Nonprofit Strategy Blog

We started Pledge4Good (“P4G”) to let motivated people give to their favorite nonprofits (charities, schools, etc.) in a fun, social manner without changing their daily habits. Visit us on pledge4good.com today!

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Introducing the pledge4good web widget

We’re thrilled to introduce the pledge4good website widget, which allows you to embed information about your favorite pledges onto your website or blog. 

Simply visit www.pledge4good.com/widget, search for the pledge that you would like to embed in your site. The results will provide 2 (!) lines of code that you can copy and paste into your website or blog. You can also click “embed this pledge” on the right hand menu of your favorite pledge and get the embed code right there.

For those techies out there, you can even fully customize the look of the widget using CSS.

You can see a preview of the pledge4good widget in action below (searching for the term "half marathon").  We can’t wait to see the great pledges that you’re creating be even more effective fundraisers for your favorite nonprofit.

half marathon

Happy fundraising,

Vik and Lenny

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Be one of the first to use new features on pledge4good!

A few months ago, we introduced you to our new mascot, Forgee. Well, we are pleased to announce today that Forgee was only the first step in revamping pledge4good to make the site more intuitive, simple, and, yes, more visually appealing.  Our goal has always been to make pledge4good the most effective website to fundraise with friends, and we think pledge4good 2.0 is a significant step towards achieving that goal. Coming back to the redesigned pledge4good.com, you’ll find:

An improved user dashboard, from which you can easily manage and view statistics about all pledges you started or joined

Simpler and shorter forms, with refined helpers (hover over a “?” in a form) to guide you along the way

An enhanced mobile website and Android app (iOs coming soon), built in HTML5, with all the functionality of pledge4good on your home computer

An advanced Facebook, Twitter, and email messaging system, making it easier than ever to send fun, effective, and fully personalized fundraising messages to your friends

Greater multimedia capabilities, including the ability to upload photos to your fundraising pledges

These are only a few of the changes that we have implemented on pledge4good.com over the past few months. We hope you visit us soon and let us know what you think. Email us thoughts, comments or questions at [email protected].

Happy fundraising!

Vik and Lenny

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Square: More Transparent, Probably Not Cheaper

     At pledge4good, we constantly are thinking about payment processing fees as we want to ensure that as much of donor’s generosity is received by our partners, whether charities or universities. As such, we closely follow Square, a start-up revolutionizing payment processing for offline, retail merchants. Square recently announced a new pricing plan for merchants that does away with the complication of variable rates for different types of payment transactions—i.e. keyed vs. swiped, card not present vs. present— introducing a fixed $275 per month per merchant fee below certain volume levels.[1]

     While we applaud Square for finally bringing transparency to the area of payment processing costs for merchants, we think our retail friends should be cautious in rapidly embracing the Square’s new pricing plan. While Square has significant momentum—they recently announced a deal to take on all payment processing for Starbucks in the U.S.—Square, despite its cost transparency, can be more expensive than the standard merchant account offered by your bank. In particular, Square appears more expensive for offline merchants:

with greater than 50% of payment volume coming from debit transactions

with less than $100,000 of annual credit/debit card processing volume and average payment sizes greater than $10

or with greater than $200,000 of annual payment volume and average payment sizes  greater than $35.

     We built a handy calculator for merchants to determine whether Square and its new pricing works for them. You can find it here: https://docs.google.com/spreadsheet/ccc?key=0Av3_04cA_hyjdEE3bi0zem9HZDB4WDQwdE5LemZlOGc. 

Please email me at [email protected] with any questions you have about using the calculator or the contents of this blog post.

[1] Source: http://www.businessinsider.com/square-new-pricing-plan-math-2012-8

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10 Feeds Every Nonprofit Should Follow on Twitter

Building a strong social network is vital to nonprofit success. As such, for our friends who are “socially-oriented” in both meanings of the word, we compiled this quick list of feeds to follow.  These accounts will not only help you expand your network, but provide cogent advice for nonprofits and the socially-conscious on twitter.  As Confucius said, “When you see a worthy person, endeavor to emulate him.”

