Facebook had a bad first full week as a publicly listed company.  To many people’s surprise, their stock dropped to $31 after opening at $38.  If that disappointing start wasn’t bad enough, they’re now being sued by investors.  So what lessons can the nonprofit sector takeaway from this? To put it briefly, while social media sites like Facebook are certainly valuable for organizations in many ways, the commercial/fundraising value of social media is overhyped and overinflated.

Let me expand upon that.  Recently the Nonprofit Technology Network (NTEN), Common Knowledge and Blackbaud published the Nonprofit Social Network Benchmark Report for 2012. One of the important findings of this report was the tremendous growth of some social media tools (Facebook and Twitter) and the flatlining or decline of others (LinkedIn, Foursquare, Myspace) – as shown in the graph below:

Another interesting finding in this report was attaching an actual monetary cost to social media acquisition.  The average for the nonprofits surveyed was $3.50 for a Facebook like and $2.05 for a Twitter follower.  This study also puts a the average 12 month value of a Facebook supporter at $214.81.  So that means each new Facebook like produced an incredible ROI of 61:1!   However, I find that a bit hard to believe because, as this study also points out, social media networks are generally bad for fundraising – i.e. they generate very little revenue.  So how did they come up with this 61:1 ROI figure?  It’s not entirely clear, although the survey results in the appendix do shed some light: 63% of respondents say they’re measuring social media ROI through soft benefit only, and another 32% say they’re not measuring ROI at all….with only 5% actually using financial ROI measurements.  So that tells me this 61:1 ROI Facebook figure should be taken with a large grain of salt.

So how much money do charities actually raise on social media?  This table from the report is pretty revealing:

Okay, the nonprofit sector (and some would argue for profit sector as well, which is why the IPO didn’t go so well) hasn’t cracked the monitizing-social-media nut yet.  But with almost 100% of nonprofits having some kind of social media presence, there must be some benefit right?  Certainly!  Only about 50% of charities use sites like Facebook and Twitter for fundraising.  Most prefer to see it as a marketing and communication tools. So, to achieve ‘soft benefit’ objectives like raising awareness, brand strengthening and building community.  There are also soft fundraising benefits to having a social media presence, since many donors will connect to your charity’s Facebook or Twitter pages, but give through other channels.  As research from Blackbaud and elsewhere has demonstrated, multi-channel donors have the highest value.

So, I’ll qualify my statement at the beginning by saying that Facebook and other social media sites are overhyped and overvalued as fundraising tools.  In that sense, I really don’t see the point of charities investing heavily in social media fundraising, and most efforts in this field have done pretty poorly.  But Facebook will continue to be a place supporters and other contacts will interact with your nonprofit and get involved in other ways.

The sixth annual eNonprofit Benchmark Study from M+R Strategic Services and the Nonprofit Technology Network (NTEN) will be released on April 5th. This research with 44 non-profits from different sectors looks at how charities are using digital tools for fundraising, advocacy, communications, social media, etc.  We have to wait a couple weeks for the study, but some of the main findings are available in an inforgraphic.

You can see the findings below for yourself, but it’s worth drawing attention to the growth and high response/open/click-through rates of advocacy emails. Supporters like to do more than just give.  They want to see a more direct link between their support and impact, which advocacy communications help to do.

It’s also interesting to note that two thirds of online donations come from places other than email.  This is consistent with the growth of social media and user-generated/third party content. Online giving is about more than just putting out an ask that people respond to (i.e. one way communications) – it’s about inspiring and empowering others to help spread your message and fundraise on your behalf.

Now to the infographic:

Just a quick post today to risk adding more noise to a saturated discussion: the viral Koney 2012 video from non-profit Invisible Children.  This 30min video seeks to raise awareness of and call for the arrest of Joseph Kony, head of the Lord’s Resistance Army (LRA) in Uganda. This video has gone viral like no other – attracting over 70 million views at the time of this writing and over 600,000 comments (most are nonsense).  All this in less than a week.

