Fundraising in Social Networks?

Justin PerkinsNonprofit Marketing Strategistjustin@care2team.com

Social Networking = Word of Mouth

Distributed Work

10,000 people doing 10 minutes of work

• =1,667 hours of work• = 42 weeks for one staffer• = 4 weeks for 10 staffers• = $30*1667 hours = $50,000• Value of volunteer hour = $18(Value of volunteer time study:

http://www.independentsector.org/programs/research/volunteer_time.html)

From the Wayback Machine

Care2.com circa 1998

4

Nonprofit Websites Circa 1998

Broadcast Era Paradigm

Network-centric Paradigm

Social Media Tools

Social Networks & Human Needs

•The need to connect with others

•The need to create, be creative

•The need to have voice and influence

Online User Behavior Shifting

• Instant gratification• Short attention span• Customization• Informal, quick,

personal• User-generated content

& participation

Informal and Personal Web

• Rise of bloggers• Personal voice• Transparency and trust• 3-way communication• A Facebook “Poke”

might go further than a press release

Who Should Try Social Networking Campaigns?

•You have already maximized your

email marketing strategies

•You have lots of young, tech-savvy

volunteers

•You have huge email networks

and budgets to experiment

•You have dedicated staff for care

and feeding

•You have hip messaging

•You’re willing to give up control

•You have a recognized brand

•You do local events

Care2 Today: Largest Do-gooder Social Network

More than 10.5 million Care2 members are making a difference by:

• Taking Action• Volunteering• Donating• Telling friends• Sharing news

• Care2 helps nonprofits grow through introducing millions of Care2 members to nonprofits!

Care2 Nonprofit Partners

Be Prepared

Are you ready to quickly reach

several hundred thousand people who trust your organization?

Be Prepared for Your Katrina-like Moments

•It’s all about your “list”- starting with email

•Care2 recruited 5000 new donors in 1 week

•Raised $205k for American Humane

•Also raised $150k from self-organizing Care2 members

Your “List”

Mobile phone list

Mobile phone list

Social media “friends”

Social media “friends”

direct mail list

direct mail list

Email listEmail list Phone listPhone list

Adults prefer contact via email

Where do people spend most of their time at work? The inbox.

Most people donate online while at work.

Email = Best Lever for Online Impact

•Efficient•Timely•Drive traffic precisely•Measurable•Controllable•Proven ROI for $ and Advocacy•Personal medium•One to one•One to many•Viral•Even Grandma uses it now!

The value of an email address to

a nonprofit is $9.50!

Power of Email vs. Social Networks for Fundraising

•In June of 2007, M&R helped Save Darfur raise $415,000 via email series to about 1 Million supporters in 10 Days

•Over 1 year on Facebook Causes, Save Darfur raised $28,000 from nearly 1 million “friends”.~ 3 cents per friend

•Very few cases of replicable, profitable campaigns on Social Networks when investing staff time

•Nonprofits raised $3 Million on Facebook Causes in 2008, but at an estimated cost of $300 Million to sector

Correlation of Email to Fundraising

Nonprofit benchmark studies: frogloop.com/benchmarks

Majority of Online Fundraising via email

Nonprofit benchmark studies: frogloop.com/benchmarks

Long, long tail of Facebook Causes•Only .2% of Facebook Causes account for

40% of all money raised•Only 513/ 180,000 Causes have more

than 20,000 supporters•Median donation is $.01 per Cause

member•ROI on time invested is negative –

estimate of 300 to 1 loss•Difficult to communicate with donors en-

masse•Most Causes raise 58% of all donations

from the top 5 donors – 20% from the top

donor•If you can get 1% of an equivalent email

list to donate, you should be able to raise

50-77 times more than on Facebook

Median dollars raised = $570

MySpace: a Place for Donors?

http://www.frogloop.com/myspace-analysis

Hint: the study reveals result similar to the “long, long tail of Facebook Causes” study. In other words, very few nonprofits have been profitable on social networks.

Social Networking isn’t Free or Easy

Yes, the dream has a few kinks in it:1. There are very few successful super-organizers in the world 2. The good super-organizers are spread very thinly across over

1 million organizations and significant financial impact for any one organization is limited

3. Financial returns to orgs from Peer-to-Peer (social network) fundraising is insignificant for MOST orgs and not a scalable strategy

4. MOST donors are happy giving $50, feeling good, and getting on with life – they aren’t actively seeking to do more.

Opportunity Cost is a Real Cost, Folks!

Staff Salary + Benefits (+30%)

Annual Email Subscribers

$40,000 + $12,000

10,000 email addresses

Total cost per email = $5.20

For any online marketingDetermine Goals, Organizational Metrics and Track!

Set specific goals and a common metric to track organizational success!

Social Networks Fundraising & Advocacy ROI Calculator

http://www.frogloop.com/social-network-calculator

If you’re expecting to use social networks to raise money with minimal work, you can expect to see a -90% ROI against time spent by staff.

