimated $835 million market.

Facebook Credits for Facebook Deals. Facebook launched Facebook Deals in five US cities yesterday. Soon, you will be able to buy Deals with Facebook Credits. (For the time being, you receive a voucher that you can redeem for the Deal.) However, it really is only a matter of time until kids “load up with Credits with the intention of giving it to Zynga for Cityville crap and end up spending it at The Gap instead,” as ReadWriteWeb noted yesterday.

Facebook is preparing to move into the payment space in a other ways as well. Facebook recently formed a subsidiary, Facebook Payments, which will handle payments to developers related to the Facebook Credits program. According to a Venture Beat article, Facebook insiders say that they want to move into e-commerce. It is rumoured to also want to create an ad network in competition with Google’s AdSense.

The bad, bad news: Facebook takes a 30% cut of of all Facebook Credits transactions. That is HUGE. More like UNreal. A whopping transaction fee (remember all the cries about Jumo’s 20% transaction fee?) would cripple its chances of success. Facebook may think it can create “one platform to rule them all,” but I won’t be using it if it harms the organization to the tune of 30% of the donations.

I may be wrong, of course, but it’s looking to me like Facebook may jump into the online donation space. If they do so, Facebook would be primed to be a nonprofit organization’s dream platform: it knows a LOT about the personal lifestyles of billions of users, and it has expertise handling real-world and virtual currencies.



Debra Askanase is an experienced digital engagement strategist, non-profit executive, and community organizer. She works with mission-driven organizations to develop digital strategies and campaigns that engage, create trust, and move stakeholders to action. Debra speaks at conferences worldwide on the intersection of technology, social media, and nonprofit organizations.

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