1)  @Kanter

With over 400,000 followers, Beth Kanter takes the top spot on our list.  Simply stated: every nonprofit stands to benefit from reading her blog, “How Nonprofits Can Use Social Media.”  Beth’s blog posts will certainly help jumpstart any organization’s social media strategy.  Additionally, she regularly tweets engaging content about her travels and work with nonprofits (she is currently documenting her time in Cambodia with some great pictures!).

Follow @Kanter

<![CDATA[// <![CDATA[ !function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0];if(!d.getElementById(id)){js=d.createElement(s);js.id=id;js.src="//platform.twitter.com/widgets.js";fjs.parentNode.insertBefore(js,fjs);}}(document,"script","twitter-wjs"); // ]]]]><![CDATA[>]]>

2)  @NonprofitOrgs

While Beth can help you get acquainted with the social media world, following Nonprofit Orgs is a great way to connect with other charities. In keeping with their mission is “to serve as a portal to all nonprofit organizations on Twitter,” they only follow nonprofits and nonprofit employees, forming a rich network of third sector streams.   

Follow @NonprofitOrgs

3)  @Philanthropy

The Chronicle of Philanthropy is a wonderful resource for anyone interested in nonprofit work, and the same can be said for their twitter stream.  Some claim that Twitter’s greatest gift is real time news, and @philanthropy makes it easy for your nonprofit to keep up with headlines affecting the sector.

Follow @Philanthropy

4)  @TwitCause

TwitCause is dedicated to helping nonprofits on twitter—a noble aim that may convince you to follow them.  If that isn’t enough, every Thursday TwitCause highlights a nonprofit and works to promote them through their growing network.

Follow @TwitCause

5)  @npquarterly

As with The Chronicle of Philanthropy, following @npquarterly ensures you stay up to date on important nonprofit sector news.

Follow @npquarterly

6)  @Successdotorg

This is the twitter account of Bill Fitzpatrick, founder of the nonprofit American Success Institute.  While his profile may seem quirky, he delivers solid advice and interesting commentary on a regular basis to his large following.

Follow @Successdotorg

7)  @Network4Good

The importance of online donating cannot be stressed enough (which is why we built pledge4good!).  Network for Good provides “practical, free fundraising trainings for nonprofits, and resources and software that make it as easy to donate online as it is to shop online.” As online donations increase, you need to stay up to date.

Follow @Network4Good

8)  @gatesfoundation

The Gates Foundation does philanthropy right.  With a huge war chest and tireless effort, the foundation has not only improved the lives of millions across the globe, but also changed the nonprofit sector in America by focusing on sustainable development. In short, we find it important to keep an eye out for nuggets of wisdom from this feed.

Follow @gatesfoundation

8a)  @billgates

While we won’t include him in the top ten, Bill Gates (and Melinda Gates) both have personal Twitter feeds that many nonprofits will find useful.  Presently, Bill seems to tweet much more on his work with the foundation than with Microsoft, so he is definitely worth a follow.

Follow @billgates

9)  @charitywater

Charity:water may be the strongest nonprofit account on twitter. They have well over 1.3 million followers, and they are constantly pushing out engaging content.  Following @charitywater is a great way to gauge best practices for how a nonprofit should operate their Twitter account.

Follow @charitywater

10)  @livestrong

Beautiful. Livestrong regularly tweets fantastic content, but they made the top ten because of their wonderful style. Any nonprofit trying to make a name on Twitter should take a moment to look at Livestrong’s profile.  Their distinctive colors and polished look are certainly to be admired by those looking to better brand themselves. 

Follow @livestrong

11)  Shameless plug: @pledge4good

Sorry! We had to give ourselves just a little mention.  We constantly tweet nonprofit related news, fundraising tips, social media tips and other useful information.  We also spotlight nonprofits and the socially-conscious on a regular basis.  Give us a follow if you like!

