Table of Contents
Title Page
Copyright Page
The AFP Fund Development Series
THE ASSOCIATION OF FUNDRAISING PROFESSIONALS
2009-2010 AFP PUBLISHING ADVISORY COMMITTEE
Dedication
Introduction
About the Editors
PART I - Effective Management and Leadership Tools
CHAPTER 1 - The ROI of Social Media
SOCIAL MEDIA ROI-A NEW APPROACH
THE ART OF LISTENING
LEARNING FROM MEASURING
REITERATE AND ADAPT
CONCLUSION
CHAPTER 2 - Path to Managing Your Organization Using Online Tools
FRANK INTRODUCTIONS
GO LEFT; NO, GO RIGHT
WHEN IS IT SAFE TO GO DOWN THAT ROAD?
KNOW THY CLIENT
WHEN PERSONABLE IS GOOD
WHO WANTS TO PLAY IN MY SANDBOX?
EVERY BLOG COUNTS
ARE YOU HEARING ME NOW?
I LOVE ITALIAN, AND SO DO YOU
SHOW ME MY MONEY
KEEPING UP WITH THE JONES
EXCUSE ME, DO YOU HAVE THE TIME?
ONE FOR YOU, ONE FOR ME; TWO FOR YOU, AND ONE, TWO FOR ME
WHOSE SANDBOX IS THIS?
GOVERNANCE—WHAT IT TAKES TO GET THERE
IGNORE THE MAN BEHIND THE CURTAIN
THERE’S NO “I” IN “TEAM”
STRENGTHS AND WEAKNESS—CUE THE MUSIC
PROJECTS, PROJECTS, PROJECT MANAGER
RISKS OF AN ONLINE STRATEGY
IT’S NOT AN ILLUSION BUT MAGIC
YOU HAVE THE RIGHT TO REMAIN SILENT
WHY TECHNOLOGISTS GET PAID THE BIG BUCKS
CHAPTER 3 - E-governance Is Good Governance
WEB 2.0 ENTERS THE BOARDROOM
E-GOVERNANCE IN THE NON PROFIT SECTOR: WHAT’S HAPPENING NOW?
SUCCESSFULLY IMPLEMENTING E-GOVERNANCE
E-GOVERNANCE AND BOARD ENGAGEMENT: WHAT TO EXPECT
CHAPTER 4 - Social Collaboration and Productivity
THE WEB 2.0 LEXICON
WEB 2.0 TOOLS FOR SOCIAL COLLABORATION AND PRODUCTIVITY
SOCIAL NETWORKING GROUP FUNCTIONALITY
DEDICATED COMMUNITIES FOR YOUR CAUSE
ENCOURAGING ADOPTION OF TECHNOLOGIES
STAYING ON TOP OF DEVELOPING TECHNOLOGY
CONCLUSION
CHAPTER 5 - Insight Tools for Surviving and Thriving
DON’T PANIC-THERE’S GOOD NEWS
TIME FOR A MIND SHIFT
FOCUS ON THE NEW ROI
LOYALTY-THE HOLY GRAIL OF FUNDRAISING
NEXT, FOLLOW THE DOLLAR
THE ONE LOYALTY MYTH TO AVOID
ENOUGH THEORY-WHAT DO I DO?
SURVEYING AND BENCHMARKING LOYALTY
THE VALUE OF LOYALTY-INSIGHT TOOLS
INSIGHT TOOLS FOR SOCIAL MEDIA AND THE ONLINE WORLD
AT LAST! EXPECTATIONS DELIVERED
INSIGHT TOOLS FOR WEB MONITORING-A CRASH COURSE IN WHY, WHAT, AND HOW
IDENTIFY AND INVEST IN THE RECRUITERS
IDENTIFYING THE RECRUITERS
CONCLUSION
CHAPTER 6 - Demystifying Online Metrics
METRICS OVERVIEW
WEB SITE METRICS
E-MAIL METRICS
ADVOCACY METRICS
SOCIAL MEDIA METRICS
ONLINE FUNDRAISING METRICS
BENCHMARKS
METRICS CULTURE
CONCLUSION
PART II - Managing Fundraising and Building Communities Online
CHAPTER 7 - Managing Fundraising and Building Communities Online
FUNDRAISING ONLINE
CONCLUSION
CHAPTER 8 - The Nonprofit Leader’s Volunteer Recruitment and Retention Strategies
HISTORICAL PERSPECTIVE
THE UNIVERSAL BENEFITS OF VOLUNTEERING
INCREASED CHALLENGES FACING NONPROFIT ORGANIZATIONS
WHAT’S OUT THERE?
YOUR ORGANIZATION’S NEEDS
CREATING YOUR MIX
PROFILE OF A TYPICAL NONPROFIT ORGANIZATION
IMPLEMENTATION
EVALUATION
NONPROFIT MANAGERS’ CHALLENGE
APPENDIX 8A - Highlights of America’s Philanthropic and Volunteering Heritage
APPENDIX 8B - Creative Marketing Example
CHAPTER 9 - How Successful Are Your Social Media Efforts?
