Topic: Social Media

Give Back Tuesday

By Melanie Cecarelli

With the holiday season upon us, how many emails, text alerts, and Facebook ads did you receive for Black Friday and Cyber Monday sales? And now there’s “Give Back Tuesday”, a way for nonprofits to maximize year end giving with donors.

On “Give Back Tuesday”, I’m struck by the number of appeals that are flooding my inbox and social media pages. I think I received as many requests on “Give Back Tuesday” as I did for all the store and online sales. Many are from friends or colleagues who perhaps sit on a particular nonprofit board or maybe have given to the organization in the past.

Does it work? Some of the organizations are brave enough to post their progress toward a goal, and there’s little to no movement for donations. One organization tried “Give Back Tuesday” when it was first introduced as a concept. Out of the hundreds of emails and posting sent to their donor and membership base, only one gift was received. Why? Because organizations are reaching out to their donors who in turn are reaching out to individuals who have little or no knowledge of them. And a short 140 byte message isn’t going to move someone to give ‘sight unseen’ to your cause.

So ask yourself, “Is the squeeze worth the juice?” Are you putting time and resources toward an appeal that isn’t yielding results?
Like most things, one organization may have tremendous success with crowdsourcing and everyone jumps into the game. As a friend once said to me, “You need to know how deep the pool is before you jump in with cement shoes”. And that goes for “Give Back Tuesday”. How big is your social media footprint? Are these individuals who are connected to your work and mission or are you just jumping into the pool without knowing your audience? And what is your strategy for keeping the one or two new donors connected to your mission.

Many organizations see “Give Back Tuesday” as a way to close the gap for their overall development fund. While it may work for some, more attention needs to be given to creating a culture of philanthropy that engages donors and prospects throughout the year. Loyal donors are going to respond to your annual appeal and the cultivation you work on throughout the year. You don’t want to wait to year end to close gaps. The time to plan for next year is now.

So, how did Give Back Tuesday work for you?

12 Useful, Well-Designed, Worth-Downloading iPhone Apps Created by Nonprofits

12 Useful, Well-Designed, Worth-Downloading iPhone Apps Created by Nonprofits.

I love what she does.

However with this post, I have a problem.

Not with the post itself, per se, but the idea that iPhone Apps for nonprofits are a valuable use of resources.

I own an iPod, and an iPad.   I can tell you, desktop is prime territory and my GB’s like gold.    I only download apps that I know I will use frequently and will rely on for regular (read daily) access.    And yes, maybe a few fun ones too, that I go to in my downtime periodically.

I don’t think I am that much different from other iTech users.

And so, the thought of downloading an app from a nonprofit doesn’t fit with how I dole out my space and memory.    I just wouldn’t find the function of clicking the app for updates that appealing.  Even the ones listed in Heather’s blog above, while they have the sex appeal, are not pragmatically useful- how many times will I need to know what the bird in front of me sounds like?   Or have an overwhelming urge to find out where in this very moment are animals being abused?   Cool to access once, twice, maybe three times, but not GB worthy.    I could simply bookmark these sites  in Safari and get the same result, maybe more, since apps tend to have a more limited function than a full site.

I guess I could see if I were a board member or staff member of a not for profit organization, I might consider an app a cool tool and something desirable in a way.    But really, for the NPO, why spend thousands on developing an app for a handful to access.    Even a couple hundred, if you are a national or international NPO, doesn’t seem like a good use of resources.

Just because you can, doesn’t mean you should.  My recommendation: Spend your money making your website mobile optimized.

I’ve been following the nonprofit sector and their discovery of technology for quite a while.    I’ve also lived the experience for over 20 years, from networked databases, to a ‘flashy’ (no pun intended) new website, to internet access for staff- all the various areas of fumbling, bumbling and discovery along the way.   In full disclosure, I am also a partner in a tech start up – Donorfull– for the nonprofit sector.   I believe Nonprofit Apps are one of those “sounded.like.a.good.idea,.cause.everyone.is.doing.it,aren’t.we.hip,but.it.really.is.limited” kind of moments.    Unless someone can come up with an exciting and convincing argument for me as to what possible benefit, goal or stimulating outcome could come of it, I’ll continue to direct and discourage my clients from wandering into this forest.

We’ll all be less ‘appy’ but ‘appy-er’ for it.

Raising money online: Fact or Fiction?

I recently read a study that indicated of the 180,000 “Causes” on Facebook, the avg funds raised through this online method for each charity, over the course of a year, was only $1000.