Follow @pledge4good

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$13.5K+ Raised from 11K (!) Miles: A Case Study of Baltimore/DC Runs

Overview: Back on My Feet is a national nonprofit organization focused on building self-sufficiency within the homeless population through a combination of running and educational, job training, and employment opportunities. The Baltimore/DC chapter of Back on My Feet (“BoMF B/D”) came to pledge4good in March of 2012 looking for a unique online solution to engage its extensive base of volunteers and “Member” beneficiaries, recruit new donors, and spread information regarding their unique poverty alleviation and homeless empowerment efforts in the Beltway area.  Together, pledge4good and BoMF B/D developed a plan that took advantage of pledge4good’s unique pledge technology to build an organizational fundraiser around the everyday running of BoMF BD’s volunteers and Members. As described below, the BoMF B/D greatly exceeded its fundraising goal, as supporters ran ~11,000 miles and raised $13,500 due to motivation provided by pledge4good’s goal-based framework. BoMF B/D’s Communications Director Jackie Truncellito noted: “[v]olunteers are more receptive to messages from peers,” and pledge4good provided a platform which engaged volunteers as “people got that pledges correlated to miles run was a bit more fun than just donating.”

Baltimore and DC Runs Description: For the month of June, each member of the entire BoMF B/D chapter was asked to track how many miles he or she ran. Goals of 6,000 miles and 2,000 miles were set, respectively, for the Baltimore and DC sections of the chapter, respectively. As illustrated below, some supporters joined the Pledge created by BoMF B/D to donate for every 100 miles the chapter ran during June, while others created pledges tied to their own individual running efforts, with all of this activity easily viewed on a single Campaign page. Both the Pledge (http://p4g.us/PIf) and Campaign  (https://pledge4good.com/campaigns/baltimore-runs) pages provided the ability to easily donate, share on social media, track fundraising progress, as well as post multimedia and comments.

The Result: BoMF B/D surpassed its fundraising goals:

The BoMF B/D community ran ~11,000 miles and raised $13,500

 179 donors pledged $1.00-$10.00 per 100 miles run by their section or mile run by a friend

90% of donors opting into providing their contact information to Back on My Feet

Your organization can sign up for pledge4good at https://pledge4good.com/partners/signup

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Introducing pledge4good's Mascot: Forgee

Hello, my name is... Forgee. Chant with me, For-gee! For-gee For-gee!... If you visited pledge4good.com last week, you might have noticed my chip-chirpy face welcoming you across the site. I wanted to introduce myself. But, since I have no Klout, can't code, Skype, QQ, or even wink, I had to wait for my caring colleagues at pledge4good to introduce me. Wait? This is the blog? Ugh, so much for caring colleagues. Anyway, let me tell you a little bit about myself: 

Hometown: South Phoenix

Most embarrassing moment: I tripped and fell while running on to the set of "Where in the World is Carmen San Diego?" during a live taping

Childhood dream: Subway Sandwich Artist

Favorite word: Ricochet

Things you wouldn't have guessed about me: Discovered in a long abandoned storage unit in Bakersfield, California and sold to Julian Bongiorno for $40

Favorite holidays: I love National High FiveDay (Third Thursday in April), Movember, National Random Act of Kindness Day (February 17), Ground Hog Day (February 2)

Weaknesses: Thumb wars, ice skating, Marco Polo

Guilty pleasures: Storage Wars, Polish food

Arch Nemesis: Clippy (the Microsoft talking Paperclip)

If you would like to meet for an Arnold Palmer, go for a bike ride, or team up to dominate the American Museum of Natural History scavenger hunt, email me at [email protected]!

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A Deep Dive into Pledge Sponsorship

As we noted in a recent blog post, pledge4good has rolled out a new Group Sponsorship feature (you can see an example here: http://p4g.us/PLQ)! With this new tool, groups of friends and colleagues can collectively support an organization’s beneficiary, such as:

Education: a child, teacher, or classroom

International development: a village or well

Animals: an endangered animal or shelter pet

Health: an expectant mother or surgery recipient

Athletics: a Little League, High School or University sports team

Similar to our Pledge feature, pledge4good’s Group Sponsorship capabilities take advantage of:

Enabling friends and colleagues to share the responsibility of a $20+ monthly or $100+ sponsorship (donors can give as little as $1) so as to make the sponsorship accessible to a wider audience

Incentivizing supporters to advocate for the nonprofit and invite friends to join the Group Sponsorship via email, Facebook, Twitter, and other social networks

Providing nonprofits with an easy-to-use online platform to communicate updates with their sponsors

Join organizations such as the Nanubhai Education Foundation—whose existing Group Sponsorships of classrooms and students can be found in the “Sponsorship” tab on their profile (https://pledge4good.com/charities/nanubhai-education-foundation — and contact pledge4good co-founder Lenny Fishman ([email protected]) to learn more.