CONDUCT A SURVEY
USE COMPETITOR AND PARTNER DATA
FINDING AND ENGAGING A CHAMPION IN LEADERSHIP
MAKING THE VALUE CASE FOR SOCIAL MEDIA
LISTENING : THE KEY TO SOCIAL NETWORKING SUCCESS
LEVERAGING YOUR SUPPORTERS TO INCREASE ENGAGEMENT
PLANNING YOUR OUTREACH AND ENGAGEMENT CAMPAIGN
MEASURING YOUR IMPACT
REFERENCES
CHAPTER 10 - Social “Trusumers”
THE HIDDEN GATE
THE TRADITIONAL FUNDRAISING PYRAMID
THE NEW FUNDRAISING PYRAMID
WHO ENTERS THROUGH THE NONFINANCIAL GATE?
WHAT ARE SOCIAL TRYSUMERS LOOKING FOR?
DIGITAL PARADIGMS
SOCIAL TRYSUMERS AND THE FREE-EXPERIENCE ERA
FREE EXPERIENCES AND SOCIAL TRYSUMERS-SOME KEY RESEARCH
BUILDING SOCIAL TRYSUMER DATABASES
ONE LITTLE STEP FORWARD-THE CONVERSION FROM SOCIAL TRYSUMER TO DONOR
SOME DETAILS TO CONSIDER
COMPARISON WITH OTHER RECRUITMENT TECHNIQUES
SOCIAL TRYSUMER CASE STUDIES
MOBILE SOCIAL-TRYSUMER CASE STUDIES
IF THE PYRAMID CHANGES, SHOULD FUNDRAISING CHANGE?
A WHOLE NEW ORGANIZATIONAL MODEL
CONCLUSION
ACKNOWLEDGMENTS
CHAPTER 11 - Social Networks
WHY THIS TOPIC?
LEVERAGING MY SOCIAL NETWORK FOR THIS CHAPTER
CONTROLLING THE CONVERSATION AND YOUR BRAND
GLOBAL COMMUNITIES
ELEPHANT IN THE CHAT ROOM-HOW SOON CAN YOU FUNDRAISE?
WHO HAS TIME FOR THIS?
WHAT ARE THE RISKS?
CONCLUSION
CHAPTER 12 - Prospect Modeling, Prospect Research
ONLINE GIVING ANALYTICS AND COMPREHENSIVE FUNDRAISING
VITAL DATA OR DATA WITH VITALITY ?
THE WORLD OF THE POSSIBLE—STATISTICAL METHODOLOGIES AND APPLICATIONS
THE FUTURE OF ONLINE GIVING ANALYTICS
CHAPTER 13 - No Borders
WORLDWIDE TECHNOLOGY USAGE AND TRENDS
MOBILITY AND GLOBAL AWARENESS
INTERACTION
THE WORLD AROUND US
IMPACT
TURNING DONORS INTO FUNDRAISERS
DISSIPATING BORDERS-EMERGING OPPORTUNITIES
NEW-MARKET ENTRY
TURNING DIGITAL OPPORTUNITIES INTO REALITY
IDENTIFYING THE NECESSARY LEVEL OF INVESTMENT
CONCLUSION
PART III - Making Technology Work for Your Organization
CHAPTER 14 - Effective Web Design
FIVE SITE CRITERIA TO STRIVE FOR
SEVEN KEY COMPONENTS OF AN EFFECTIVE WEB SITE
CONCLUSION
CHAPTER 15 - Multichannel Fundraising
THE BIGGER PICTURE
AN ENCOURAGING INTEGRATION RESULT
ALTERNATIVE GIVING
A LOVELY, INTEGRATED FUNDRAISING TEST
MASS MEDIA INTEGRATION
HOW INTEGRATED MEDIA RELATIONS AND FUNDRAISING CAN HELP RAISE MORE MONEY ONLINE
HOW THE INTEGRATION OF OFFLINE MEDIA AND AN ONLINE DESTINATION LED TO ...
THE TELEPHONE AND ONLINE FUNDRAISING TOOLS
MAKING YOUR OWN ONLINE AND OFFLINE TESTING SCHEDULE
LIVE CHAT
HOW DO YOU STAFF FOR AN INTEGRATED FUNDRAISING PROGRAM?
HOW THE STAFF PERSON CAN CREATE A SUCCESSFUL MODEL OF COOPERATION
CONCLUSION
APPENDIX 15A - Competency Profile of a Manager or Directorof Integrated Fundraising
CHAPTER 16 - 12 Steps to Protect Your Organization and Donors from Fraud and ...
STEP 1: QUESTIONS TO CONSIDER
STEP 2: UNDERSTANDING WHY PCI DSS AND PA-DSS COMPLIANCE IS MANDATORY FOR ALL ...