This video has spread like wildfire and now is of course attracting all sorts of attention from people who want to understand how a video like this (30mins and from a non-profit!) could be so successful.  Many of the commentaries have also criticized the video for inaccuracies and Invisible Children for lack of transparency. Here’s a good article on that subject and why the video might actually be a good thing for larger and longer-term policy discussions (plus some caveats).

But what about this video in the context of fundraising and promoting a cause? Getting this much attention for something that isn’t a new product release or music video is probably a good thing.  Plus it brings real debate, funding and (hopefully) action to something that has failed to attract public attention for a long time.  Celebrities, critiques of Invisible Children and social media aside, this video is a great way to get a broad base of society (especially young people) involved in a charitable cause.  But, in case you haven’t seen it, here’s the video so you can judge for yourself:

How can charities grow their number of supporters and advocates with a small budget and limited number of staff?  Get others to do it for them.  This is the idea behind using volunteers or ambassadors to spread the messages and get others on board.  Non-profits can amplify their reach and support by educating and empowering their closest allies. But how?

Identify influencers

Take a look at your supporters to identify those who have the most influence into other networks (business, wealthy individuals, schools, general public, etc).  These influencers might be donors, board members, volunteers, social media contacts, or even staff.  Draw up a list of those that can help you reach new people/goals.

Define an objective

What are you asking your ambassadors and community to do?  Encourage others to donate?  Raise awareness?  Ensure that people understand what the goal is for the work that they will be doing for you.

Educate and support

Okay, it’s well and good that you have your influencers identified and empowered with a goal, but they also need to uphold the integrity of your work and brand.  That means having key messages, materials, logos, etc.  I’ve seen lots of bad homemade materials because charities have neglected to provide their volunteers with the tools needed to do the job.  This can taint the brand and have negative consequences.  This is easily preventable with a kit for ambassadors.

Make use of social media

Social media tools like Twitter and Facebook can be powerful mechanisms for empowering others to spread your charity’s messages with ease.  Those that follow or like you on social media participate in a common interest that is your non-profit’s work.  So encourage them to be promoters of your charity.

Using volunteers to spread your message and get others on board is an effective way of maximizing your charity’s budget and resources.

Last week a deadline passed that was imposed by the president of Ecuador, Rafael Correa, for saving 722 square miles of rainforest.  Correa set the deadline back in 2007 when he faced a dilemma: allow oil drilling in the rainforest to pocket a potential $7.2 billion or forgo the potential money and protect some of the world’s most biodiverse forest?  Correa decided that he would prevent oil drilling, but only if half the potential oil drilling money ($3.6 billion) could be raised.  The first milestone was to raise $100 million by December 30th, 2011.

The attention this proposal got online and in the media resulted in an outpouring of support from governments, businesses and individuals (including Al Gore and Leonardo DiCaprio).  This “crowdfunding” initiative has so far raised $116 million, which is enough to temporary halt oil drilling.

This Ecuadorian case is just one example of an unconventional type of financing called crowdfunding.  It is a way for a group of people to come together to support a particular project or idea, and applies to government, business and non-profit sectors.  It is especially relevant to small businesses, musicians, and others who struggle to attract conventional financing from banks and venture capitalists.  Here is a list of 8 crowdfunding websites that can help businesses with funding.

But crowdfunding is also something charities have been doing for many years and can continue to use as a tool for fundraising.  My favourite example of crowdfunding, and really creative idea, is Kiva – where people can choose from hundreds of small business owners in developing countries and loan them part or all of the money they need.  Another good example of bringing funders and charity projects together is The Big Give in the UK.  Charities post their projects that need funding and potential donors can browse projects by cause and location.

For those charities that have a project idea but struggle to find conventional funding (e.g. from a foundation, government, business, etc), crowdfunding may be the answer.  Sites like The Big Give are one option.  But for charities that have a bigger budget and/or online supporter base, creating a bespoke campaign could be more effective.

There’s nothing all that revolutionary about a crowdfunding campaign over and above a normal campaign, but allowing people to come together to support a particular project is something unique about online fundraising.  Especially when there is a particular goal in site that people feel compelled to get behind – like protecting the rainforest in Ecuador.

