8 / 8 / 2014
Charities Like Facebook for Rallying Support but Not Much for Fundraising
Facebook, with its audience of 1.2 billion worldwide and 128 million daily users in America, has long been touted as ...
Facebook, with its audience of 1.2 billion worldwide and 128 million daily users in America, has long been touted as a great way to help nonprofits find supporters.
But many fundraisers and charity leaders say that the social network remains a fickle partner in the drive for donations.
Only 2 percent of nonprofits in the United States raised $10,000 to $25,000 through Facebook in a 12-month period, and 1 percent raised $25,000 to $100,000, according to a report released last year by Blackbaud, a fundraising-software company.
Roughly 1 percent of all online fundraising can be attributed to social media, including Facebook, according to Blackbaud’s research.
John Haydon, author of Facebook Marketing for Dummies, puts it in simple terms: The social network is lousy for fundraising.
"Very rarely would you pull out your credit card when you’re on Facebook," says Mr. Haydon. "People are going there to connect with friends or relieve boredom or avoid work. It’s not about making donations."
The Donate-Button Test
Last December, Facebook ran an experiment: It gave 19 charities that are particularly active on the social network a donate button to use on their Facebook pages to boost year-end giving.
But the company and many of the charities that participated in the test have been mum about the results. And judging by the experience of one of them, that modesty may be justified.
The Leukemia & Lymphoma Society reported raising $3,500 through Facebook in the wake of the experiment. But that’s barely a sliver of the $98.5-million the charity raised through all online sources last year.
One problem with the test overall: The donate button did not appear in the Facebook mobile app, where roughly 78 percent of daily Facebook users access the platform.
Facebook officials say they are analyzing the effectiveness of the donate tool and will decide later whether to expand the program.
Lauren Van Horn, who oversees Facebook’s partnerships with nonprofits—a newly created role—said the company had not compiled data on the amount raised using the donate buttons.
Changes to News Feeds
The social network has also made recent changes that pose challenges for charities. It tweaked the algorithm that determines which posts will appear in a user’s news feed, making it more selective. Nonprofits are asking why their posts aren’t appearing in news feeds and why the number of people viewing and "liking" those posts has dropped.
"Organizations don’t realize how many people aren’t seeing those posts," says Wendy Marinaccio Husman, a senior account executive with Donordigital, an online-fundraising consulting firm. Facebook, she notes, is "designed to make money. It’s not designed for nonprofits to raise money."
With the new algorithm, individual posts placed on a nonprofit’s Facebook page are delivered to only a small percentage of its fans, especially if those posts don’t generate comments, likes, and shares, according to Drew Bernard, chief executive officer of ActionSprout, which develops tools that nonprofits can use on the Facebook platform.
Many organizatons contend that, in tweaking its algorithm, Facebook deliberately cut the audience reach of posts to force businesses and nonprofits to buy ads or sponsored posts guaranteed to appear in visitors’ news feeds.
Mr. Bernard says the social network is making organizations to "pay to gain reach for content that didn’t attract an audience organically," and that nonprofits can avoid paying by creating engaging posts.
But Facebook officials respond that the changes to the news-feed algorithm were made to ensure users find the best-quality content, posts, and causes that interest them, based on their likes and shares. At any given time, Facebook officials say, an average of 1,500 posts are available to a Facebook user viewing his or her news feed. Reducing the clutter for each individual user is the goal.
Peer to Peer
If the world’s biggest social network falls short in helping charities raise money directly, it nevertheless offers some advantages in helping them rally supporters through peer-to-peer drives, in which people solicit donations from their friends, usually to sponsor them when they participate in a fundraising event on behalf of a charity.
In a study this year of 135 peer-to-peer campaigns such as walkathons, Artez Interactive, a company that sells online-fundraising services to nonprofits, found 15 percent to 18 percent of the donations were generated directly through Facebook.
The study also found that 28 percent of the traffic referred to a charity’s fundraising page originated from Facebook, and those visitors responding to a peer-to-peer request will make a gift 23 percent of the time.
"It’s completely obvious that’s what would work best," says Ms. Husman. "People give to people. If your friend is making a gift and asks you to do the same, whatever medium it is, it’s going to be much more effective."
Researchers at George Mason University confirmed that idea. They found that a donor’s Facebook-wall post about making a gift was the most effective path to generating new donations from friends, suggesting that nonprofits will benefit from encouraging donors to use social media to share news of their support for a charity and to urge others to give.
"When you ask your friend in front of their friends, it seems to be the most effective," says Ragan Petrie, an associate professor of economics at George Mason and a co-author of the fundraising report. "Having the social pressure seems to be important."