STEP 3 : UNDERSTANDING HOW FRAUD HAPPENS
STEP 4: HOW TO PREVENT HUMAN AND COM PUTER SOCIAL ENGINEERING
STEP 5: UNDERSTANDING THE DANGER OF NONCOMPLIANCE
STEP 6: UNDERSTANDING HOW IDENTITY THEFT HAPPENS
STEP 7: HOW TO PREVENT THEFT OF YOUR DONORS’ INFORMATION
STEP 8: HOW TO PROTECT YOUR DONORS’ CARDHOLDER DATA
STEP 9: ATTAINING AND MAINTAINING THE 12 PCI DSS REQUIREMENTS
STEP 10: UNDERSTANDING THE BENEFITS TO YOUR ORGANIZATION
STEP 11: HOW TO BEGIN YOUR ORGANIZATION’S PCI DSS COMPLIANCE ACTION PLAN
STEP 12: UNDERSTANDING PA-DSS
CONCLUSION
CHAPTER 17 - Mobile Technology
HOW ORGANIZATIONS USE MOBILE TECHNOLOGY
HOW MOBILE PHONE TECHNOLOGIES WORK
HOW TO GET STARTED
STRATEGIC CONSIDERATIONS
EXAMPLE USE CASES
CONCLUSION
CASE STUDY - Transforming Activists into Donors—Nicolas Hulot Foundation Case Study
Notes
Index
The AFP Fund Development Series
The AFP Fund Development Series is intended to provide fund development professionals and volunteers, including board members (and others interested in the nonprofit sector), with top-quality publications that help advance philanthropy as voluntary action for the public good. Our goal is to provide practical, timely guidance and information on fundraising, charitable giving, and related subjects. The Association of Fundraising Professionals and Wiley each bring to this innovative collaboration unique and important resources that result in a whole greater than the sum of its parts. For information on other books in the series, please visit:
THE ASSOCIATION OF FUNDRAISING PROFESSIONALS
The Association of Fundraising Professionals (AFP) represents more than 30,000 members in more than 197 chapters throughout the United States, Canada, Mexico, and China, working to advance philanthropy through advocacy, research, education, and certification programs.
The association fosters development and growth of fundraising professionals and promotes high ethical standards in the fundraising profession. For more information or to join the world’s largest association of fundraising professionals, visit www.afpnet.org.
2009-2010 AFP PUBLISHING ADVISORY COMMITTEE
Chair: D. C. Dreger, ACFRE
Senior Campaign Director, Custom Development Solutions, Inc.
Nina P. Berkheiser, CFRE
Principal Consultant, Your Nonprofit Advisor
Linda L. Chew, CFRE
Development Consultant
Patricia L. Eldred, CFRE
Director of Development, Independent Living Inc.
Samuel N. Gough, CFRE
Principal, The AFRAM Group
Audrey P. Kintzi, ACFRE
Director of Development, Courage Center
Steven Miller, CFRE
Director of Development and Membership, Bread for the World
Robert J. Mueller, CFRE
Vice President, Hospice Foundation of Louisville
Maria Elena Noriega
Director, Noriega Malo & Associates
Michele Pearce
Director of Development, Consumer Credit Counseling Service of Greater Atlanta
Leslie E. Weir, MA, ACFRE
Director of Family Philanthropy, The Winnipeg Foundation
Sharon R. Will, CFRE
Director of Development, South Wind Hospice
John Wiley & Sons, Inc.:
Susan McDermott
Senior Editor (Professional/Trade Division)
AFP Staff:
Rhonda Starr
Vice President, Education and Training
The editors and authors dedicate this book to the many volunteers and staffers who work every day to support millions of charities around the world. To each of them, we offer this book as a guide to making the most of the Internet to bring together communities of supporters in service to others.
Introduction
A PRIMER FOR BOARD MEMBERS AND NON PROFIT EXECUTIVES: INCREASED EFFICIENCY, EFFECTIVENESS, AND SUCCESS THROUGH USE OF THE INTERNET
For those of us who work everyday to manage and govern charitable organizations, making decisions for how best to use some of the broad array of Internet technologies available can be a daunting task. Multiple online technologies are now available globally with expanding web sites linked to social networks in an increasingly mobile universe, all of which can be confusing to even to the most seasoned practitioner. This is why the comprehensive book, Internet Management for Nonprofits: Strategies, Tools & Trade Secrets, has been prepared, to answer both the “how to” along with “how to succeed” using an increasingly fast-paced, overly complex and always challenging asset, the Internet.
On some level we all know that managing the use of digital and Internet vehicles for marketing, communications, and fundraising purposes is essential to our ability to build the broad-based communities of advocates and supporters we require. We also know that mastering these techniques at some level is required to move toward the efficiency and effectiveness demanded in today’s business environment. Yet, how to accomplish so much can seem a mystery beyond our organization’s technical ability and fiscal constraints.
Using the voice of over 25 experts from around the world, this book is for board members, executive directors and CEO’s, vice presidents and managers at all levels who know they must address channel confusion, must establish the return on investment (ROI) of any of these initiatives, and must know what measurements of success are possible and the path to get there using Internet, digital, and mobile services. The goal of this book is to help you to understand the tactical opportunities and to create outreach strategies based on objective analysis and audience development - not based on just the technologies themselves. Consider this book a “pitch free zone” where we are not promoting any services over another, but instead we are providing practical usable advice that both the expert and novice can use to better manage their organizations.
For managers in the large, well-established nonprofit to the smallest more entrepreneurial charity, the Internet has become an essential tool for managing marketing, communications, and fundraising alongside day-to-day operations. It is very easy to establish a web presence these days, but that is not enough. Build it and they will not necessarily come. It takes serious strategy to succeed online—just as a smart nonprofit manager or board member knows, it takes serious strategy to succeed offline as well.
Nonprofits who have carefully built brands and broad-based relationships offline risk damaging all they have created when they pursue ill-conceived Internet strategies. Yet every charitable organization cannot avoid the necessity of ever-increasing utilization of digital management for their organization if they want to compete successfully today and into the future.
This book has been prepared for all those who want to expand on the technological opportunities available to them and for those who want to learn how their organization can effectively and efficiently seize these opportunities.
