Slam Dunk or Snake Oil? Everyone wants to Raise Money with Social Media. But is it Possible?

Check out any nonprofit Web site these days, and in addition to an About Us page, you're likely to see icons for Facebook, Twitter and MySpace. These social-media widgets have fast become wallpaper on almost all charitable sites. But does social media really work for fundraising?

To answer this question, get a sense of how much money nonprofits are actually raising via social media and garner some advice on best practices in using these tools, I went straight to the expert. Check out my interview with Geoff Livingston, author of "Now Is Gone — A Primer on New Media for Executives and Entrepreneurs" and chief marketing officer of Zoetica (a new company he formed with social-media guru Beth Kanter).

Jocelyn Harmon (JH): It's clear that a majority of nonprofits have jumped on the bandwagon when it comes to using social media to promote their issues, friendraise and increase brand awareness, but serious questions remain about the effectiveness of these tools to raise money. Are nonprofits raising money via social media? If so, how much?

Geoff Livingston (GL): If I were in charge of development for a nonprofit, social media would not be the first place I would look to build my charity. I've heard lots of ballpark numbers, but none higher than 2 percent to 3 percent of total cause sector funds raised. Now, some organizations are great at social, while most are just terrible, so I question whether a mean average applies. But seriously, hire an experienced development director first.

Social media to me is a better awareness and community development tool. It can be used for fundraising, but without a die-hard community in place first, that's not going to happen quickly. In fact, you will spin your wheels and think that "social" doesn't work.

I would focus on building a social community. Whatever you want to do online, having real relationships with people that care about your cause and are influential in their own social networks is the essence of success. Then, after it matures, begin harnessing willing community members for online grassroots fundraising.

In addition, be smart. Integrate donation capabilities into your social efforts. Meaning, use the social-site real estate to give people an option for donating. If you have a blog, and there's no prominent donation badge, shame on you. You just lost your very captive, interested social-media community who wanted to donate money — even if it's just 1 percent to 2 percent of them. Twenty online donors every month is better than none.

JH: It's almost three years since the launch of Causes on Facebook, and more than $21 million has been raised. But, according to Giving USA, this compares to more than $300 billion raised in total by nonprofits in 2008. Blackbaud analyzed this data and suggests that of this $300 billion, approximately $15 billion was given online. In short, even if you only focus on online giving, the numbers don't seem to add up. Is social media, in particular Facebook, a good tool for fundraising? 

GL: I am not a big fan of Causes. It's platform-specific and doesn't enable the cause to have access to the database for further cultivation and e-mail. Further, their reporting mechanisms are frightening and hard to analyze.

Lastly, the numbers as referenced here are unimpressive. Alone, Twestival, the Armstrong Foundation, 12 for 12K and Tweetsgiving account for one quarter of that total — in one year. There are much better ways to fundraise online and in social media. For example, start by growing your e-mail list.

JH: You recently raised more than $5,000 for the Lance Armstrong Foundation in a few weeks using social media like Twitter. What did you learn from this experience that other organizers and nonprofits can follow? 

GL: I wrote a whole post on the individual things I learned (tinyurl.com/y82erut), but strategically I would tell nonprofits to have a grassroots fundraising coach in place to encourage people through the process. It can be a slog, and having coaches there to help, encourage and make suggestions is a win-win for all of the parties involved. I think this is no different than having a development director who handles mid-tier donors. In essence, that's what this staff person is doing: cultivating individuals who are willing to solicit on behalf of the charity.

JH: Many folks have talked about the "long tail of Facebook fundraising," i.e., the fact that contrary to the popular belief in the democratizing power of social media, fundraising on Facebook is still a drop in the bucket for the smallest charities. What do you think about this phenomenon?

GL: Facebook is just the tip of the iceberg. All of the major social networks are easy to focus on, but if you think about Facebook, it's the McDonald's of social networks. Everyone goes there at least once 
a week, but no one wants to have a date or family night there.

Like McDonald's, Facebook has everything: chat, direct messaging, update streams, photos, videos, on and on. It does none of it well. In each instance, there's another social network (Skype, Twitter, Flickr, YouTube) that does these individual things better than Facebook.

