The ROI for Social Media Fundraising

This week, a tech company VP called for my advice about a social media application under development that involves giving. Sort of. Their idea combines an E-bay/Freecycle idea with a give-to-my-favorite-cause idea. I'm a "creative" and generally, love combining the unrelated. To me, these unrelated ideas still feel best, and most honest, treated separately. Serious potential for tax confusion on the part of buyers and sellers, too (although the IRS will not be confused! The law is clear.) Anyway, it got me thinking about the real value of the new social media fundraising.

The real power of giving through social networks is with first level "fans." These are new ways to engage fans to participate meaningfully and more deeply in whatever movement your group is building--as well as new ways to acquire "grassroots" donors! And as for the Money? Always, in fundraising, more people asking means more people know about the cause and more people give. So this is good.

But as nonprofit leaders, we need to use resources and energy in strategic, not scattered ways. And from old fashioned, time-tested fundraising strategy (and human giving behavior), we know that the friends of Super Donors may give once or more often, but few will become fans themselves. While some may become regular or annual donors for awhile, few will join in as leading, engaged Super Donors.

Given my musings, I was really glad to see that my blog partner Randal Mason discovered and linked to The Agitator's post in the latest Resource Roundup. The Agitator suggests a formula for predicting return on investment for social media fundraising (via Facebook, etc.). I think he's onto something (and Agitator's background with early days Common Cause and Craver, Smith direct mail experts means the calculations reflect sage experience). But I'm with commenter Richard Pordes who thinks Agitator's math may be unrealistically optimistic.

My guess (and yes, the field needs actual research, somebody!) is that for the first ask via Internet, friends of "fans" will donate at somewhere between 3 to 15% (direct mail to a warm list), rather than the 50% to 66% of a face-to-face personal and targeted ask. Of course, if your fan is the extraordinary Beth Kanter, who has tested these tools numerous times, she has a zillion friends and so that'll be a lot! But even if your fans are not quite as amazing, it's completely worth investing energy in welcoming and encouraging your fans to use these cool new tools.