The Internet provides every nonprofit three types of opportunities: 1) it links them directly to supporters, donors, and the larger community; 2) it lets them, even small ones, compete on a more level playing field because a smart strategy developed for a small charity has just as much opportunity for success as one developed by a much larger one; and 3) the Internet and mobile technology represent tools that can be used to develop and distribute services, information, and networking opportunities with multiple audiences not available through more traditional offline means.
As you prepare to use this book at board meetings, committee strategy sessions, and staff gatherings, here is a brief summary of the content prepared specifically for you by the international group of experts the editors have assembled.
World-renowned Internet expert Beth Kanter provides board members and charity managers a “users guide” to the Return on Investment (ROI) of social media in Chapter 1. Beth tells us, “Social media is propelling nonprofit goals to build a movement around a core advocacy issue, improve customer service or programs, reach new donors, and spread awareness of a nonprofit brand around the world.” Yet, as you will learn, social media require a different skill set than do other more traditional forms of outreach for marketing, communications, and fundraising purposes. As Marnie Webb, co-CEO of TechSoup Global said, “Nonprofits can no longer ignore social media or they risk becoming irrelevant.” In Chapter 2, Michael Sola and Tim Kobosko provide a unique approach to understanding the path to managing your charitable organization using online tools from the perspective of someone managing and/or governing a nonprofit. Unlike any other chapter in this book you are placed in the office as lessons are learned. Drawing heavily on these authors’ experiences at the National Wildlife Federation (NWF), this chapter helps even novices understand the important steps needed to manage and succeed with your online resources.
E-Governance is a concept whose time has come, and our experts Dottie Schindlinger and Leanne Bergey help the reader learn how to improve board leadership through the use of online technology. In Chapter 3 this essential text helps board members and administrators learn exactly how they can bring the efficiencies they know exist to their own governance process to board recruitment and benchmarking to policies that successfully bring transparency to nonprofit operations that donors and supporters demand. Learning from Dottie and Leanne will help make succeeding in their efforts easier, more secure, and efficient for board members.
One of the “payoffs” all nonprofits can expect from increased use of the Internet is the ability to raise both more awareness for their cause and more money. The powerful team of Russell Artzt, John Murcott, and Mark Fasciano came together in Chapter 4 to guide us to strengthen our collaboration with staff members, board members, and volunteers. This strategy often can be scary to traditional minded managers and board members because collaboration often means letting go of control. But these three experts help us maneuver through those issues and help to maximize the time and money savings to be found in the hidden economies of scale and empowerment of the organization’s stakeholders.
Loyalty and donor insight are two key strategies we learn to leverage, predict, build, and manage in the excellent Chapter 5 written by the legendary Roger M. Craver and Ryann Miller. Using prediction models, building strategy around those who can influence your outcomes and learning how to manage the new donor-centric world are techniques managers will now understand and implement. The main benefit in this chapter is to learn the strategic tools that can best turn donor insight into trust, loyalty, volunteer activism, advocacy, and a thriving bottom line.
Just when you thought you understood how to manage your organization along comes the Internet with its own language, tools, and metrics. Learning how to understand all the data can be mind numbing for even a seasoned techie. For the rest of us we just fear we either won’t get it, or can’t keep up. Fear no more. In Chapter 6 Blackbaud’s Steve MacLaughlin brings his expertise to our desk. We already know that what we measure and how we measure it can spell the difference between successful strategy and failed initiatives. But through the use of easy-to-understand language and models, Steve helps us not only know what a click-through rate is or what benchmarks should be met, he helps managers and board members use data in a more powerful way that can inform the strategies that will lead to more efficient and successful initiatives.
Part II of this book has been specifically designed to focus our attention on fundraising and building the sort of online communities that can support our growing need for a stronger financial foundation.
It is always best to start at the beginning. In Chapter 7 Adrienne Capps provides a primer on tools and techniques for managing fundraising and building strong communities online. This is a must read for all board members who want to learn the opportunities available to their organization’s management and for everyone in leadership positions at charitable organizations to expand their horizons as they seek to build the bridge between traditional and online fundraising and community building activities. Adrienne’s advice is solid as it urges all nonprofits to take a step forward, not necessarily a leap toward building and outfitting their online efforts. She inspires and motivates as her skill helps you make sense out of the Internet that helps you raise more money.
No nonprofit can succeed for long without strong volunteers and capable leadership. Without a specific volunteer recruitment and retention strategy what is successful short term will be lost over time. No one knows this topic better than Walter “Bud” Pidgeon, the author of Chapter 8. We knew this seasoned executive and prominent author will help you leverage tools as diverse as e-mail to web sites to social networking. Bud helps you bridge from “old line” or more traditional approaches to the efficiencies to be gained by deploying Internet and digital methods to build a strong, well-connected network for recruiting and retaining volunteers.
If you are engaged in the use of social networks like Facebook, LinkedIn, MySpace, or others or even if you have just been thinking about them, questions that quickly come to mind are: “How do I know if this works?” and “How do I know if we are successful?” You are not alone in asking these important questions; experts Danielle Brigida and Jonathon D. Colman in Chapter 9 will help board members and managers alike understand that social media are not a waste of time, but can be an integral set of tools that can bring a great level of success to your communications and marketing efforts. Like any social situation, mistakes can be made when you don’t know what is expected of you; Danielle and Jonathon will help you become online social butterflies. Measuring the impact of your success using the power of social networking and understanding how the tools, opportunities, and ideas all must be managed are presented as this chapter helps you learn to “improve, learn, reassess, and grow” through the use of social media.