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Save Your $100K: MBA Lessons for Hackers

This past Saturday, at the Microsoft-hosted NYC BarCamp 7, I gave a presentation titled "Save Your $100K: MBA Lessons for Hackers" to an engaged audience of technology professionals. The presentation highlighted eight non-obvious, often under- appreciated lessons that I took away from my MBA (I recently graduated from UPenn / Wharton's program) and have applied to managing pledge4good in just the last few weeks! Some of the topics that I covered include: HR management, contracts, fundraising, and inventory management.

Upon the audience's suggestion, I uploaded the presentation to SlideShare (the embed is below) to make it available to others. Feel free to let me know if you have any questions (the audience had several questions about contracts and fundraising, in particular) on the topics presented, or if there are additional topics you would like me to address through this blog.

Please note that this presentation was created for an in person discussion, so many details were omitted from the slides and presented verbally. I am happy to flesh out any details you believe are relevant to you or your business on the blog or via email.

MBA Lessons for Hackers - Barcamp NYC Presentation by pledge4good

View more presentations from Pledge4Good

Questions or comments on the content? Email us at  [email protected] or  [email protected] or add a comment below.

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What's new at pledge4good.com

Our efforts to improve our easy-to-use donation tools continue! We wanted to share with you some of the exciting new features that make donating through pledge4good even more fun, casual, and social, including: 

New Pledge Parameters (by popular request) allows you to create a Pledge without personally committing a donation, but that still allows you to invite friends to donate to your Pledge

Group Sponsorship capabilities (see: http://p4g.us/PLQ) permit groups of friends to collectively sponsor an organizational beneficiary—e.g. a child, a classroom, etc.—with each individual contributing an amount within her budget

Campaign Functionality (see: http://p4g.us/campaigns/baltimore-runs) permits companies, sports teams, and School groups to centralize related-Pledges on a single community page with leaderboards, progress indicators and a posting wall

Enhanced Mobile Site (viewable from your phone by visiting www.pledge4good.com) that supports all platform functionality (iOS and Android apps coming soon…)

We hope that you take the time to explore pledge4good’s new features, create a new pledge, or join a friend’s pledge. If you have a favorite nonprofit that you think might benefit from the tools that we are building, please email us the organization’s name and let them know about pledge4good.com. Thanks again for using pledge4good and please keep the feedback coming!

Questions or comments on the content? Email us at  [email protected] or  [email protected] or add a comment below.

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What the New Facebook Timeline Means for Your Organization

If you maintain your organization’s Facebook page, you should know that Facebook just announced that they will be transitioning all nonprofit Fan Pages to the new Timeline design. To make your life a bit easier, we thought that we would quickly summarize the major changes: 

Facebook is starting to roll-out the new Timeline design on Fan Pages today and intends to complete the roll-out by the end of the week

Facebook will give nonprofits 30 days to “clean up” their Timeline profile (while Facebook users continue to see the older design)

Your Facebook Fan Pages will now have a “Cover Photo” that you can use to showcase your most important photos, murals, graphics, etc.

You can now “pin” a single post to the top of your Page for 1-week at a time to highlight the most important news to Fans

Users can now send your Fan page a private message, similar to Friend-to-Friend messaging, that you can similarly respond to privately

Visitors to your Fan Page will be provided a more personalized experience. With Timeline, Visitors will be able to see how Facebook Friends have interacted with your nonprofit (e.g. if a visitor’s Friend had shared one of your posts, this post will be featured on the Timeline for the visitor to see)

The admin panel has been simplified to (1) make tracking your fans’ interaction with your Fan page simpler and (2) help you track all your Facebook activity

For readers that have transitioned to Timeline on their personal Facebook profile, you may know that Facebook is looking to emphasize the “story” on the Timeline over the content on an “Info” tab. Following this transition, it will become ever more important for your organization to carefully curate content on your Facebook Fan Page in order to provide existing and potential donors a rich feel for your organization, mission, and impact. 