Really?

This seems slightly outrageous given the hype and passion circulating about using Facebook by NPO’s for online fundraising. It seems everywhere you turn we have charities urging us to “like” them, to support their efforts. Daily my news feed blows up with requests from friends to give to the –> insert cause here<– organization to help them cure, fight, win, save, grow or change.

Before I get angry posts here by those who might find these comments slightly adverserial, I am NOT disparaging the NPO’s for trying. Good things do come from visibility and advocacy in this way.

It just doesn’t look like any of those good things include $$$$$$, and I wanted to know why.

To be more clear on this subject I recently undertook a (very unscientific) research project of online fundraising  by US NPO’s. I researched Web 2.0 portals designed to help nonprofits raise funds online. Here is a list of those I identified and used in this study:

  1. Causevox.com (Beta)
  2. Changingthe present.org
  3. Connecttocharities.com
  4. crowdrise.com
  5. Donorschoose.org
  6. firstgiving.com
  7. Fundrzr.com
  8. give2gether.com
  9. giveo.com (Beta)
  10. Globalgiving.com
  11. Independentcharities.org (givedirect.org)
  12. Jolkona.org
  13. Jumo.com (Beta)
  14. justgive.org
  15. mtdn.com (MakeTheDifferenceNetwork)
  16. networkforgood.org
  17. Pledgie.com
  18. Razoo.com
  19. sixdegrees.org
  20. tuttidare.com (Beta)
  21. yourcause.com
In addition to these, I discovered four more sites currently in beta to be launched this year (2011), including one called ‘Supporter Wall’ – I presume to model itself after Facebook’s Causes (which we now know works so well, lol)
This list is in no way exhaustive, nor as I said scientific, so all you data wonks, don’t go all geeky on me 🙂

Some observations.

Most of these vendor developed online fundraising sites have a short life history, from 2000 to the present. One site started and closed within a few years (Make the difference network). Firstgiving.org, which also has a U.K. version called justgiving.org,  and Network For Good have the longest history with the years 2000 and 2001  claimed as launch dates on their sites.

When a gift is made through one of these fundraising portal sites to your charity, the gift is held in a donor advised fund owned by the company. Despite the web address extension of .com on some of them, most of these vendors have a 501C3 status organization as an affiliate, which handles the donations, for tax relief purposes. When a gift is made to your charity, the tax receipt is from the vendors 501C3  organization, not from your charity. Of course you are encouraged to send a thank you, but the receipt is not from you to your donor, it is from Network for Good. This might mean something to some donors who want to be ‘counted’ as having given to your cause, but for most they may not notice. The distribution of your gift from this donor advised fund is not instantaneous- most are scheduled as a once or twice per month distribution. These donor advised funds are presumably managed by investment firms. No information could be found on where the interest from these temporarily held funds goes. I would imagine they might be part of the revenue stream for the portal vendor. In one interesting case, the corporate officers of a certain portal vendor, were found to also be the principals of the  investment firm that manages that particular portals donor advised fund. Hm?

The big gorilla, based on longevity and reach with NPO’s is Network for Good. They have an interesting B2B model that probably helps with their revenue stream for operations. Many of the newer and beta sites listed above, indicate that they use Network For Good to process and manage their donations (as the 501C3 donor advised fund), for which a “grant” of 4.75% is paid to Network For Good, presumably by the charity receiving the donation. It raised the question, “Then how are these particular portal vendors earning money?”.   Probably through Data Analytics, like Facebook, and through ad sales. If you are not paying for a service, you are not the customer, you are the product.

One interesting site is the Independent Charities of America (ICA) site at givedirect.org, which offers individuals the ability to create a personal foundation, to which they can invest an initial low amount of $250, all contributions being tax deductible and distributions can be made at the donors convenience with only 5% of the foundation $$ needing to be distributed annually. It does not have any social networking capacity or connections with charities, although it links to an outside source for charity information. Beside ICA, the other vendors reviewed are set up to offer multi-cause, multi-organizational opportunities, most of whom (but not all) require a charity to be a registered IRS entity, with a position on Guidestar or BBB.  Only two that I reviewed allowed anyone to raise money for anything – personal causes (a new boat??), medical bills, weddings, etc.

