The hype and potential of social networks
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Justin Perkins of Care2 and creator of frogloop.com, Care2's nonprofit marketing blog, shares his experience in working on over 100 nonprofit campaigns to recruit millions of people online. In light of recent hype of social networks such as facebook and twitter, this presentation gives a reality check by calling out the hype, and placing social marketing in context with a broader online strategy. Perkins shares three key principles of online marketing and fundraising: 1. Be prepared to be lucky. 2. Use the right tool for the purpose. 3. Put your supporters first. This presentation also encourages nonprofit fundraisers and campaigners to focus their precious resources on efforts with the highest Return on Investment, which in the case of online fundraising, is still via email, more often than not.
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The hype and potential of social networks
- 1. The Hype and Potential of Social Networks “One Million Dollars…” Justin Perkins Director Nonprofit Strategy justin@care2team.com twitter: @elperko
- 2. Are you ready to reach 100,000 supporterstomorrow morning?
- 4. Three Principles of Online Fundraising 1. Be prepared to be lucky 2. Right tool for the right purpose 3. Meet the needs of your supporters
- 5. LUCK
- 6. “Luck happens when preparation meets opportunity.” —Oprah Winfrey, most famous talk show hostess, ever
- 9. Did not grow their email list by over 100,000
- 13. To Do: Get Ready to be Lucky If an opportunity or crisis happened tomorrow, could you reach enough people to help? frogloop.com/benchmarks
- 14. TOOLS
- 16. $47,000 $570
- 18. OPPORTUNITY COST = Better or more profitable opportunities you miss choosing to do something else with your time or money.
- 19. EMAIL $415,000 raised in 1 week vs. Facebook Causes $28,000 raised in 1 year
- 20. “If an investment does not have a positive Return On Investment, or if there are other opportunities with a higher ROI, then the investment should be not be undertaken.”
- 21. RETURN ON INVESTMENT (ROI) = (Gain from Investment – Cost of Investment) ------------------------------ (Cost of Investment)
- 22. Hint: You can raise 50-200 times more money via email than through an equivalent social network list.
- 24. Email list Phone list Direct mail list Social media “friends” Mobile phone list
- 26. To Do: Choose the Right Tool Make a list of your goals, first, and then choose the most proven tools to reach that goal. Frogloop.com/benchmarks
- 27. Supporters
- 29. “Motivation is the art of getting people to do what you want them to do because they want to do it.” – US President Dwight D. Eisenhower
- 30. Meet Three Human Needs: 1. Connect with a group 2. Have voice heard 2. Create and be creative
- 34. Tell stories
- 37. The Supporter is the Hero
- 38. Keep it Personal
- 39. Make global problem local
- 40. Fulfill the supporter’s needs
- 41. Make People Feel Good
- 43. To be creative?
- 44. To have one’s voice heard?
- 46. Three Principles of Online Fundraising 1. Be prepared to be lucky 2. Right tool for the right purpose 3. Meet the needs of your supporters
- 49. Contact Justin Perkins Director Nonprofit Strategy justin @ care2team.com twitter: @elperko skype: justinperkins
Editor's Notes
- What if you were to wake up tomorrow and hear that a natural disaster had wiped out Haiti, and your organization needed to raise millions of dollars to help with aid efforts? Would you be ready? Or what if you worked for a major environmental nonprofit and a major shift in public consciousness was about to create a major opporunity to push through important legislation on climate change, triggered by Inconvenient Truth – a popular documentary? Would you be ready? What if a major donor called your organization tomorrow and said “I will provide $100,000 for your organization, provided that you raise $100,000 from grassroots supporters.” Would you be ready? Would you be ready to push a button tomorrow and reach a critical mass of people who care about your issue – whatever it may be – and who would actively be engaged. That is both part of the hype, and the potential of social networks. Hype – because there has been a gold rush to raise money directly from social networks – and I’ll tell you why that doesn’t work in the presentation. Potential, because by having a list of supporters built – across all mediums – increases your chance of capitalizing on moments when you need to.
- In 2004, long before peer-to-peer fundraising tools were available online, Care2 got a call from American Humane, an animal rescue organization in the US. 5000 donors and $205,000 in one week.