Anyone involved with a fundraising strategy for more than five minutes learns about the traditional “Pyramid of Giving.” Everything old is new again, because to succeed today we now learn in Marcelo Iniarra Iraegui and Alfredo Botti’s Chapter 10 that success comes from understanding that the old pyramid has a secret hidden gate, a different entrance that can be accessed by making a donation. The traditional pyramid also has an extra level that “admits nonfinancial, digital supporters who arrive via new media, web sites, social networks, e-mail and the increasingly popular short text messaging (SMS), or other wireless access points.” Here is a new concept - those who try you out, before they give or even identify themselves. How to manage this level of contact and build on these nonfinancial relationships is one of the greatest mysteries for many nonprofits. This chapter leads you through the hidden gate to a new level of strategic success.
I have always thought that Philip King was a smart guy, but never so much as after he submitted Chapter 11 for this book on social networks. His chapter will help you understand that while I refer to the tools and techniques available through online platforms and social networks, the first step to making this all work is to internalize a basic truth that Philip brings to us: “Social media networks are not [really] tools; they are collections of people.” People ready to be engaged, ready to take action, ready to be inspired. Hundreds of millions of people already are on social networks around the world and what comes with this engagement is a demand for honest self-assessment and conversation. As Philip points out, social media aren’t just a new piece of technology; they’re a new form of engagement. Harnessing this power can have dramatic effects on your outreach in marketing, communications, and fundraising initiatives.
The “shotgun approach” to fundraising never really succeeded offline and it is certainly not the path to success online. Lawrence C. Henze lives and breathes data and in Chapter 12 you can understand how to use prospect modeling and prospect research to develop a more informed fundraising strategy. So much rich data are available to nonprofits that can allow them to more easily target the prospects for support with the highest likelihood of success. Yet many nonprofits have barely heard of online giving analytics, demographic and lifestyle cluster data, data mining, predictive modeling, or any of the other methodologies available. Once you read this chapter and begin integrating these measures into your fundraising strategy (both online and offline), you will see a dramatic change in the ability to target your donors and execute your plans.
The editors of this book have developed a series of useful strategic approaches for board members and nonprofit managers around the world. Regardless of where you are located there is always some other place that can be described as “international” relative to where you are. Reaching beyond your own borders can be a successful way to fundraise for many charities, yet the cost to do so has traditionally been a deterrent. International fundraising experts Andrew Mosawi and Anita Yuen in their Chapter 13 share details on how your organization can harness the globalization of fundraising, as it expands along the trade routes of global “economic, technological, socio-cultural and political forces.” This powerful duo demonstrates ways an organization can take advantage of this trend while leveraging the latest tools to fundraise internationally. Whether or not you plan to develop an internationally focused fundraising program, you must read this chapter, because it is a certainty that nonprofits outside your borders are targeting your donors and you must, at the very least, understand how they plan to do it.
Part III of Internet Management for Nonprofits provides expert advice on how best to make technology work for your organization. And it all begins with Chapter 14 where Allan Pressel shares the seven key components and five web site criteria necessary for success, and then adds such important topics as interactivity; site traffic; stickiness; return visitors; search engine rankings; and most important, results for your nonprofit. Allan also provides an analysis of how to manage these tools to help you accomplish all of them.
Now that you have developed a top-notch web site you also will want to make sure you have integrated fundraising tools that will maximize your chances of success. No longer is a “donate now” button enough; it takes a multichannel, integrated approach to succeed as Michael Johnston and Matthew Barr share from their years of experience in Chapter 15. They provide an analysis of multichannel effectiveness with accompanying case studies along with the staffing (human resource) issues you must address to manage your fundraising online efforts. Linking your online and offline fundraising strategies is key to long-term success.
The last thing anyone wants to happen is for their donor data to be stolen. The confidence and trust your supporters have placed in you will be compromised, in an instant, with the theft of sensitive and confidential information. Yet many boards of directors and nonprofit managers have very little knowledge and have given only passing thought to what is essential to protect their organization from violations of this sort. Catherine Pagliaro has spent years building her expertise in the ever-changing world of online and theft identity protection and in Chapter 16 she provides you with an 12-step primer on how to understand security issues that will protect your organization. Cybercrime is a serious and growing problem. “The Aberdeen Group estimates that more than $221 billion is lost globally every year to identity theft! Cybercrime is difficult to investigate and prosecute because it is borderless.” Protecting your supporters using Catherine’s advice is an important management topic.
The tragic earthquake in Haiti has increased the use of mobile giving, just as September 11, the Southeast Asia tsunami, and Hurricane Katrina put online fundraising and social networking at the forefront of all nonprofit board members and managers. A larger percentage of the world’s population holds a mobile device than have access to high-speed Internet service. Ben Rigby’s Chapter 17 will help you understand mobile technology and how it can be successful deployed by nonprofits. You will learn how texting can be used as an initial campaign hook, and then built into a successfully integrated online and offline campaign. And, although this topic seems new, Ben reminds us that it is already a primary method of communication between donors and supporters. Now is the time for you to learn how to “navigate the often-overwhelming variety of options” available in mobile giving.