Facebook’s vast audience also provides unmatched potential to find new supporters, gather data about them, and drive them to act.
The key, say people who help charities raise money online, is to create engaging content that will generate clicks, likes, shares, comments, and actions that expand the broadcast and provide a means to capture data and donor prospects. Spending money on Facebook ads or sponsored pages—as little as $500 to $1,000 focused on a target audience, fundraising consultants say—can help posts that are already seeing robust traffic reach even more potential supporters.
The Leukemia & Lymphoma Society found success with a stand-alone ad purchased on Facebook to promote its Team in Training program and Light the Night Walks. The ad produced 1,000 leads for Team in Training and 3,000 registrations for Light the Night.
In addition, it can be highly cost-effective to acquire potential supporters’ email addresses through Facebook and its support tools and to make an appeal for donations later in the online conversation.
ActionSprout estimates that a call to action, which requires a user to share an email address, generates five to 20 new email addresses for every 100 Facebook users who engaged with the post.
A Tool for Advocacy
Experts advise nonprofits to view Facebook as a listening tool as much as a megaphone, to know their audience; and to craft posts that meld followers’ interests with the organization’s mission.
With a vast supply of exotic-animal photos, the World Wildlife Fund has a natural advantage in capturing attention and generates tens of thousands of likes and shares for pictures of rhinos, dolphins, and so on. (A participant in Facebook’s December experiment, it would not reveal how much it raised through the social network.)
The international animal-protection group spends a small percentage of its advertising budget to boost Facebook posts and would increase that spending if it noticed a decrease in engagement, which it thus far hasn’t, says David Glass, senior director of digital marketing.
But, says Bex Young, the charity’s senior specialist for social media, "You have to couple the cute with getting someone to take action," such as to sign up for an email list.
The Rape, Abuse & Incest National Network, or Rainn, employs a staff member solely devoted to online communication and uses the social network to educate and engage people in a personal way. Infographics have been particularly effective at generating shares and likes, says Katherine Hull Fliflet, the charity’s vice president for communications.
The organization raises about $5-million a year. It would not reveal how much it raised through its participation in Facebook’s donate-button experiment, but Ms. Fliflet says the social network has been responsible for a large amount of traffic to the organization’s website and the growth in demand for its online hotline.
Facebook, Ms. Fliflet says, has been "making charitable giving more accessible, particularly to those who may be first-time givers or younger donors who are looking for a way to interact with a charity."
OurTime.org, a three-year-old nonprofit that encourages political action by millennials, also pushes its advocacy mission with the help of Facebook.
Its six-person staff has gained one million members and 363,000 likes on its Facebook page. It registered 350,000 voters in 2012 and spent less than $1 per voter, showing that the social network can be a cost-effective tool to push people to act.
"We have an email list, but we don’t want to email them eight to 10 times a day," says Jarrett Moreno, OurTime.org’s founder. Facebook, he says, has helped the group get its message out in a less intrusive way: "They’ll click and share or comment, give us another opportunity to appear in their friends’ news feed, and then they’ll follow our page, too."
8 / 8 / 2014
Average Nonprofit Spends 3.2% of Budget on Technology, Report Says
The average nonprofit technology budget accounted for 3.2 percent of total annual organizational spending, according ...
The average nonprofit technology budget accounted for 3.2 percent of total annual organizational spending, according to a new report.
Most groups said their spending on hardware, software, and consulting changed minimally compared with the previous year.
The eighth annual Nonprofit Technology Staffing and Investments Report, published by the Nonprofit Technology Network, or NTEN, examines the roles of information technology and technology support staff in overall operations.
The new findings are based on survey responses collected from 781 nonprofits for their current fiscal year.
Among the other findings:
Nonprofits budgeted an average of $114,443 for technology in their most recent fiscal year. That figure ranges from $10,530 to $432,214 depending on the size of the organization.
The average nonprofit reported having about four-and-a-half technology staff members. On average, one technology person supported 30 employees.
A little more than two-thirds of nonprofits reported that their strategic plan includes technology components, but nearly half said they are not conducting any assessments to figure out their return on investment from technology spending.
Slightly more than half of nonprofits described their current use of technology as "operating," or having a stable technology infrastructure, practices, and procedures. Only about 12 percent ranked themselves as "leading" in technology, while the remaining nonprofits described themselves as barely maintaining, or failing to maintain, their technology systems.
Average Nonprofit Spends 3.2% of Budget on Technology, Report Says, July 28, 2014, Nonprofit Quarterly, by Megan O’Neil
8 / 8 / 2014
In Praise of Operations: Making "What Works" Actually Work
The fundamental value proposition of the "what works" movement is that the lives of many people in need can...