I then reviewed the number of nonprofits each fundraising portal vendor had as ‘registered’ on their site or the number of charities which they had distributed funds to last year, as well as the total amt of money raised through their portal. As expected those vendors who were .org or had listed the .org affiliate who managed their funds, were easier find data on, getting it directly from their 990’s off of Guidestar. The few corporate sites had limited data available for review. Of those portals where data on number’s of charities served and amount raised could be found,  the avg raised per year / per charity through their online portal revealed the highest amt was just about $30K per charity on avg. and the lowest was $470. In going back a few years, spikes can be seen that I can only assume correlated with global disaster fundraising, for which online giving seems the go to measure.

Let’s pause for a moment here.

If the Network for Good is eleven years old, has a breadth of experience and professional technicians leading its efforts, has a global reach, and it cannot help the NPO to raise more than $30K per year on avg……whats wrong with this picture? A good annual appeal direct mail campaign would be more successful.

Ruminate on this for a minute and we will review the fees charged to charities for this privilege.

In the list reviewed, fees range from a low of 3% per transaction  to a high of 15%. One site took no fees but required a $9.oo per project fee from the charity. Some sites also required credit card processing fees on top of transaction fees. Some sites asked the donor to consider covering  these costs for the charity. All told, the fees charged are, as with everything, buyer beware for charities when it comes to choosing to engage in online fundraising using these portals.

I don’t know about you, but if I had to pay $199 per month for my charity to be listed and an additional 3% per donation, plus credit card transaction fees, not to mention the back office costs of staffing for management, gift processing, stewardship etc. I would want evidence of a significant return on my investment.  *Side note- nowhere on these portals did I find any pitch to support the financial value proposition of charities using such a site for fundraising.

Back to our review.  Given the advent of Facebook, Myspace, Friendster, LinkedIn and other social networking sites into our culture, I expected to see a lot of these vendors offering a social networking aspect to their services. And they did not fail me, although they are not as advanced as I would expect, nor as would be beneficial. While 1/3 have no social networking aspects, 1/3 have what I would term a simple or basic social networking component to their sites, while 1/3 use existing Facebook linkages and – yes – Causes, exclusively. Some include a game of collecting or placing badges on current social networking sites like Facebook, twitter etc.

All of those vendors reviewed offer or require a pitch page that charities use to highlight their organization or their project or, in two cases, requests for funding for very, very specific needs: pencils, books, etc. This allows the donor to get most of the info right on the vendors portal without having to bounce off to the charities site, although most offer the option of placing a link to your organizations homepage on your pitch page.

Donorcentric?  Many of  the sites offer intent options to the donor during gift processing, but not the majority. This is, in my humble opinion, a great defect in these portals. It undermines what we in the industry know about donor giving- that it is specific to the interest of the donor, NOT the need of the organization. I guess they rationalize this, by considering the potential for massive volume of  possible donors- like throwing **** against a wall and knowing some of it will stick.  Some limit the gift intention choice for the donor by project as defined by the charity. The newest contender Jumo.com (by Chris Hughes the co founder of Facebook) does not currently offer donor intention option, but it is in beta and soon could.

One other *missed* opportunity by these portals in being donorcentric, is in offering to the donor (or requiring of the charity) gift use reports for each donation.  Very few offer this option, although some do require charities to show evidence of their project completion as defined on their pitch page. Donor intent is a very hot topic and something that quite often will keep donors from contributing, out of fear that their gift wont be used as intended. Currently, there is no system to screen for that through the checks and balances surrounding NPO’s in the US. The annual tax audit NPO’s are required to have only ensure that accounting methods are followed accurately and that the gift intention was followed when depositing and allocating the money, not necessarily that the gift was then used to purchase the product or build the building. Would the benefit and value of required gift reports bring more donors to the online system of giving?

Conclusions? These vendors mean well and I applaud them for trying. Most of these portals are built on direction from nonprofit industry experts, but they fall short of being technologically cutting edge. Others are developed by Techstars, who have no inside knowledge of how a donor thinks, feels or acts, or what best practices exist in raising money from individuals for a charitable group.  All portals are directed toward the relationship between the vendor and the charity – and all but ignore the needs  of the donor!

Online fundraising needs to continue to be examined and manipulated. How are we currently using social media and to what end results? How can online fundraising better mimic and support our real world relationship building efforts with our donors? Is there a niche for online fundraising that we haven’t uncovered yet? I personally don’t believe we are there yet with any of this stuff- online giving results we are currently seeing are abysmal. We need to keep shaking it up, reformulating and evolving to determine what ‘IT’ is that might make this a productive and supportive tool in our arsenal.