The Internet also is richly designed for bringing together communities of supporters. Often activists for a cause are able to gather together, multiplying the effect of one man’s voice to that of an entire community, sometimes even overnight. Frédéric Fournier shares the case study story of what the Nicholas Hulot Foundation learned of how to transform activists into donors. Fred details their dedicated event web site, targeted e-mail promotions, and the “power of thanks.” You will learn the keys to their success.
It has been a privilege for me to work with my fellow editors Steve MacLaughlin, James Greenfield, and Philip Geier, along with our many authors and our friends at John Wiley & Sons to develop this book. We are all thrilled this book was chosen to be included in the highly successful AFP/Wiley Fund Development Series.
One last thought. We urge you to sign up for e-mail updates at http://www.p2pfundraising.org. As is pointed out in Chapter 10, given the new paradigms introduced by electronic media, perhaps Heraclitus, who was a Greek philosopher living on the coast of Asia Minor more than 2,000 years ago and couldn’t possibly have imagined that his wise advice would still apply today, was right in saying, “There is nothing permanent except change.” We believe this book provides an excellent background for everyone involved in charitable organizations to more effectively and efficiently manage them using tools, strategies, and techniques offered by the Internet, digital media, and mobile technology.
Ted Hart, ACFRE, Senior Editor
Washington, DC
February 2010
About the Editors
Ted Hart, ACFRE is considered one of the foremost experts in both online and traditional fundraising around the world. He is sought after internationally as an inspirational and practical speaker and consultant. He serves as CEO of Hart Philanthropic Services (http://tedhart.com), an international consultancy to non-profits and nongovernmental organizations. He also created People-to-People Fundraising, a movement housed online at http://www.p2pfundraising.org. He is founder of the international ePhilanthropy Foundation. Hart has taken a leadership role in helping nonprofits become green by founding GreenNonprofits (http://www.greennonprofits.org). Hart has served as CEO of the University of Maryland Medical System Foundation and as chief development officer for Johns Hopkins Bayview Medical Center. He is certified by the Association of Fundraising Executives as an Advanced Certified Fundraising Executive (ACFRE).
Hart is the editor or coauthor of several books, including Major Donors: Finding Big Gifts in Your Database and Online, Nonprofit Internet Strategies, Fundraising on the Internet, People to People Fundraising, and Nonprofit Guide to Going Green. He resides in the Washington, DC, and New York City areas. He lives with his daughter, Sarah Grace, and son, Alexander Michael.
Steve MacLaughlin has spent more than 14 years building successful online initiatives with a broad range of Fortune 500 firms, government and educational institutions, and nonprofit organizations around the world. MacLaughlin is currently the director of Internet solutions at Blackbaud and is responsible for leading the company’s development of online solutions for its clients.
MacLaughlin serves on the Nonprofit Technology Network’s (NTEN) board of directors and supports its focus on both the growth and the professionalism of the nonprofit technology sector. He is a frequent speaker, an active blogger (http://www.blackbaud.com/connections), and writer whose insights have appeared in several nonprofit-sector publications.
MacLaughlin earned both his undergraduate degree and a master of science in interactive media from Indiana University.
James M. Greenfield, ACFRE, FAHP Jim Greenfield has served since 1962 as a fundraising executive to three universities and five hospitals on the East and West Coasts and in between. He retired from Hoag Memorial Presbyterian Hospital in February 2001 after 14 years as senior vice president, resource development and executive director, Hoag Hospital Foundation, where more than $120 million was raised during his tenure.
The author and editor of ten books and more than 40 articles and chapters on fundraising management, his books and articles on measuring fundraising results for effectiveness and efficiency are among the first to tackle these difficult and challenging issues. Recent books Jim has coedited with Ted Hart and others include Nonprofit Internet Strategies: Best Practices for Marketing, Communications and Fundraising (2005), Major Donors: Finding Big Gifts in Your Database and Online (2006), and People to People Fundraising: Social Networking and Web 2.0 for Charities (2007).
Jim and his wife Karen reside in Newport Beach, California where he continues to serve nonprofits and the fundraising profession with speaking, teaching, volunteering, and consulting services.
Philip H. Geier Jr., an advertising professional, became chair and CEO of the Interpublic Group of Companies in 1980. He retired from that position at the end of 2000. In February 2001, Geier formed the Geier Group to provide consulting and advisory services in the areas of marketing, communications, and venture capitalism. Geier also is a senior adviser for Lazard Frères & Co., and he serves on the boards of directors of AEA Investors and Fiduciary Trust International, and he is retired from the boards of Alcon Labs, Mettler-Toledo International, and Foot Locker. Geier’s philanthropic director and trustee relationships include Memorial Sloan-Kettering Cancer Center, Save the Children, Autism Speaks, Columbia Business School, the Whitney Museum of American Art, and the International Tennis Hall of Fame. Geier holds a B.A. in economics from Colgate University (1957) and an M.B.A. in marketing and finance from Columbia University (1958).
PART I
Effective Management and Leadership Tools
CHAPTER 1
The ROI of Social Media
THE “I” STANDS FOR INSIGHT AND IMPACT
Social media is transforming how nonprofits do their work and their relationships with constituents. The early adopters that have embraced social media with an approach of listen, fail informatively, and evolve are seeing results. Strategic use of social media is actually helping measurably to reach new people and is bringing added value to mission-driven work. Social media is propelling nonprofit goals to build a movement around a core advocacy issue, improve customer service or programs, reach new donors, and spread awareness of a nonprofit brand around the world.
