Social Nets: Fundraising Snake Oil?
Two days ago, I urged Agitator readers to check out this report on Engagement, which proffers evidence that the most financially successful commercial brands are also the most adroit users of online social media. And I suggested that this same relationship might hold for nonprofits.
I love a good argument!
Reader Stephen Best of direct marketing agency Keys Direct threw a powerful left hook at that thesis. He says: Spend ZERO on Facebook et al. Here is his full comment:
"Of course, the question is which came first: the brand recognition, the $$$, and then social media or social media, brand recognition, then $$$? I think the former.
The notion that social media is making these companies financial powerhouses is, likely, silly. Most of their financial success is due to good products, traditional marketing, and long-term–pre-social media–brand recognition. This report is post hoc fallacy at its worst.
Here’s a thought. If a non-profit had $500,000 to spend on acquiring new supporters, how much would an experienced, prudent fundraiser allocate to various media including new, new social media? I suggest $25,000 to make sure the website would serve as a good response device, and $475,000 in mail, phone, and earned media. Amount to Facebook et al, $0.
In fact, if you want the best return on investment with $500,000, put the money into reactivating lapsed donors and upgrading current ones, if that has not already been maximized.
For most organizations, social media is fundraising snake oil."
Those are fightin’ words to true believers in social nets!
Coincidentally, next day I noticed this article, Is Your Boss Facebook-phobic? by true believer Katya Andresen of Network for Good, writing in Fundraising Success. Katya offers a seven-point argument to sell your powers-that-be on the use of social media. By the time she gets to point #6, I think she’s put the matter in proper perspective …
"If you’re going to start an initiative, make it a small one with clear goals. What are you going to do, and how will you measure success? That second question — the end goal — is essential to answer at the start. Make sure you and your boss are on the same page with the goal, because "raise money" vs. "build awareness" vs. "grow our community" all have very different measures of success. The other advantage of starting clear and small is you’ll avoid spending excessive amounts of time or resources on your project, thus enhancing its ROI."
Personally, I think that current use of social nets should be about building relationships with donors rather than soliciting contributions. Stronger relationships will ultimately yield greater lifetime value and more evangelism, which adds to the direct value.
So I agree with Katya about starting small and being very clear about the goal, which probably shouldn’t be set in direct fundraising terms. I agree with Stephen regarding the thrust of his $500,000 spend, but I would spend modestly on social net experimentation … say 5% of that budget.
Anybody else care to weigh in? What percent would you allocate?
Tom
4 responses to “Social Nets: Fundraising Snake Oil?”
Behavioral Science Q & A
Integrating an individual giving appeal with other communications from a charity can have both positive and negative effects, and the outcome largely depends on how it’s executed. Advantages of Integration Brand Consistency: Maintaining a consistent appearance and messaging across all communications can reinforce the org’s brand identity and strengthen brand recognition and trust among your […]
Read Full Answer
I’m not aware of any in-market tests specifically comparing recurring vs. gift frequency language. I suspect the answer might not be the same with all gift frequencies, nor with all people. It sounds like a great opportunity for you to test and find out what works for your audience. Based on the literature, here’s a couple […]
Read Full Answer
Based on what we know from existing data, those renewal notices can actually be pretty effective in getting people to donate. They tap into our psychology – creating a sense of urgency, reminding us of past support, and using personalization to make the message hit home. They’re playing on our natural tendencies to feel obligated […]
Read Full Answer
Interesting question. I had a quick look at the testing done on this topic. On the positive side, in all cases, over half of donors decide to cover the fee. In some cases, it goes as high as 65%. Not a negligible percentage at all. Here’s another test from iRaiser showing consistent results (see point […]
Read Full Answer
There’s just one thing to consider when designing a supporter journey: the supporter. More specifically, you need to take into account: Who the supporter is i.e. their identity, which is the reason they support this cause, and their personality, which describes the way they “see” and process the world. These will determine the kind of […]
Read Full Answer
I’m not an expert in this but a quick search surfaced this article on the effect of tax reforms on 2019’s charitable giving. The researchers didn’t find a reduction. Actually, they observed an “increase in charitable contributions in 2019, even with the lower tax rates and the dramatically smaller number of taxpayers who itemize their […]
Read Full Answer
There’s a saying in the UK – ‘horses for courses’ and I think this very much applies here.
The answer is to spend the money on what fits best with your current audience. If you’re a long established nonprofit, with a large, traditional donorbase (I’m thinking elderly, middle class, white, woman) then you will get the best results from using the medium that has always worked best with this group – namely direct mail and i’d spend the money on upgrade/re-activation/phone etc.
On the other hand, if I was an new non-profit who is only active on the web (such as Kiva) then of course i’d be investing much more heavily in social media.
The answer has got to be you spend money depending on what works best for your audience. There are no magic formulas and correct answers.
Direct mail is going nowhere soon, but the next generation of donors will increasingly want (and expect) to be able to connect, interact and engage with their favourite nonprofit through social media.
Those charities who aren’t doing this will find it hard to play catch up and risk losing it out to more tech savvy newcomers.
Social media certainly isn’t ‘snake-oil’ but it isn’t a panacea either.
There is no doubt that the best course is to spend money where it gets the best results, but zero to social networking? Hmmm… Zero as in advertising dollars, probably yes. But…
There are several providers of social networking applications that utilize the best of that tool to mobilize and energize supporters and get them talking to both the organization and each other. Some leverage FB, Twitter, et al. as well.
Unfortunately, the cost of these tools — $20,000 per year and up — is way out of reach for small and medium nonprofits. Though that may be changing with word that at least one provider is working on a cost effective solution for smaller organizations.
The beauty of social networking is its ability to mobilize and activate people… And that could be why marketers love it when it works since they have instant stats to look at. On the other hand, those stats can be deceiving… our nonprofit uses our Facebook Group to let people know about educational programs. While many people click yes, and more click maybe, few IF ANY of those folks actually attend the class or even respond to follow-up communication. So, the click of a button does not mean instant $$ or bodies in a seat!
Much still to be learned.
Let me quibble with “Those charities who aren’t doing this will find it hard to play catch up and risk losing it out to more tech savvy newcomers.” This just isn’t true. Should the day come when social media is, in fact, a major influence in fundraising, an organization can be up and running in a matter of a few weeks. The technology to implement social media is very simple. Agencies, numbering in the thousands, to do it are a Google search away. For most organizations, social media is not the significant fundraising tool, social media’s promoters would have us believe.
There are apparent exceptions. Political campaigns are one of them. But even here, the main benefit of social media–in particular, a party or candidate’s website–is as a response device for earned media, candidates’ appearances, and regular campaign advertising.
Where the Internet, in my view, can be most helpful to groups is as a response device for earned media. Indeed, few groups are effectively integrating earned media, traditional advertising and their websites. Too often an organization’s executive director appears on a radio or television program to comment on an issue, and there is nothing on the group’s website to take advantage of the appearance.
Hi Stephen,
think we are going to have to agree to disagree on the following!
You’re right that you can be up and running in a few weeks and have the technology in place. However, you miss the fundamental point that social media adds long term value by increasing trust, loyalty and engagement.
You can’t do this overnight. It takes time to earn credibility.
The longer you take to start building these online relationships, the more likely another nonprofit will have beat you to it and so made it much harder for you to get the donor to switch (online) allegiances.
Completely agree with you about the lack of integration though – it’s a major issue and shouldn’t be rocket science to solve.