Questions or comments on the content? Email us at  [email protected] or [email protected] or add a comment below.

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pledge4good’s big game preview

If you visited www.pledge4good.com on any of the previous Sundays, you would have noticed on our activity feed several pledges tied to the success of the New England Patriots and New York Giants. In this way, each of these teams' tremendous postseason success has translated into meaningful donations as their fans celebrate each victory. Below, we are including very brief interviews with two pledge heroes, one a Patriots fan, and one a Giants fan, that created pledges tied to their favorite football team's success.

David Glattstein (Philadelphia, PA by way of Swampscott, MA):

p4g: Please tell me about your decision to create a pledge tying donations to wins by the NE Patriots?

David: I thought it was a great opportunity to be able to donate to a great cause and support something I love. pledge4good just really combined two things that I would be doing anyway, so now as I cheer for my favorite team I know I'm supporting something positive in the meantime. 

p4g: Has having such a pledge changed how you feel as a fan of the team? 

David: I don't know if it has changed how I feel, but now in addition to being really happy on Sundays when the Patriots win I'm also happy to have supported an organization that I care about. 

p4g: What is it like to have donating as a part of your regular routines?  

David: It's really just very convenient for me to donate this way. After a game, I just go to pledge4good on my phone, check-in to update my pledge, and then share my pledge on Facebook. It's almost like a much more fun monthly giving program for me. 

p4g: Prediction for the game?

David: 31-14 Patriots and Aaron Hernandez is going to be the MVP

Michael Matejek (Boston, MA by way of New Jersey):

p4g: Please tell me about your decision to create a pledge tying donations to wins by the Giants? 

Mike: Born in raised in New Jersey, I've been a NY Giants fan my entire life.  Almost five and a half years ago, I moved to Boston.  One of my fondest sports memories is watching the Giants beat the then undefeated New England Patriots in Super Bowl XLII while living here in Boston, right in the heart of Patriots country.  When I made my pledge in support of the Giants, it seemed questionable that they would even qualify for the playoffs, let alone set themselves up for an epic rematch against Tom Brady and the Pats.  Now, the G-men are just one win away from earning both their fourth Super Bowl championship and $50 for the Young Scientist Research Fund.

p4g: Must be interesting to be a Giants fan right in the middle of Patriots county. So why did you pick the Young Scientist Cancer Research Fund to donate to?

Mike: Everybody who supports science and believes that the children are our nation's future are rooting for Eli and the Giants.  All opposed, the Patriots.  Don't hate our country's children.  Root for the Giants, and join my pledge.

p4g: Prediction for the game?

Mike: Giants, 24-19.

So there you have it: two great teams playing on Sunday, with two great fans, David and Mike, using their team spirit to support two great causes in the Young Scientist Cancer Research Fund and St. Jude’s Childrens Research Hospital.  And it is not too late to create a big game pledge of your own. In fact, you can do so here.

Enjoy the game!  

Questions or comments on the content? Email us at  [email protected] or  [email protected] or add a comment below.

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Thoughts from Successful Nonprofits and Fundraisers on Online Philanthropy

pledge4good co-founder Lenny Fishman recently moderated a panel on social online fundraising at the Wharton BizTech Conference with Brian Fujito (CTO, Razoo), Patty Huber (Director, GroupOn’s G-Team), Missy Sherburne (Chief Partnership Officer, DonorsChoose), and Alec Rieger (Director of Communications & Transparency, Pencils of Promise). Although we were live tweeting—see @pledge4good—during the conference, we are providing some brief highlights here on our blog.  As the panel covered multiple topics, there is no common theme to this post other than that it highlights online fundraising strategies of two successful nonprofits—Pencils and DonorsChoose—and two highly successful fundraising platforms—Razoo and GroupOn’s GTeam deals. 