Nonprofits can no longer afford to take the stance that social media is “just a bunch of hype” and continue with business as usual. The risk is playing a harsh game of catch-up or even worse. Nonprofit leaders need to ask, what can our organization do to make our Internet communications strategies and fundraising more effective in these rapidly changing times?
The return on investment (ROI) of social media requires a different approach. It is about replacing the word “investment” with new “i” words, “insight” and “impact.” This chapter will help demystify social media listening, measurement, experimentation, and it will illustrate how nonprofits can effectively use these techniques to help improve their social media strategies to see measurable results.
SOCIAL MEDIA ROI-A NEW APPROACH
Although social media tools have been available to nonprofit marketing and fundraising professionals for several years, there is still debate about whether these new tools are worth the time investment. With economic and financial pressures always present, many nonprofit executive directors are highly skeptical as to whether social media helps nonprofits reach their objectives. When staff members suggest incorporating social media tools and techniques into the media mix, executive directors ask the following: What are the tangible benefits? How much will it cost in staff time to implement? How do we measure success? And, of course, is it worth it?
Over the coming decade, social networking sites like Facebook and other social media outlets and channels will become as ubiquitous to nonprofit development, communications, and program departments as the phone, direct mail, and e-mail. This transition will happen gradually, as younger nonprofit staff members, who are fluent in the use of these tools, assume leadership roles. And as members of generation Y comes into their own as donors and new technical developments transform the web into a social space, the use of social media will become as commonplace as “air,” says Charlene Li, a social media expert.1
Adding social media into the nonprofit marketing and fundraising toolbox does not mean abandoning proven marketing and fundraising methods such as e-mail marketing and direct mail. It does require some experimentation and a different expectation about short-term results. Finally, it means that organizations need to rethink and change their approaches, and that is easier said than done.
The Traditional Return on Investment Analysis for Nonprofit Technology
Many nonprofit organizations turn to a traditional return-on-investment process as a prelude to justifying a large investment in a mission-critical technology system or equipment. This might include new desktop computers, a video-conferencing system, a web site redesign that includes a new content management system, a customer relationship management (CRM) database, and the list goes on. Simply stated, the traditional ROI process is an analysis that looks at the benefits, costs, and value of a technology project over time. The analysis also includes financial projections that clearly show how the technology purchase will improve the bottom line. In other words, the analysis clearly connects the cost of investing in the technology to increased income or budget savings because the technology has made staff members more efficient in their work or has enabled them to better serve clients or stakeholders. Further, a traditional ROI analysis might also point out how staff time might be better spent, such as by illustrating how much more effective staff members are in their work because they can devote their attention to customers, clients, or program development rather than spend time on clerical tasks.
An ROI analysis is more than a simple mathematical equation that looks something like this:
Income from new technology − cost of new technology = ROI.
TABLE 1.1 TRADITIONAL ROI PROCESS, STEP BY STEP
Step | Description |
---|
1. Identify the objective | The Organization identifie what it hopes to accomplish with the technology by identifying results. |
2. Define the audience | The organization identifies the audience. It could be external audiences like donors or clients as well as internal audiences like staff members. |
3. Benefits statement | The organization creates a bebefit statement to identify how using the technology will help support its mission. Typically, benefits such as efficiency of effectiveness are identified. Benefits can also be intangible (can’t be tranlated into a dollar amount and are usually behavior oriented) or tangible (those that can be translated into dollars or time savings) |
4. Use metrics to translate into a dollar value | These are measures selected to translate the benefit into an objective measure. Data must be collected during this process, but only enough to answer decision makers’ questions. |
5. Calculate finacials | The financial calculations might include comparing the cost of different solutions, comparing costs and benefits, comparing the cost of not doing, or identifying a small pilot to understand costs. |
6. Communicate results | The ROI analysis is shared with key decision makers either as a prepurchase decision tool or postpurchase. It incorporates both numerical and qualitative data. |
A traditional ROI analysis goes much deeper and involves a number of analysis steps, as shown in Table 1.1.
For a more robust and detailed understanding of the traditional nonprofit technology ROI process, please refer to chapter 3, “Measuring the Return on Investment,” by Beth Kanter, in Managing Technology to Meet Your Mission: A Strategic Guide for Nonprofit Leaders.2
ROI and the Development and Marketing Departments
Development and marketing professionals have used ROI calculations to analyze the results of their Internet-based fundraising, membership, advocacy, and communications campaigns. Most e-mail and CRM software will capture standardized and universally accepted metrics such as open rates, conversion rates, and others. This can help nonprofit development and marketing professionals not only easily answer the question, did our campaign work? but also have confidence based on past experience of a certain level of results. In other words, there is less risk.
Over the past five years, the nonprofit field has begun to establish industry benchmark metrics for measuring the success of online e-mail advocacy and fundraising campaigns.3 Nonprofit fundraising and marketing professionals use these metrics to compare their results to industry norms.