In contrast, consider TuDiabetes (tudiabetes.org), which uses the big social networks as beachheads to fuel its topic-specific social network of more than 10,000 people. These 10,000 people all have their own social networks, making the TuDiabetes 
network a brilliant use of all the social tools to fuel a cause. They get that the majors are just the tip of 
the iceberg.

Consider what happens when TuDiabetes makes an ask of its die-hard network and how that can spill out into the larger social Web. I can envision Obama-campaign-like ripples. (For an in-depth examination of the TuDiabetes.org Web site, see Sarah Durham's Brandraising column at tinyurl.com/y4cd9zm)

JH: Similar to raising money for memorial gifts in traditional fundraising, raising money for special events like anniversaries and birthdays seems to be working for some nonprofits. Can you expand on this theme?

GL: This is an intelligent use of social media for fundraising. It plays to two core aspects of social media that most charities fail to realize when they try to fundraise with these tools.

1. Relationships: If it's just you on Twitter, Causes, etc., your network is going to yield very few donations in the long run. The people within your network make for the best agents of both change and fundraising. They have real relationships with their social networks, whether they are 200, 2,000 or 20,000 strong. An ask from them for a birthday or an event means something within that network. Enlist and empower them to make the ask instead of you.

2. Long tail: Alone, most charities get frustrated with the limited fundraising power of their Twitter/Facebook/blog reach. By creating a real program that harnesses hundreds of fundraising volunteers who can bring in $200 to $2,000 per birthday or event, you've suddenly replicated the mastery of Amazon and Twestival.

This is the long tail, where you assume that collectively many small impacts can make a large statement. A successful grassroots campaign allows you to create mass fundraising totals via many microdonations. Consider that the Lance Armstrong Foundation is on pace to raise well over a million dollars via its grassroots platform this year (tinyurl.com/y36krmx).

JH: We can't leave this interview without a discussion of the many social-media contests being run by huge consumer brands that invite nonprofits to compete for funds via social media. These contests include Pepsi Refresh, Chase Community Giving, America's Giving Challenge, the Members Project from American Express and more.

What to do you think of these contests? Are they a viable revenue stream for nonprofits, and should charitable organizations invest the time and energy in competing for these funds?

GL: Frankly, not much. I am really thrilled that companies are getting more involved in cause-based activity, and they should. They are active members of society, and they bring both positive (jobs, etc.) and negative (pollution, etc.) contributions to society. Participating as a member of the community is the right thing to do.

The contests, crowdsourcing social good, often strike me as rudderless. Pepsi is a great example. Consider how they are investing in America by letting the crowd decide which charities matter most (tinyurl.com/y7jzpnz). To me, this leaves a lot to be expected of the crowd, especially given how wrong crowds can go, as evidenced by MIT Media Lab crowdsourcing research as encapsulated in the book, "Honest Signals" (tinyurl.com/5omnaq).

While Pepsi may have won the crowd with its gladiator-esque Super Bowl moves, I don't see a theory of change. How can we measure impact? And frankly, I don't see how this matches Pepsi's culture other than they want to be everything to everyone. But is that what Pepsi really stands for?

Companies like Pepsi are innovating, and they need to be congratulated for new steps in cause marketing. At the same time, evolution dictates more than a contest. We need change that's measurable and purposeful.

JH: Anything else you'd like to share about using social media?

GL: Like any kind of fundraising, you need a relationship for this to really work. If you use social media to simply ask for money, you will have an empty wallet.

But if you cultivate relationships and build a community of friends or followers, there will be a larger purse. You will be so much richer for it. Because you will have friends, allies, ambassadors and so many intangible benefits, you will be grateful for the day you started having conversations instead of asking for dollars all the time.

*Jocelyn Harmon is the Director of Nonprofit Services for Care2.

*Originally published on http://www.fundraisingsuccessmag.com

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Comments

[Cara Breeden]

I think that fundraising on social media will become more successful as nonprofits build their communities and new tools tailored to fundraising are released. It can be difficult for a nonprofit to allocate funds to social media when they aren't getting much (if any) return. This "free" media is not really free when you consider the hours of work it takes to do it right. However, organizations like The Humane Society are excellent examples of successful integration of social media into fundraising campaigns. I look forward to discovering what the future holds!