Donor activation: Brian Fujito noted that Razoo has seen significant growth in new donors on their platform by leveraging content such as “giving days” and by offering “story telling” profiles for nonprofits to explain exactly where donations are going

Donor demographics through social fundraising: 75% of donors on DonorsChoose are women and over 50% of these women have children. 80% of donors on Razoo during recent “giving days” were women, the majority over the age of 40

Interplay between corporate and individual donations: Missy Sherburne noted that corporate grants significantly influence individual donor decisions, as the validation a nonprofit receives from the corporate halo influences employees of that corporation and other individuals to give. Alec Rieger noted that he views Charity Water’s fundraising effectiveness as arising out of Charity Water communicating to donors that 100% of donations go to water-related causes since all Charity Water administrative expenses are funded by corporate donors

Moderating content social fundraising portals: Pencils has not found the need to moderate content on social networks or through social giving sites, though DonorsChoose and GroupOn did note that they moderate community content

e-commerce merchants integrating philanthropy into checkout: Patty Huber noted that 25% of those that bought a GTeam deal never purchased from GroupOn previously, implying that integrating philanthropy into e-commerce can actually enhance revenues and profit (!)

 Questions or comments on the content? Email us at  [email protected] or  [email protected] or add a comment below.

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The Value of "Influentials" to Your Nonprofit

The “influentials” model—that a select minority of people can disproportionately influence others to adopt behaviors or purchase products— has increasingly come into focus following the publication of Malcolm Gladwell‘s The Tipping Point and Edward Keller and Jonathan Berry’s The Influentials. However, does the “influentials” model imply that your nonprofit should abandon broad-based marketing efforts and instead examine your donor rolls, volunteers, and management to identify “influentials?” Not necessarily.

Professor Jonah Berger of the Wharton School, notes that the “influentials" model is dependent on four assumptions: 1) “We can identify people who 2) will influence more people to buy our product than a randomly selected person and 3) get them to talk about our product and 4) it is cost-effective to target them.”

Citing significant research, Berger argues that these assumptions have significant weaknesses. In terms of identifying “influentials,” (#1) Berger cites a few major problems, including: (A) people typically overestimate their own influence; and (B) an individual’s influence is situation specific and can change form topic to topic.

With regards to whether certain people have a disproportionate influence (#2), Berger cites several counterpoints. In a May 2010 eMarketer survey, 55% of individuals stated the recommendations of friends or similar people most influenced purchase decisions compared to 51% for experts and 26% for influential bloggers. Berger also cites a study that found that Facebook likes stayed nearly constant for a post (around 40), even as friend size increased from 400 to 1,500.

Professor Berger notes that even if the first two assumptions of the model hold, identifying and then compelling an “influential” to talk about one’s product (#4) is likely to be prohibitively expensive. For example, brands pay Kim Kardashian $10,000 per “sponsored” tweet.

Professor Berger’s conclusion is to “Ignore ‘influentials.’ Craft contagious content.” For the nonprofit sector this suggests that, while certain individuals might generate disproportionate levels of word of mouth awareness and donations for your organization, the difficulty of cost-effectively identifying and then quantifying these individuals’ impact outweigh the benefits. That is, your organization should focus on a broad-based marketing effort whose messages are both sticky and contagious, and which naturally encourage broad dissemination without relying upon the “messenger’s” influence.

In a future blog post, we will discuss how to craft sticky and contagious messages that encourage word of mouth.

Questions or comments on the content? Email us at  [email protected] or  [email protected] or add a comment below.

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Social Media’s Value Proposition: Quantifying the Impacts of Easy Word of Mouth Marketing

We recently came across a slide from a lecture by Wharton marketing professor Peter Fader regarding the value of word of mouth marketing to companies.  Professor Fader notes the following studies:

Villanueva, Yoo, and Hanssens, 2008: “Customers acquired through Word of Mouth (“WOM”) have two times the lifetime value of customers acquired through traditional marketing… [and that these] Customers … bring in twice as many new customers.”

Villanueva, Yoo, and Hanssens, 2008, and Trusov, Bucklin, and Pauwels, 2009: “Referrals through word of mouth have longer carryover and higher response elasticities.[1]”

Schmitt, Skiera, and Van den Bulte, 2011: “The average value of a referred customer [in the banking industry] is at least 58 Euros higher than [that] of a non-referred customer with comparable demographics. For the bank, this represents a return on the reward[2] given to the referrer of nearly 130%.”