- After seeing hundreds of online campaigns and four and a half years of working for Care2 – which is the largest online social network of people in the world who care about the environment and social justice -- these are the three most important pieces of advice that I’ve gathered. In this presentation, I will take a high-level approach to explaining the principles behind the strategies of the top nonprofits that work with Care2, and why they have the most robust fundraising systems. I will encourage you to “be prepared to be lucky” - an adage that nearly every successful brand has experienced. I’ll encourage you to lead with strategic thinking instead of just grabbing every new shiny toy that becomes available on the market, or following the herd just because it’s the latest thing to do. And I’ll share with you the secret that the smartest campaigners – at Care2 and the top NGO’s – understand and meet the needs of your supporters. If you lead with your organization at the center of the message, you will stay small.
- In 2006, Muhammad Yunus won the Nobel Peace prize and finally put the concept of Microfinance on the map in the mainstream media. One microfinance NGO that I happened to know about had an amazing opportunity to capitalize on this news, and to ride the coinciding media exposure that Kiva was smartly earning in the news for the concept of funding microloans to small projects overseas. (MuhammedYunus photo)
- Despite having a dedicated online grassroots marketing and fundraising team with two managers, a director, and a Vice President, this opportunity to not only grow future capacity, but to earn short-term revenue, was missed. Instead of being prepared, or spending money on what works, this NGO’s employees were more concerned with playing it safe, preserving their jobs, and paradoxically got caught up in the social media gold rush and spent their time being busy with experimental mediums – spending hours and hours trying to set up and maintain social network profiles to try and drive traffic to their website and drive donations and email signups through seemingly “free” means. They were scared to push the envelope and do what it takes to meet the mission, and they were playing it “safe”.As a result of this missed opportunity, here’s what didn’t happen:They didn’t raise over 100,000 from sending three emails in a weekThey didn’t grow their email list by 100,000 people in a year through leveraging their list and paid advertisingThey didn’t prepare their organization to make recurring annual revenue of $100,000-$400,000They didn’t end up developing a significant new fundraising stream that could have translated into helping 1,000-4,000 more entrepreneurs/ year in the developing world (fulfill their mission)Make back a significant part of their investment of both time and paid advertising in a matter of weeks instead of 3-4 years(SAD FACE – empty pockets)
- As campaigners, we tend to be the keepers of the organization’s mission. We tell the stories and introduce our activists to the people they’re helping.
- If we aren’t doing our jobs properly, we’re missing out on an opportunity to achieve our mission, and people like these street kids in Brazil that I met many years ago don’t get helped.
- Here are a few of the top nonprofit organizations in the US and the corresponding size of their email lists as a fraction of US Population. This is what’s possible. Take a look at your organization, and then estimate the size of your email list as compared to the population of your country. Then, get more specific. Do a quick google search and find some data about the size of the population of the specific demographic that you’re trying to reach. For example, at Care2, we estimate that there about 50 million people in the US that tend to be what we call Cultural Creatives, LOHAS, or Conscious Consumers. We have about 13 million members in our community, and about 6 million people that have signed up to our email lists. That means we can email about 12% of the population that we’re trying to reach. It also happens to be the population that many nonprofits are trying to reach, and as a result, we have been able to help over 500 organizations recruit millions of people over the last 10 years.
- In each section of this presentation, I have a simple take away for you that’s in the form of an action. When you get off this call, have a look at one of the latest benchmark studies that have been published for the nonprofit sector, and see where your organization compares. You can find most of the latest benchmark studies on Care2’s blog for nonprofit marketing, advocacy and fundraising, frogloop.com. The articles tagged with reviews of the benchmark studies are aggregated under the urlfrogloop.com/benchmarks. Once you know how you compare with similar organizations, it’s time to assess the tools you’re using. Are you just following the hype? Or are you really following best practices and using the right tool for the right purpose.
- Over the last four years there has been a lot of herd mentality when it comes to social networks and fundraising. Look before you leap. I would estimate that there has been hundreds of millions of dollars, counting staff hours, that has been invested in chasing fundraising on social networks, however, for every $100 spent, there has only been about $1.00 raised. This is what my MBA professors would call a bad investment.