[Marcella Chamorro]

I think Geoff is definitely right in that companies who are pursuing cause contests should be congratulated for the effort, but they should also be pushed in the direction that most non-profit organizations are now moving, which is more measurement and deeper impact. Cause contests are not likely to disappear altogether, but it would be best for them to improve over time to include and meet the requirements that are now being asked of charities around the world.

[Vinay Bhagat]

The three questions to ask are:


1) How do we source/ first connect with new donors, and what role does/can social media play

2) How effective is social media as an engagement/ stewardship/ cultivation channel

3) How effective is social media for transactions and solicitation

(1) I understand that groups like the Humane Society are finding that social media including Facebook can be a strong and economic source of new names. Those names just like names from Care2 or other sources need to be put through a tailored cultivation process. I’d love to hear other success stories/ anecdotes of Facebook originated prospect development efforts. As we learned in our research Next Generation of American Giving research jointly conducted with SeaChange and Edge Research, younger donors are more likely to have first come in contact with their top charity through media exposure or peer influence vs. direct mail.

(2) A few of our clients have seen a lift in donor value if they are also engaged through social media, but I’m not aware of any kind of split cell test that establish cause/effect. Gut instinct however says that if you engage someone through more channels, especially channels they spend a lot of time in, value is enhanced – as long as your content is compelling.

(3) The least relevant of the 3 questions, but again, our research data suggested that Gen X and Y deem solicitation via social networks as acceptable, so I believe it will be part of the mix in the future. Our APIs support the creation of donation and advocacy pages within Facebook now, so it’s technically feasible without having to use a 3rd party system like Causes.

[Melissa Brown]

Thanks for the comparison to national data in Giving USA, which I edit. Social media, like online fundraising generally, is a new medium that needs to be integrated with all fundraising approaches, just as other commentors have noted. Research suggests, though, that donors who give first online are likely to renew through other channels. I liken social media to the "end cap" attractions in a super market. A donor might be moved by an impulse (or loyalty to a friend) to give the first time - like trying a new product offered in a store -- but that donor needs positive experience with the organization, knowledge of its benefits, and some positive results for him or herself to build the loyalty that leads to a renewed gift.

[Jos Myers]

I think there is a misconception among small groups that you make a facebook page, open a twitter account, start a webpage and you should magically start getting money. I don't think many small groups understand the work that goes into social media marketing. There are e-mails, blog commenting, countless hours spent searching through people and groups to network with those who would be interested in your cause...it takes nearly as much work as going door to door without the walking. I don't see it replacing traditional fundraising in the future, but I see it supplementing it. If anything, I think it is a fantastic way for the new generation to get involved. So much of "traditional" giving comes from the older generations, I see social media as a way to connect the younger generations to something they haven't historically been as involved in.

[Brenda Johnson]

I agree that the majority of an organization's funding will generally not come from social networking sites, but I also feel having that presence can certainly help generate increased interest in your cause and even increase your volunteer resources. Also I have seen it work wonders providing exposure for small local organizations. Fundraising, however, is a people and relationship business, and social networking will never replace that dynamic.

[Jessica Dally]

It always seems to me that the people who scream snake oil the loudest are the ones that don't understand it. While every org has to work hard to get any donation from a foundation or funder for some reason they expect to simply put their name on facebook and get money immediately (not everyone, but far too many). ANY fundraising requires you contribute something TO the person or foundation from whom you're hoping to receive funds. That's the nature of interaction.

In the case of social media the contribution a nonprofit makes is to tell their story, to make people care and not just in the "see us regurgitate our website on facebook" but in creating content that appeals to people's sense of compassion and caring. We expect to give stats and tell our story to a foundation. Why would we expect less of people.

Most importantly however is that you aren't going to find your next champion sending in an appeal. You can (and will) if you manage your social media streams in a way that makes people care. And if you TRULY believe that what you're doing matters it should be easy to show that energy to others.

Personally I spend at least a little time attending webinars and learning from others what has worked for them. Not only does it help me think of new ways to tell my story but often I can learn about a new way to work that also saves me time.

There's a lot at TechSoup's learning center that helps learn how to use these tools instead of just setting up a site and hoping it collects funds (which is a bad way to run a website too!) http://www.techsoup.org/learningcenter/webinars/index.cfm