This is a conservative estimate using widely published benchmarks for online marketing, and a conservatie hourly wage of $10/hr.

www.frogloop.com/social-networking-calculator

What Makes Social Network Marketing Work?A HUGE LIST

+FIRST MOVER ADVANTAGE

+MEDIA EXPOSURE

+LOTS OF STAFF TIME (or $$)

+AN EXPERT GRASSROOTS ORGANIZER

+TECHNICAL SAVVY & CAPACITY

+LUCKY TIMING

+

NEWSWORTHY STORIES!

Think like a Rockband

From Tweets to $250,000

Nonprofit Marketers’ Toolbox

Choose the Right Tool

Sales Cycle

Cutting Through the Noise• Huge email lists• Smart Guerilla

marketing – leverage news

• Constituent-centered communication

• Efficient use of web presence and staff

• Coordinated efforts across org silos

• Data integration and targeting!

Old Nonprofit Paradigm

• If you build it, they will come

• Crank out reports and press releases

• Slap press releases on websites

• Wonky, organization and issue-centric

• Static• One-to-many

wah wah, wah

New Paradigm

• Audience-centric• Story-telling• Search-engine

optimized• Timed with the news• Creative, fun,

personal, bloggie-style writing

• Funky lamb-chops• Many-to-many

Sales Cycle

Be conscious and realistic about the goals and possible outcomes for each tool that you use. What phase of the sales cycle are you serving?

Microsoft Instant Messenger & HSUS

Where it’s all headed: Data Integration & Targeting

Your “List”

Mobile phone list

Mobile phone list

Social media “friends”

Social media “friends”

direct mail list

direct mail list

Email listEmail list Phone listPhone list

Social Network Participation

Number of Friends/Contacts on Social Networks

Age of Constituents by Social Network

Breakdown by Gender

Employer Matching Gifts

3 Key Takeaways!•Be prepared for the big moment– be prepared to be lucky

•Be everywhere you can be, but prioritize -- right tools for the right purpose

•Set goals and track – don’t just keep up with the Joneses!

Contact

Justin PerkinsDirector of Nonprofit ServicesJustin@care2team.com303-475-4827LinkedIn: http://www.linkedin.com/in/justincperkins

For Nonprofit Marketing & Communications tips, visit frogloop.com. Lots of Social Networking Case Studies in the archives.

Appendix

About Justin PerkinsJustin Perkins joined Care2 in 2006 with an eclectic background as a social entrepreneur, accidental techie, new media marketing expert and former State water resources administrator for a major watershed in Colorado.

Justin develops partnerships with nonprofits and customizes strategic campaigns for them to reach Care2's audience of 10 million members. He also develops new tools to help nonprofits with marketing and fundraising.

Justin launched frogloop.com, Care2’s popular nonprofit marketing blog, as a way to share cutting edge case studies and best practices for nonprofit online marketing. He has an MBA from the University of Colorado, enjoys trail running & skiing, sells roasted nuts at the farmers markets on the weekends, and frequently writes & speaks at conferences about online marketing.

Contact Justin if your nonprofit would like a free hour of online marketing consulting. justin@care2team.com

Care2 members are a great resource for nonprofits:

• Email list growth• Donor leads• Surveys & Research• Branding • Drive Traffic to Site• Education & Outreach• Online advocacy

Care2 Helps Nonprofits Grow

The Largest Ideal Audience for Nonprofit Advertising…

… full of Engaged Influentials, Online and Offline

Care2 is an active online community. What makes them really special is their propensity to do more…

Care2 is an active online community. What makes them really special is their propensity to do more…

Links for more research

frogloop.com/social-network-calculator

frogloop.com/social-networking-tips

frogloop.com/benchmarks

Main Ways that NPO’s Use Social Networks

Goal Examples Success?

Awareness & Outreach

New programs, building buzz

Yes

Advocacy Passing legislation

Some

Fundraising Donations Minimal

Social Network Profile = Mini Website

Social Network Profile:•Layout, design, optimization

•Grow Friends list

•Post content

•Get people to do stuff

•Brand control

•It talks back at you

•Competing w/ other profiles

for attention

Website:•Layout, design, optimization

•Grow email list

•Post content

•Get people to do stuff

•Brand control

•It talks back at you

•Competing w/ other sites

for attention

Social Network Profile vs. Website (Pros)

Social Network Pros:•The tech platform is free

•Located in connected

audience

•In context of connected

friends

•Info can spread easier

•Posting content can be

easier

Website Pros:•Tracking of performance

•Customization

•Control of brand

•Optimize for goals

•Higher conversion rates

•More people using “Search”

than Social Networks

•Proven ROI

Social Network Profile vs. Website (Cons)

Social Network Cons:

•Hard to track important stats

•Harder to customize & optimize

•ROI unproven & costs deceiving

•Lots of competition & noise

•Managing multiple systems

•Time-consuming

•Less control

Website Cons:

•Can be costly to do well

•Most people aren’t surfing for

nonprofit websites

•Pace of technology hard to keep up

•Requires technical staff or consultant

•Driving traffic to website a challenge

Humane Society of the United States- Seal Campaign on MySpace

Oxfam America in MySpace: meeting people where they are

Care2 campaign on MySpace