- Last year, I engineered a study of Facebook Causes – a peer-to-peer fundraising tool – in hopes of seeing what was possible. I looked at all of the Causes with more than 20,000 members in hopes of seeing a correlation with size of the group and the amount of dollars raised. I was pretty shocked. The median dollars raised from all of the causes with over 20,000 members was only $570. -The groups that managed to raise more than $100,000 had some sort of gimmick-the group with the largest Cause a few weeks ago got there because the CEO donated 999,999 dollars.I did a similar study about 6 months after Facebook Causes launched and the trend was the same. And the story gets worse. Even of the top Causes, 50% or more of the entire amount is often donated by the top 5 donors, and even then, it’s often the top donor, who is usually an employee or board member, who accounts for the majority of the 50% of donations. Contrast that with the median $ raised from nonprofit organizations using an email fundraising strategy – it’s about $47,000 per year.Right tool for the right purpose. Social networks are proving to be great listening mechanisms for brands, and a way to engage with people on their terms. However, peer-to-peer fundraising in the context of social networks doesn’t work unless there’s some sort of gimmick – an outside factor such as a contest, a birthday widget, or perhaps a pledge drive for Cancer. The data do not support that social networks are the holy grail of fundraising because you need some sort of social permission to ask people for money. It’s just a tool.
- This is a term that has been twisted by many a consultant in the last couple years when it comes to social media and thrown around more and more in the nonprofit sector. It’s actually a very simple mathematical formula that can be used to calculate a ratio, but it’s not the same as Profit. For example, if you had two choices for spending your time or money, you’d look at the results from running both choices through this equation. If one choice yields an ROI of 50%, and another yields an ROI of 100%, you should probably go with the the latter choice. Of course there are other variables to consider such as how long it would take to make back the investment and how much cash or capacity it would actually take, but I’d highly encourage you to look before you leap and make some estimates based on publicly available data. If you were going to invest your own time or money as a campaigner or a development director – vs. having someone else paying for it – you’d probably do this type of estimation. That doesn’t mean you should test new concepts – absolutely. But you should also look at publicly available data and ask leaders in the field to see what’s possible before committing to a tool or flawed strategy.
- This is pretty clear – if you ask any of the top fundraisers online, you’ll probably hear that email is king. There is a strong correlation between the size of your email list and how much traffic drive to your website and how much money you’ll raise online. A friend of mine who is now a consultant with M+R – one of the leading online fundraising and advocacy agencies – and who used to run the head of digitial fundraising at Amnesty International went so far as to say “your website doesn’t matter.” I would suggest to you that if your organization spent as much money developing a solid email strategy and promotional strategy as it did in yet again redesigning the website or rebranding, your fundraising program would soar. Your website obviously matters, but not that much. Most people are not looking for you online, which is why having the ability to reach people where they are – on email and on social networks and nowadays cell phones – is key.
- Fish where the fish are
- The groups that I have worked with who are starting to coordinate their efforts across these mediums, and are preparing that infrastructure now, will have the first-mover advantage in the marketplace. This is the holy grail. At Care2, we’re starting to do some really interesting campaigns where we leverage our members activism and interest to reach Facebook and Twitter. We grew our MySpace presence when it was popular very quickly. Leverage email – the original social network – to reach other channels. It’s easy to match data with email addresses. Fish where the fish are – don’t build your own social network. Whatever you do, please do not build your own social network unless you have a very clear understanding of online community behavior, have at least 1 million people on your email list, or a very defined niche of people you’re trying to connect, such as a private network for people with a specific disease and just need a platform for an existing community of people to easily share information and communicate. If your organization is considering implementation of Ning or another social network tool on your site, start with a free blog, or a Facebook group, as free tests, FIRST. You will quickly see how engaged your community is, and if you have enough of a critical mass to make it interesting. Use the rule of 99:1 – for every 99 people who sign up for a social network, only 1 will be active.
- -The hype and the potential of social networks is word of mouth marketing-This rarely happens, however, unless you follow a few key principles - tell interesting stories – I’ve seen so many campaigns fall short of going viral because they just weren’t that interesting -develop a critical mass – MySpace and Care2, for example, didn’t really start to go viral as social networks until they had about 1 million people – for nonprofits, that can obviously be smaller than what is needed for a general audience, but be aware of the potential universe of people that you’re trying to reach, and be realistic about whether those people are even on social networks, and if they are, be strategic about how you reach them.
- Take a second to read this comic. Made me laugh out loud. You’ve got to compel your supporters with interesting content. Choosing the tools and doing the work is the easy part. What will make you stand out from the noise on the internet? What will compel people to sign up for your Cause or your email list? What will inspire people to donate? Are you putting your supporters first, standing in their shoes, and thinking about what they want? That’s what the best brands and business and nonprofits do – they meet the needs of their supporters, first, instead of leading with the needs of the organization. It’s a very important difference.
