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Sunday
Apr012012

"Lies, Damned Lies" and Nonprofit KPIs

For years nonprofits have been struggling to measure their own digital analytics. Then along came social media and they had just as hard a time as anyone else in the commercial sector at figuring out how to measure the effectiveness of social media. A lot of nonprofits measure their social media with Key Performance Indicators (KPIs) that don't measure bottom line results, but merely activity in social media.  

They measure "Likes" or "Retweets" or "Fans" and argue that is a proxy for measuring something that actually keeps the lights on at their nonprofit.  Every nonprofit already knows what the most important KPI is, it's called money.  Money makes it possible for them to change the world.

If you still want to argue that "Likes" and Retweets are a satisfactory proxy for measuring money, here are two examples that reduce this assertion to the absurd.

If you measure social media activity as if it was a proxy for money, how about I pay you in Likes?
Take a look at this paycheck. It's in Likes, not dollars.


Go into your bosses office and ask her, "Can I get paid in "Likes" instead of dollars?  Because we're measuring this kind of social media activity instead of actually measuring social-media-driven dollars, and I figure that's the same."  I'm sure they'll be laughing until they realize how seriously off-kilter measuring "Likes" is.

Social media activity isn't always good news
Recently radio program This American Life broadcast Mike Daisey’s piece about going to the Foxconn factory in China where Apple’s products are made, meeting the workers, and learning of their horrific working conditions.  Sadly, it appears to have been embellished and This American Life just retracted the story.   Then Mike Daisey issued a Rush Limbaugh-style apology:

I regret that I allowed THIS AMERICAN LIFE to air an excerpt from my monologue. THIS AMERICAN LIFE is essentially a journalistic ­- not a theatrical ­- enterprise, and as such it operates under a different set of rules and expectations.

In the wake of this non-apology apology, I happened to notice that Mike Daisey has 569 fans, and 159 people are talking about his topic on Facebook.  If


159 people are talking about Mike Daisey. Riches and fame will soon be his with that kind of social media activity, right?

you were measuring his work using “Activity-based metrics” in social media like People Talking About, or Conversation, or even Amplification (how many people share), you’d probably think he was doing great.

He's not.  This American Life cancelled one of his shows.  Now he will have less money, and his reputation is in tatters.

What you should really measure, and why it's so damn hard to do
Clearly, I think you should be measuring money.  But speak to any digital analytics guru and they'll tell you that very few people that come to your site from Facebook actually come over and give a donation.   If thousands of nonprofits were having such an easy time making money from social media, you wouldn't see so many struggling to figure out how to measure it and justify the return on investment.

If you truly want to measure social media's relationship to your bottom line, you should be measuring:

  • Donations given within the social media environment. On FB, you can measure gifts given through Causes or an FB native form hosted on your fan page; or
  • Donations given that were a direct click-result of something on FB or twitter (or YouTube, etc).
  • Donations given that were preceded by visits driven from social media in the previous 30 days.

This last technique was previously difficult, but it's now possible with a recent feature of Google Analytics, "Multi-channel funnels".  With multi channel funnels, you can actually see all the marketing techniques that contributed to that particular user's interaction right up until they gave you that $50.  

For example, if a prospective donor visited your website 4 times from social media driven stories, and then clicked on an email link to finally give, your social media channels will take 80% of the credit for that gift, and your email will take 20%.  Google Analytics even does the math for you, and computes $30 of credit for the social media channel.

The potential for nonprofits to finally allocate reasonable credit to social media and measure its effectiveness is now here, and with even more recent innovations coming from Google in the form of the new Google Analytics Social Media Reports it should get even better.

Shabbir J. Imber Safdar is a serious data nerd and an analyst certified by the Digital Analytics Association.  His nonprofit analytics consultancy, The Safdar Group, is really starting to cut into his archery and poker hobby time.

Reader Comments (4)

I don't think tracking Likes and other non-financial activity is a bad thing - the key is to track metrics that are important to your goals and strategy, and track the entire pathway (as you mention) moving supporters from small, easy activities to the big, important ones.

We advise looking at donated dollars per unit of activity (or usually donated dollars per unique visitor in GA), and also donations per unit of staff time. Still, those aren't the whole picture and it helps to look at total value of a supporter, in volunteering, donations, and everything else, over a longer time span.

Also, those are some fabulous Google Analytics tips!
April 1, 2012 | Unregistered CommenterEhren Foss
The new Google Analytics tools are incredibly powerful, but someone has to use them, figure out what it all means, and then make decisions or recommendations based on the data. Smaller nonprofits may want to consider outsourcing this kind of analysis. The average nonprofit volunteer probably doesn't have a background in data analysis unless the organization gets lucky. A consultant should be able to build a Google Analytics dashboard once and have reports automatically sent to key stakeholders in the organization. So it could be a one-time set-up fee thanks to Google Analytics releasing the beta version of its scheduled emails for the new interface.

I think you hit on something important and that is to figure out the KPIs for social media before launching. Very real conversations should take place about realistic expectations for performance and how it will translate into dollars.

I think social media falls under the donor stewardship category of the donor cultivation cycle rather than a direct ask. At least that seems to be the case for philanthropic donors. Charitable giving is different and organizations might see more of a direct ROI for social media efforts.

Thanks for this article. It is very helpful and I appreciate your candor.
Michelle,

You're absolutely right, of course. Even when you're the size of UNICEF-USA or the Humane Society, you probably don't have the skills in house to pull real analysis off. The mindset of someone who can do this, combined with the broad knowledge of online marketing, the ability to follow questions to their non-prejudiced conclusion, and a statistical background is incredibly hard to find.

Combine that with a need to often "speak truth to power" and you're unlikely to find that person and let them operate successfully in-house in a small, medium, or even large non-profit. I don't have a really good answer to the problem, but I hope more data analysts choose to focus on nonprofit work (and not commercial work) to improve the state of non-profit fundraising.
April 1, 2012 | Unregistered CommenterShabbir Safdar
I don't agree with the notion that data analysis should be outsourced. While not a nonprofit, we're a small organization able to track around 10 KPIs twice a month with about an hour of work. It really helps to be hands-on and rapidly turn the numbers into simple, actionable tasks to improve them. Once the data and analysis get more complex, after you've confirmed some basic assumptions and high level strategy, then (I think) it helps to have someone do the number crunching if nobody on staff has the training or time.

I do agree that social media is a stewardship type activity, but donation asks can (and should) be made on social media to the right groups in appropriate ways.
April 2, 2012 | Unregistered CommenterEhren Foss

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