Although the studies Professor Fader cites evaluate the impact of word of mouth at for-profit entities, these studies’ findings are pertinent to nonprofit organizations. The empirical research provides a compelling argument that Facebook, Twitter, and other social media represent yet to be fully tapped tools with the ability to generate valuable word of mouth for an organization’s work and cause. In turn, this word of mouth can then be leveraged to improve future fundraising efforts.

Questions or comments on the content? Email us at  [email protected] or  [email protected] or add a comment below.

[1] Longer carryover means that the customer stays with the firm for a longer period of time. Higher response elasticity means that the customer is much more receptive to marketing messages from the firm with regards to purchasing the product.

[2] Return on reward means the return generated on the bank per referral bonus or referral gift given to the referring customer.

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The First of Many Non Sequiturs: Why a Postage Hike May Not be Your Nonprofit's Biggest Problem

In our last blog post, we promised to continue our discussion of quantifying the value of a Facebook Fan, focusing on how your organization can calculate the return on investment (ROI) of a fan taking into account maintenance of your Facebook Fan page and acquiring new Fans. However, we will postpone that analysis so that we might discuss an interesting article we controversy we recently came across on the Chronicle of Philanthropy website: Charities to Lose Postage Subsidy.

The article highlights the renewed attention being brought to legislation introduced by politicians, including Senator John McCain (AZ, Republican), that call for the elimination of the postage discounts nonprofits receive for U.S. Mail. 

To many, the discounts this legislation is going after is quite significant, as Nonprofit Standard Mail rates on Basic, Carrier Route letters are 28% lower than comparable undiscounted rates.[1] Therefore, if such contemplated legislation is passed, many nonprofits argue that they can expect to see an immediate and significant impact to their development expenses via direct mail.  However, as direct mail accounts for 80% of nonprofit donations, $1.7 billion increase in postage costs for nonprofits only marginally increase overall fundraising costs for a nonprofit: less than 0.75% of total dollars raised.[2]   

However, postage IS NOT the root cause of the high cost of direct mail, but rather it is the costs of the mailings themselves. In The Complete Guide to Fund-Raising Management, Stanley Weinstein estimates that nonprofits spend $0.30-$0.42 per dollar raised on direct mail renewal, and $0.16-$0.37 per dollar donated on overall fundraising expenses.[3]   This low fundraising efficiency is entirely the results of the high cost of paper, packaging, and ink going into the mailers themselves, the staff time required for preparation, and the extremely low response rates: 3.42% for house lists and 1.38% for prospect lists in 2010, per the Direct Marketing Association.[4]

As such, nonprofits should focus on looking to eliminate expensive mailers or substitute alternative fundraising methodologies altogether.  While our expertise is in technology and this is not a discussion of technology strategies per se, we highlight the postage controversy because it truly underscores one of the most important advantages of online fundraising: lower cost per acquiring new donations. Further, with most online fundraising sites charging fees at half the level of the lower end of Weinstein’s estimates for direct mail renewal, the rationale to transition from traditional, offline fundraising methods to online fundraising tools only becomes stronger.

Questions or comments on the content? Email us at  [email protected] or   [email protected] or add a comment below.

[1] Rates refer to Letters weighing 3.3 oz. or less. http://pe.usps.com/text/dmm300/Notice123.htm#1092607

[2] http://www.foxnews.com/politics/2011/08/17/nonprofits-oppose-measure-wiping-out-their-mail-discounts/

[3] Weinstein, Stanley. The Complete Guide to Fundraising. Wiley, 2009: New York. 819-826.

[4] http://www.the-dma.org/cgi/dispannouncements?article=1451

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Valuing a Facebook Fan, Part One

On the Chronicle of Philanthropy’s excellent LinkedIn Group, a user recently asked: “How would you suggest a new non-profit increase traffic to their Facebook page to increase people who "Like' What they are about?”  With over 20 responses in only a few days, this topic certainly is popular.  However, none of these responses questioned a crucial premise of the question: whether acquiring Facebook Fan offers any true value or return on investment to a nonprofit.

