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Popular Facebook app: All talk, little cash

by | Apr 22, 2009 | Facebook | 0 comments

By Kim Hart and Megan Greenwell
It seems foolproof: nonprofits using the power of the Internet to raise money through a clever Facebook application. After all, the Web earned gobs of cash for Barack Obama’s presidential campaign. And besides, going online means sending fewer fundraising letters, which makes it appealing to penny-pinchers and environmentalists alike.
But it turns out that approach doesn’t always work. The Facebook application Causes, hugely popular among nonprofit organizations seeking to raise money online, has been largely ineffective in its first two years, trailing direct mail, fundraising events and other more traditional methods of soliciting contributions.
Only a tiny fraction of the 179,000 nonprofits that have turned to Causes as an inexpensive and green way to seek donations have brought in even $1,000, according to data available on the Causes developers’ site. The application allows Facebook users to list themselves as supporters of a cause on their profile pages. But fewer than 1 percent of those who have joined a cause have actually donated money through that application.
The data conflict with the lessons many nonprofits took from Obama’s presidential campaign: that a well-run organization could raise huge amounts of money online. The problem is, nonprofit fundraising requires considerably more outreach than many political campaigns, which do not require as much relationship-building because they revolve around highly visible candidates.
Research shows that Internet and e-mail are generally considered the least successful nonprofit fundraising techniques, according to a report by the Center on Philanthropy at Indiana University.
“The prevalent fantasy among nonprofits during the early days of the Web was that a random person would come to your Web site, see that they could donate, and donate a million dollars,” said Aaron Hurst, chief executive of a California nonprofit, who has blogged about the ineffectiveness of Causes. “But that wasn’t true then and it isn’t true on social networks.”
Since it was launched in 2007, Causes on Facebook has become the leader among a growing number of social networks — including Twitter, MySpace and Gather — used by nonprofits, which have been forced to find new ways of developing resources as contributions from wealthy donors and foundations decline during the recession. Causes is free for nonprofits but it costs them staff time to develop and maintain.
Data available from the Causes developers on Facebook show the application’s meteoric rise since its founding. More than 25 million of Facebook’s 200 million worldwide members have signed on as supporters of at least one cause, making it the third-most popular of the more than 52,000 applications on the site.
But just 185,000 members have ever contributed through the site, which sends credit card transactions on Facebook to the Bethesda-based Network for Good to distribute. The median gift through Causes is $25. The majority of Causes’ participants have received no donations through the site.
The median charitable donation through more traditional means is $50, according to the Center on Philanthropy.
The idea behind Causes was to take advantage of the vast circles of online friends connected through social networks to reach potential donors and volunteers on a more personal level. People will donate money, albeit in small amounts, to help a cause that a close friend or colleague supports, the application’s developers say.
“People are much more altruistic if they get social credit for it,” said Joe Green, one of the founders of Berkeley, Calif.-based Causes, who said the application has raised $7 million overall. “The social incentive is to show on your profile how many volunteers you’ve recruited or how much money you’ve raised.”
Green acknowledged that the amount of money raised per member is not large. But he said that Causes allows small groups to raise money they otherwise wouldn’t.
He said Causes raises almost $40,000 a day across its groups, up from $3,000 a day a year ago. “The biggest successes have been tiny nonprofits who don’t have the name recognition of the big guys.”
But in the majority of cases, that theory hasn’t translated into significant dollars. Fewer than 50 of the 179,000 groups on Causes have raised $10,000, and just two — the Nature Conservancy and Students for a Free Tibet — have cracked the $100,000 mark.
Hurst jumped on the Causes bandwagon shortly after it launched. The chief executive of the San Francisco-based Taproot Foundation, which recruits professionals to perform pro bono work for nonprofits, he figured creating a Causes page would bring in plenty of new donations. Taproot spent about $3,000 in staff time developing the page, Hurst estimates.
Six months later, Taproot’s Causes page had netted $30, all from existing donors. The group’s page still exists, but the staff has largely abandoned its upkeep.
In 2007, Eric Ding, a Harvard postdoctoral researcher, used Causes to create the O Campaign for Cancer Prevention, which raises money for cancer research at a Boston area hospital. The group now has 4.6 million members and has raised nearly $85,000, less than 2 cents per member.
Nevertheless, Ding, 26, was very satisfied with the effort. “That’s a lot of money that didn’t exist before,” he said, “especially with recent funding cuts for cancer research.”
Alan J. Abramson, an expert on philanthropy at George Mason University, estimates that less than 3 percent of all fundraising is done online. “Nonprofits raising money through the Web is growing, but it’s still pretty small,” he said.
Even e-mail campaigns are generally more likely to raise significant amounts of money than Causes, according to a comparison of Facebook’s data with widely accepted philanthropic benchmarks. Those data show that 1 percent to 3 percent of a nonprofit group’s e-mail list would donate money when solicited, at an average of about $80 per person. That would have brought Ding’s cancer research group $3.7 million, more than 44 times what he made on Facebook.
For the Nature Conservancy, which is the top fundraiser on Causes with $198,000, social networking was never primarily about raising money. The group has four staff members devoted to representing it on social networks, but uses Causes mostly to circulate news stories and event announcements.
“I definitely think it’s first and foremost a tool for brand and reputation,” said Sue Citro, the group’s digital membership director. “It definitely does more for influence than for fundraising.”
For Washington resident Elliott Bisnow, who concluded a weeklong fundraising campaign for Nothing but Nets on Twitter and Facebook two weeks ago, social networking was an experiment in recruiting friends to a cause that he’s passionate about: preventing malaria by distributing mosquito nets to African children.
About 280 people donated a total of $8,000, far less than Nothing but Nets collected at a recent fundraiser, but more than Bisnow could have donated himself.
“It’s an experiment that shows social media is a great way to touch more people,” he said, “but it may have a ways to go in terms of raising money.”
2009 The Washington Post Company