With most charities, you have your fundraising department, your program departments, and your communications department.  The communications department is usually responsible for, well, communications.  And this includes everything from annual reports to marketing materials to branding.  It also often includes anything to do with the press: radio/tv interviews, press releases, etc.  But press materials being the sole responsibility of the communications department means the content put out is often flat.

source: NS Newsflash

This a big mistake.  The press can be a charity’s best friend and has the ability to do something all charities want: create more awareness.  With greater awareness of issues comes a stronger mandate for change (among the general public and politicians) and a larger outpouring of donations. This benefits all areas of a charity – especially its beneficiaries!

But in oder to achieve greater attention from the press – and thereby the general public – nonprofits need to involve other department in their communications.  Here is an example of the roles different parts of a charity can play:

Programs: the people on the project teams are the bread and butter of a charity and its raison d’être.  They are the people who know the “core” elements of the work the best and so are in the ideal position to be writing/speaking about what’s happening on the ground.  In my experience, they are the most passionate and knowledgable about the work.  So, have program staff regularly involved in external communications, since these are the people most stakeholders want to hear from.

Fundraising: if program staff are the experts on the need for the work and the charity’s unique response, then fundraising staff are the experts on the call to action.  Namely, donate!  Press attention naturally lends itself to a implicit or explicit ask for support.  It’s no wonder that most newspapers run large-scale charity appeals every winter. Fundraisers need to capitalize on the opportunities greater press attention gives them.

Communications: the communications department has a central role when dealing with the press and external stakeholders, but it should have to do with overseeing what goes out rather than writing all the content and doing everything from conception to completion.  They are critical in ensuring brand consistency, tone, relations with editors, etc.  But the most important content will often come from the program and fundraising departments.

Below is an interesting infographic from Craig Newmark, the founder of craigslist.  He set out to answer questions like ‘Do the highest earning nonprofits use social media the most effectively?’ and ‘How are people responding and interacting?’ The results of questions like these were put into an infographic.

As Craig states in his own commentary on this data, quality is better than quantity – both in terms of audience and budget.  For example, YMCA of America has the highest income but one of the lowest number of Twitter followers, while PBS, which is near the bottom of the list in income, is putting up some of the highest numbers for followers and engagement.

So, while nearly every large charity is active on one or more social media channels, simply ‘being there’ is not enough. Social media is a two way conversation with audiences, and the biggest nonprofits aren’t necessarily the best at engaging stakeholders.

A clear and compelling case for support is essential for motivating people to give to your cause.  But unfortunately fundraising communications can often be filled with confusing jargon, stats, and ideas.  So, here are tips for three key areas nonprofits can improve on funder communications.

source: Nic's event

Eliminate jargon

Make it easy for donors to understand the issues you are talking about.  In plain language, what is the need, why is your charity best-palced to respond and why should the donor support you?  Answer these questions clearly and you will stand a much better chance of securing their donation.  Major donors are approached with requests for support often on a daily basis – if something is confusing, they are unlike to continue reading.

Make stats and numbers understandable

This follows from the point above, but has to do specifically with making numbers easy to understand.  The human mind has a limited capacity for comprehending anything more than small numbers.  So, statements like “5 million of x” or “300,000 of y” often fail to have the impact charities expect them to.  We just can’t fathom what 5 million of something is in practical terms.  Instead, relate numbers to something people can understand.  For example, instead of saying something like ‘We help over 500,000 people’ try putting it as ‘We help someone every minute of every day’ or ‘We help more people each year than the population of x’.  Think creatively about how to reframe numbers.

Make it flow

Eliminating jargon and making numbers comprehensible are essential steps to making donor understand what you are asking them.  But it’s also vital that communications flow in a natural and cohesive manner.  Does your proposal jump around from one idea to the next or does it tell a story that easily transitions from one section to the next?  My preferred format (along with many others) is generally: background, need, response, objectives, activities, budget/ask.