With over 20 responses in only a few days, this topic certainly is popular.  However, none of these responses questioned a crucial premise of the question: whether acquiring Facebook Fan offers any true value or return on investment to a nonprofit.

Nonprofits have certainly focused considerable effort in acquiring Facebook Fans.  In fact, the 2011 eNonprofit Benchmarks Study found that in 2010 the average nonprofit had 15,053 Facebook Fans (though this figure is clearly distorted by large outliers), with this figure growing 14% monthly.  However, the study also found that on average every bucket of 1,000 Fans generated only 1.7 comments or “likes” to posts the nonprofit made on its Facebook page.[1]

  So, what is the value of Fans? And, what should a nonprofit consider paying to acquire new Fans? As it turns out, recent literature from media consultancies is either divided on the answers to these questions, often measuring the return on investment of acquiring a Fan differently. For example:

Using data for retail websites, Experian Hitwise estimates that a Facebook Fan generates 20 additional page views to a brand’s own website during the year following a users liking the brand’s Facebook page[2]

Virtue, a social media specialist, estimates that a Facebook like is equivalent to $3.60 in free advertising impressions for a brand[3]

Synapse, another media specialist, estimates that a Facebook like is worth $136.38 on average for a brand. This value assumes that a Fan spends on average $71.84 more than a non-Fan over a two year period, and also that a Fan is both more likely than a non-Fan to remain loyal to the brand and also to recommend the brand to friends and family[4]

A Millward Brown survey of 24 brands and 3,600 brand Fans found that while 85% of brands viewed a Fan as increasing brand loyalty, only 45% and 15% of brands saw Fans as increasing long and short-term spending on the brand, respectively[5]

So, what do these hugely divergent studies, primarily focused on the retail and consumer sectors, imply for nonprofits? The value of a Facebook Fan is entirely specific to your particular organization. Hence, your organization should carefully measure the exact return on investment (ROI) of all organization investment into maintaining your Facebook page and acquiring new Fans. 

 In our next blog post, we will discuss ways in which your organization can calculate this ROI and better understand the value of acquiring Facebook fans.

Questions or comments on the content? Email me at  [email protected] or add a comment below. 

  [1] http://www.e-benchmarksstudy.com/

[2] http://weblogs.hitwise.com/robin-goad/2011/06/1_facebook_fan_20_additional_v.html

[3] http://www.adweek.com/news/technology/value-fan-social-media-360-102063

[4] http://adage.com/article/digitalnext/question-a-facebook-fan-worth-marketers/144437/

[5] http://www.adweek.com/news/technology/true-value-facebook-126137

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The Door to the Donation Process: The Donation Button

Without question, the “Donate Now” button is the most important item on your website as it drives prospective donors to your donation page. Today we offer some tips on the design and placement for the “Donate Now” button on your website.  While several tips may seem self-evident, we wanted to highlight the full lists as many organizations employ alternative approaches that may not prove as effective:

Amazon and other top e-tailers always put their shopping cart checkout button at the top right of all pages. As web users have grown accustomed to this norm, nonprofits should adhere to this standard and also place the “Donate” button at the top of the screen. For the avoidance of doubt, place the button above other items in the navigation bar (i.e. bar including “About Us,” “Programs,” “Contact,” etc.).

Place the “Donate Now” button on every page of your site (with the sole exception of the actual donation page itself since this could cause confusion) 

 Also place the “Donate Now” button on your blog, as part of the signature in your organization’s emails, and in your newsletters

Make the “Donate” button LARGE

Shade the button with a color that provides high contrast to the rest of your page so that a prospective donor’s eyes are naturally drawn to the button.  As a frame of reference, Google shades the first few search results – these are paid search results – in yellow in order to drive traffic to its paying customers’ websites.

Test the look of the “Donate Now” button across browsers and mobile phones.  Remember that all browsers render pages differently, so test the look in Internet Explorer, Safari, Firefox, as well as on the iPhone, Android, and Blackberry, at a minimum.

Periodically check that the link to your organization’s donation page works. This is especially important if your organization hosts its donation page on a third-party website because third-parties may occasionally modify their website, potentially rendering the link your organization uses as stale. 

Questions or comments on the content? Email me at  [email protected] or add a comment below.