- Maslov’s hierarchy of needs – first two are basically food and shelter. These are the higher level needs that we have as human beings, and to some extent, social networks have spread so quickly because they provide a platform for meeting these needs. As fundraisers and campaigners, we can use these three simple principles for every message that we send to our potential donors or campaigners. Most of the people you’re trying to reach already have their basic human needs met, but most of us are searching for meaning, and you have an opportunity to serve as a conduit for helping people find meaning. That’s a vastly different paradigm to work from, but I think it’s part of the secret to why Care2 has grown to 13 million people from 5 million people in the 4 years that I’ve been involved.
- Need to be creative
- Need to raise your hand in public and have your voice heard.
- Make sure to place your campaigners in the story.
- It’s super important to put your customers at the center of your campaigns. You need to make them feel like they’re the heros.
- This could be you mother or grandmother. Tie it into the campaigner’s life – put a face to the problem – make it personal and something that someone in their family or community can be affected by. By making it personal, the activist will be more inspired to do something – to be a hero.
- Stats are usually glossed over, but the personal story helps put a face to the larger problem. If you’re going to use stats, you must tie it to a specific example like
- It’s a basic human need to feel fulfillment and to be part of a group. Draw the activist in to be a hero – you’re providing a service by connecting them with a way to make a difference, just as much as they’re helping your organization.
- Care2 has spent millions of dollars and 10’s of thousands of hours testing our email formatting. Please steal from us freely. By signing with a personal note, accompanied by a real human’s face, it’s a seal of approval that this is a sincere action. As campaigners, our job is to make people feel good – not just to play with data and email lists. So many people get the basics wrong. These emails are designed to be personal and make people feel good. An informal approach with a thanks is more personal. As evidence of these photos being important, our Campaigners become celebrities. When we do presneations at Greenfest and other conferences, we often have Care2 members come up to the booth and ask for our campaigners, or treat them like rockstars when they meet them. If you make it your goal to put your activists at the center of your messaging in a personal way, and craft your action alerts as stories, you’ll do wonders for your brand and the results of our campaigns. Small percentages mean a lot when you’re talking about large volume messaging programs. .1% can mean 10’s of thousands of dollars. Make it count.
- Read the last message that you wrote and sent to your list or posted on twitter or facebook. Did it tell a story? Did it make the reader ask the question: “what happens next”. Who was the hero in the story – you, or the reader? Did the message meet any needs of the reader – the need to connect? The need to have a voice? The need to be creative? Did you say “please help…”
- Stop for a moment and visualize the last civic protest or demonstration that you witnessed or participated in? Or the last time you felt compelled to donate to a cause? What did it feel like? What emotions did you feel? Powerful? Heroic? Important? Think about the role that the organizer played? Do you even remember who the organizer was, or was it more about you, as the activist? As an organizer, you’re creating an experience. You don’t always have the advantage of real life events, but you have the tools to tap into the same emotions. That is the potential of online social networking - more than ever before we have a way to engage people on their terms and help them to feel like they’re part of the solution, an owner of the solution, not just an ATM machine or just a number on an email list.
- Don’t forget to keep the end goal in mind when you’re making decisions of where to spend your time and budget.
- -you can find more information on Care2’s blog, frogloop.com. I launched this a couple of years ago when I started at Care2 as a way to share best practices with the nonprofit sector. We now have a great fulltime editor who solicits guestbloggers on a huge variety of topics related to efundraising, advocacy and online marketing.- -if you are considering an investment of staff time or money in social network fundraising, you can do some preliminary investigation through using the online calculator that I put together. It will enable you to assess what’s possible for your unique situation before investing a considerable amount of time. I also have some other online assessment tools available if you email me.
- My day job is to help nonprofits grow their online capacity. I’ve had the privilege to work with over a hundred nonprofits in the last four years, and to see a variety of trends in the nonprofit sector. If your organization has a need to grow a grassroots donor base, I can help you do that very efficiently with the help of the supporter recruitment program that Care2 helped to pioneer over the last ten years. We have a very knowledgable staff of people who have spent their careers in the nonprofit sector and have the unique perspective of helping hundreds of organizations recruit millions of people each year. Almost all of the major nonprofit organizations who do a significant amount of online marketing have worked with Care2 to recruit thousands of supporters.