Friday, September 3, 2010

Non-Profit Fundraising and Social Media.

The economy is still in a poor state, and while it is a time to try and remain hopeful and hard working on the road to recovery, those that appear to be the worst hit are the nonprofits. When the economy suffers, there is understandably less money to go around, especially to organizations that depend on donations to stay afloat. These funds go toward a wide array of issues including medical, environmental, and homeless and in a situation where funding is stagnant, the people who receive assistance in these areas are the hardest hit. There are fears that things will only grow worse in this changing and shifting economy.

Back in March, an article in the San Francisco Chronicle referred to the economic woes faced by local nonprofits as the 2010 nonprofit “Armageddon.”

Hardest hit will be the Bay Area, home to one of the highest concentrations of nonprofits in the nation. There are 25,000 nonprofits in the region; 7,000 in San Francisco alone. Among them are 10,000 charitable nonprofits with budgets above $25,000. Their combined budgets account for 14 percent of the Bay Area’s gross national product – twice the national average.

Many are teetering.

California is by far not the only region whose nonprofits are affected by this current climate. Across the nation groups are struggling to find ways to stay afloat. In Washington, D.C., organizations have been turning to new methods of attracting donors and raising funds. According to an article in the Washington Post in August, GuideStar USA, an organization that tracks finances of nonprofit groups, suggests nonprofits are doing all they can to weather the storm.

“The bottom line is that individual giving drives philanthropy,” said Chuck McLean, GuideStar’s vice president of research. McLean said that about 10 percent of giving typically comes from foundations and 90 percent from individuals.

McLean said there were two strategies successful nonprofit executives have been employing to hold things together during the extended economic downturn. First, he said, they are raising money with new ideas. “A lot of the organizations that are doing pretty well said that maybe they are doing a silent auction or something they’ve never done before … They’re trying new and different things,” he said. And when they do receive donations, he said, they treat donors like a good business treats its customers.

Time and time again it comes down to the fact that in hard economic times, nonprofits need to reevaluate their strategies and methods for outreach and fund raising. These days, when methods for communications are changing on a daily basis, it makes sense to leverage these new tools for those aspects. According to the most recent studies, this is not necessarily the case.

In a recent article from PR Newswire titled, “Who Gives, Why Do They Give, How Do They Give to Nonprofits?” the author discusses the results of a “new research study that was released Tuesday that may change the way many nonprofits approach their fundraising budgets.” The report seemed to indicate that while social media is useful and new in reaching a portion of their target demographic—younger donors—it is currently not the most efficient means to garner funds based on their polling and analysis. The article puts forth the following analysis:

As many would expect, the study finds that today’s most valuable donors – boomers and older donors – primarily give through the mail. But those in the 25-54 age range tended to give both online and through the mail. “One thing we find interesting is this nexus in the 25-54 year old group,” said Lisa McIntyre, Russ Reid Senior Vice President, Strategy Development. ”The donors who will be most important to us in the coming decade seem equally facile with both mail and online.”

This touches upon an aspect of social media that many in the industry seem to forget. Social media is not the “end all, be all” of outreach. Its primary use is as a way to facilitate communication and support your key efforts. A man cannot survive on bread alone, and an outreach campaign cannot survive on social media alone; it must work in tandem with other efforts. That being said, it is still a useful tool that is growing in necessity. This is increasingly true as the technology and techniques become more sophisticated and refined.

According to a recent press release, companies Ventureneer and Caliber have partnered to perform an audit by way of a survey of what the majority of nonprofits are doing in the realm of social media with the intent of sharing which social media activities are most effective by nonprofit sector, size of organization, and purpose.

The results of this survey will be used to discern and develop the best practices that can be shared and passed from nonprofit to nonprofit. This same type of project, polling to pull the best practices regarding new outreach methods, seem to have already been utilized or in the works as part of various efforts including nonprofit outreach and “government 2.0” efforts. As the technology and integration develops these best practices will be more like a living ideal that will change with the times.

New technologies and methods are springing up every day. According to a recent press release from Blackbaud, Inc., a provider of software and services designed specifically for nonprofit organizations, the company has announced the launch of Blackbaud SocialTM, to provide social media solutions for nonprofits to create both private-label and public socially-enabled communities. According to the press release, “it is the only integrated social platform that offers organizations an easy way to extend their mission, access user data, and leverage it for meaningful constituent engagement.”

This is one of many new developments I suspect will enable nonprofits to leverage social media to target those audiences they have been missing. New sites, aggregators, organizers, and applications are being developed daily. To write off social media for reasons of fear or false return on investment (ROI) results is premature. Last month, my colleague Tiffany Refuerzo wrote a great interview piece with “The Generation Project” who developed an entirely web-based philanthropic model which has been shown to be more efficient and effective at connecting donors with their impact. Earlier in that same month I posted an entry regarding government agencies and social media. In that entry I mention that the United States government, which looked at in a certain way can be seen as a giant “non-profit,” has already established a policy surrounding the use of social media and discussing how important it is in keeping connected with the community. Both of these entries touch on one of the most important aspects of social media; connectivity. With its ability to quickly and efficiently connect donors with their causes and the impact of those donations, social media is an investment in the long term. This connection that is established creates a closer relationship between all involved in the philanthropic process, increasing the likelihood of returning donors. The lesson to learn here is not that social media is the one thing that will save nonprofits and bring them their own personal bankroll. But it will help with efforts in the long run and should be a necessary part of any outreach strategy.

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