The fundamental value proposition of the "what works" movement is that the lives of many people in need can be materially improved by expanding the reach of programs and organizations that reliably yield strong results for those they serve.
Which leads me to this question: why do we in the social sector give so little attention to operations—that is, what makes "what works" actually work?
Peruse the sector's journals, blogs, webinars, and conference themes and what do you see? Pretty much anything but ops. They seem to be dominated by more glamorous subjects: the invention of new programs and interventions, the application of "design thinking" to routine problems, scaling, policy advocacy and "systems change," novel approaches to luring private capital into the social-purpose marketplace (such as social impact bonds and "impact investing"), even scientific methods of proving what works.
But what about delivering what works? Rarely addressed is the need for quality and consistency of a program's performance, not to mention the painstaking, repetitious internal processes required to produce outstanding results–in a word, "operations."
Disciplined management, rigorous analysis of performance data, accounting for true costs, relentless efforts to improve processes and programs, the hiring and development of great people—these are essential to ensuring that what is promised in theory is realized in practice. but simply don't seem to get due attention or respect.
This stands in stark contrast to the business sector, where it's clear that what creates real value for people served—and thereby justifies their parting with their hard-earned cash—is consistent, cost-effective delivery of a high-quality product or service that works! True, design is important, as is marketing, branding, technological innovation, capital-acquisition, and advocating for favorable public policy. But the ultimate purpose, and key driver of an organization's health and growth, remains the production and use of products or services that satisfy people's wants and needs.
No one understood this better than Steve Jobs. Yes, he was a charismatic visionary who could generate excitement about compelling concepts and truly breakthrough product ideas. (Indeed, he was so accomplished in these regards that there's every reason to believe he would have made an outstanding nonprofit CEO!) But he also knew that what motivated millions of people around the world to hand over billions of dollars to Apple was not the hype but the reality of reasonably priced, reliably performing, feature-laden products—made and distributed through painstaking, highly repetitious, exacting and decidedly unglamorous processes. Indeed, Jobs appreciated this so well that he selected as his successor Tim Cook, the mastermind of Apple's operations.
Of course, we do not have to rely on for-profit exemplars to demonstrate how operational excellence can drive high customer value and organizational health and scale. Take Teach for America, where Wendy Kopp's legendary vision and dedication to her cause have been matched only by her messianic focus on determining which practices, procedures and methods do, in fact, work—ensuring that TFA could be counted on to deliver, day after day, year after year.
So why does our sector undervalue operations? Mainly, because the financial health and growth of nonprofit organizations is generally not a function of reliable, consistent delivery of products and services that provide superior results. For most nonprofits, funding comes from third parties—government, foundations, individual donors—paying for services on other people's behalf. And in making funding decisions, these third parties have typically focused on many factors—such as well-crafted stories of transformation, clean audit reports, or recommendations from influential supporters—rather than objective, comparative performance. It's hardly surprising, therefore, that the most valued skills of nonprofit CEO's have tended to be the ability to woo those foundation, government, and individual backers, not to rigorously manage and continuously improve program quality, cost, and delivery.
But let me point to two budding efforts that give me hope that operations may finally be gaining respect.
Changing how we think about overhead. Too often, a nonprofit's investments in robust operations capabilities and capacities are categorized as "overhead"—long a dirty word among both funders hoping to maximize their return on investment and agencies aiming to identify the most effective nonprofits. But things may be changing. In a widely publicized "open letter to American donors" in June 2013, the CEOs of GuideStar, Charity Navigator, and BBB Wise Giving Alliance—Jacob Harold, Ken Berger and Art Taylor—wrote that "The nonprofit sector…has too often erroneously focused on overhead over the past few decades, which has starved nonprofits from investing in themselves as enterprises and created what the Stanford Social Innovation Review calls 'The Nonprofit Starvation Cycle.'" And in December, the federal Office of Management and Budget released guidance that requires that nonprofits receiving federal funds get a minimum of 10 percent reimbursement rate on indirect costs (previously it could be—and often was—zero).
Focusing on high-performing organizations. Building on his influential book Leap of Reason, entrepreneur Mario Morino's Leap of Reason Institute is using an annual conference, a website, speeches, and publications to build support for high-performance nonprofit organizations. Leap of Reason focuses on strong management, operational execution, ongoing performance measurement, and continuous improvement, all intended, as Mario writes, to aid "those who understand in their bones that high performance is integral to ensuring material, measurable, and sustainable good." Which brings me back to Steve Jobs. "Some people think design means how it looks," he once said, "but of course, if you dig deeper, it's really how it works."