« This is What Nonprofits Need More Than a Facebook Donate Button | Main | Study: 88% of Children Donate to Charity »
Monday
Dec162013

Facebook's New Donate Button: Good or Bad for Nonprofits?

The nonprofit world was buzzing today over the announcement of Facebook rolling out Donate buttons to nonprofit organizations on pages and posts. This will be similar to the Facebook Gifts button that they have been testing with about a dozen nonprofit partners for the past year.

The big question on every nonprofit organizations' mind is, will this Donate button help their charity raise a decent amount of money? From all the donor data I have seen on Facebook, the answer is NO! I predict that the majority of nonprofit organizations won’t raise very much money on Facebook unless your organization’s mission is to protect cute wildlife and animals, or works on disaster relief during a disaster. Here’s why:

People Don’t Use Facebook to Donate Money

People use Facebook to share stories, photos, and videos with friends. They comment on posts and like status updates. It’s a social space to be, you guessed it - social. Giving money is not a very social activity on Facebook. And when it comes to nonprofits, your supporters want to be engaged and feel like they are helping you to achieve your mission. There is a time and a place for giving money, and Facebook is not really that place. BTW, you should check out the Nonprofit Social Networking Benchmark Report, which historically shows that the majority of nonprofits have not raised a dime on Facebook. And remember the days of Causes on Facebook where many nonprofits struggled to raise money?

Facebook’s User Experience is Not Focused on Donation Conversions

There is a lot of design and user experience strategy that goes into raising money online. That’s why nonprofits spend a lot of time and resources on designing donation pages that focus on conversion rates. While it’s nice to see Facebook being charitable, having a little Donate button mixed in with all of their other features vying for users attention will negatively impact conversion rates.

Donations are not a priority for Facebook. What is a priority for Facebook is Wall Street, ad revenue, and paid partnerships. Facebook’s cluttered design has never been a good user experience, but nonprofits have muddled through it. After spending a few years building a community, now nonprofits are experiencing a decrease in organic reach as Facebook changes its algorithm to focus on paid content. Perhaps, in the future, Facebook will offer nonprofits paid options to better highlight the Donate button. However, the poor donation user experience still remains a large issue. 

No Access to Donor Data

Facebook does not plan on permitting donors to opt-in to have their information shared with nonprofits. Donors are the lifelines to nonprofits, yet nonprofits will not receive donors’ names, email, or other important contact information to continue cultivating these important people. This is problematic says Rob Manix, Senior Web Director of Rad Campaign and who works with me. "Many nonprofits dedicate considerable resources to track supporter’s multi channel donations and activities. Donor history is integral to strategically targeting advocates with relevant campaigns, avoiding donor fatigue, and stretching limited resources. Without this data the potential for multiple solicitations and angry supporters, is inevitable."

Why is Facebook doing this? They want all relationships to stay on Facebook.

It’s also not clear if nonprofits will be able to tell if donors “Liked” their page.

However, since Facebook is prioritizing revenue over community these days, I suspect they will offer paid options in the future for nonprofits to receive opt-in donor information.

If your nonprofit is interested in testing out the Facebook's new Donate feature, you can apply to be part of their program. However, my advice is not to get too excited about the this new feature. Experiment with the Donate button a bit, but do not turn your Facebook page into an ATM platform or your community will disengage.

Reader Comments (7)

I love the face palm. :-)
December 17, 2013 | Unregistered CommenterJohn Haydon
I disagree with donations not being social. For one thing, you can now donate to your nonprofit of choice and then SHARE that action with your friends. That is social. People see their friends are donating and that will make them want to share too.
December 17, 2013 | Unregistered CommenterJames
Another huge issue is that at the same time Facebook is rolling this out, they've restricted pages' ability to show up in people's news feeds unless they pay for the privilege.

http://www.ignitesocialmedia.com/facebook-marketing/facebook-brand-pages-suffer-44-decline-reach-since-december-1/

I'm a fan of WWF and ASPCA, two of the currently participating nonprofits, and none of the FB posts they've posted today showed up in my feed. So unless I actively went to their page, I wouldn't have seen the button.
December 17, 2013 | Unregistered CommenterElizabeth Kricfalusi
Do you remember Causes? It was among the first Facebook applications and existed as a nonprofit marketplace, linking people with campaigns and donations. It ultimately branched into causes.com; and this Donate feature reminds me of a reincarnated Causes.

It's more hilarious that F is limiting the organizations involved in the pilot. I'd be surprised if it's around in 6 months.
December 18, 2013 | Unregistered CommenterAri Herzog
Spot on!

From the cluttered interface to the "what'll they do next" factor (never a good thing when you're trying to get your folks to give), to their need to keep shareholders happy, I'm happy to wait and see how this works out.

Also, for all our socialbility as a species, I know far too many people (and this is true for many of my clients' donors) who aren't social about their giving. They're giving to be generous, and they're oftentimes quite private about it. They'll be social about sharing a cause. But that isn't the same as being social about their contributions. Unless it's a Ted Turner billion dollar type giveaway - and that's not about to happen on Facebook.

And perhaps its me, but I can't help thinking of how after every rollout, people have to relearn some basics on Facebook, like where their messages are. There's a reason the majority of us still keep our money in boring banks and credit unions, where the basics haven't changed.
December 18, 2013 | Unregistered Commentersohini
The truth is that some non-profits will figure out how to make this new function work well for them and some won't. But that is always true (there are many non-profits who still haven't figured out email).

The broad blanket statements - though - do no one any good. "People Don’t Use Facebook to Donate Money"? Nonsense.

I can't think of any non-profit who shouldn't be using social media as part of their communication strategy. And part of that communication strategy will ALWAYS be about fundraising.

A nonprofit would prefer to have the donor contact info, sure. But if they are using Facebook right they don't absolutely need it.
December 20, 2013 | Unregistered CommenterVIncent Vizachero
Making donations easily on Facebook is great, but you absolutely hit the nail on the head that this is going to be bad for 99% of non profits (the ones without cuddly animals or affected by disaster).

The inability to cultivate donors decreases the lifetime values of these donors by almost exactly two thirds! (68%)!!!

I.E., a person gives on Facebook $100. (Notice this is already less than the average online gift of $125). Since there is no way to change the amount, $100 is likely the logical choice.
The charity receives 100% of the revenue (which is great, no transaction fees). But that's it. They can't cultivate the donor.
Total lifetime value from the donor = $100.

Now consider a non profit uses a website instead. Let's say that we also lose 20% of our donors and there is a transaction fee of 5% (which is really high, so we are being conservative).
However, the average gift is much higher, or $125. So we take $125*.80*.95 and now it's worth $95.00.

BUT....

We now have the donor's information and can cultivate him/her. Since the average annual retention rate is 40%, we can expect this donor to last 2.5 years, giving $125 each year, or a total lifetime value of $312.50

So, which is better? $100 from Facebook with no donor information or $312.50 over 2.5 years?

The answer is that this is HORRIBLE for nonprofits. I am surprised that the 19 nonprofits are even trying this. They should know better.

This is going to end up just like the text-giving fiasco of several years ago. Nonprofits spent millions trying to attract text donations, only to see these 'new donors' completely cannibalize their donorbase for the very same reasons- you need the personal information.
December 24, 2013 | Unregistered CommenterJon Biedermann

PostPost a New Comment

Enter your information below to add a new comment.
Author Email (optional):
Author URL (optional):
Post:
 
All HTML will be escaped. Hyperlinks will be created for URLs automatically.