Nonprofit online fundraising and marketing professionals collect and analyze standard web site metrics from analytics software programs like Google Analytics. The software can crunch the data to clearly demonstrate an ROI (or not). In fact, Google Analytics has a feature that tracks revenue goals and can automatically calculate the dollar return of specific strategies. In addition, because web metrics have been in use for more than a decade, they are generally accepted and understood by executive directors. What nonprofit executive doesn’t know the definition of a page view?
From Counting Eyeballs to Measuring Engagement
What is most difficult for many nonprofits to understand in their quest to measure and improve social media strategies or to justify getting started, is that social media not only requires defining success differently but also uses different metrics. Social media metrics are not all about page views. In fact, some social media experts go as far as saying that the page is view is dead or life support.4 To measure social media success in the early stages, organizations need to measure intangibles such conversations and relationships. This can be a hard sell, especially when an executive director is screaming, “Show me the money!”
Social media requires not only a different approach to strategy but also a different mind-set from that of implementing e-mail, direct-mail, and other traditional communications and fundraising campaigns.
The social media measurement maven K. D. Paine, in an interview with the blogger Jason Falls put it this way: “Ultimately, the key question to ask when measuring engagement is, ‘Are we getting what we want out of the conversation?’ And, as stubborn as it sounds Mr. CEO, you don’t get money out of a conversation.”5 At least in the initial stages of social media exploration, and as early adopters are discovering, engagement is leading to donations.
Reframing ROI from Investment to Insight and Impact
Should nonprofits be using an industrial measurement model in a digital age to measure the success of their social media efforts? It simply doesn’t work. In the 1920s, ROI was created as a financial measure, developed by DuPont and used by Alfred Sloan to make General Motors manageable. It is an analysis that calculates business performance, taking into account not only whether the business made money but also whether that profit was good enough relative to the assets it took to generate it. Over past century, the ROI process has been refined and so deeply etched in business thinking that many view it as the only legitimate means of measuring business performance.
It is also important to remember that ROI was a measure of return on the total investment in the entire business. It was never intended to look at the ROI of a specific marketing strategy, program, tool, or any other isolated aspect of an organization.
Many social media gurus have challenged the notion of using a straight financial calculation to determine whether an organization should invest in social media before taking the plunge or evaluating the first forays. These experts are not saying to not use metrics or that social media isn’t measurable. What the experts are saying is that organizations need to measure value, and that value isn’t necessarily synonymous with dollars, especially in the early stages of social media strategy experimentation.
Perhaps the best recent illustration of why traditional ROI formulas should not be used for social media fundraising is the discussion that followed an article published by the Washington Post titled “To Nonprofits Seeking Cash, Facebook App Isn’t So Green: Though Popular, ‘Causes’ Ineffective for Fundraising.”6
The article, which proclaimed fundraising through Facebook’s Causes application a failure, based its analysis of fundraising performance on a dollars-per-donor metric. The article created an uproar on nonprofit blogs, with many fundraising and social media professionals making the point that it is still too early to measure success in aggregate dollars per donor.7 Allison Fine, author of Momentum and who blogs about nonprofits and philanthropy, pointed out that awareness, not dollars, is the right metric for success in fundraising on social networking sites at this point in time.8 In addition, she argues that social fundraising applications such as Causes facilitate the spread of a nonprofit organization’s message in a way that the nonprofit does not need to do the heavy lifting. Steve MacLaughlin from Blackbaud, a leading technology provider to the nonprofit sector, said, “If the reason why you want to use social networks is just to raise money, then stop now. It doesn’t work that way. Causes is a friend raising tool, not a fundraising tool.”9
The fundraising consultant Betsy Harman, principal of Harman Interactive, concurred and pointed out why fundraising on social networks requires time. “Any nonprofit who thinks they can simply create a Causes page on Facebook and wait for the money to roll in, doesn’t understand networked fundraising. It’s still all about building relationships, telling your story, and taking potential donors through the process of cultivation, stewardship and solicitation.” Brian Reich, a marketing consultant and coauthor of Media Rules! Mastering Today’s Technology to Connect with and Keep Your Audience, suggests that too many nonprofits have taken the “build it and they will donate” approach and that “simply by using the tools they’ll raise a lot of money. They’ve forgotten that it’s the relationship building and that takes time.”10
The consultant Ivan Boothe said that Causes applications have been effective for organizing activists and keeping them engaged with a campaign. “Asking for and receiving donations has only ever been pursued on social networks as a way to reinforce this identity, not as a way to raise large amounts of money. It’s about cultivating relationships with your most passionate supporters, giving them ways to speak in their own voice and connecting them with other people. Most young folks who are on social networks get this, since it is how they’re relating socially on these networks already.”11
It is important to understand that looking at the ROI of social media and social networking tools requires two new “i” words: “insight”12 and “impact.”13 The concept of return on insight is something that the social media thought leader David Armano points out in his white paper “The Collective Is the Focus Group.”14 In the early stages, organizations need to approach social media implementation with more agility, which requires listening to and reiterating what works. He names this process “listen, learn, and adapt.” The expectation of immediate dollar results is unrealistic, as many early adopters of nonprofit social media well know. It takes time to build relationships and more time to see results of social media efforts. As social media is largely experimental, it is imperative to measure quickly and make real-time course corrections and to figure out what is working. In this stage, learning and engagement are the value that social media offers to nonprofits.
The idea of impact on mission, which comes at a later stage, is to connect your social media objectives to specific organizational outcomes. As K. D. Paine, a thought leader in social media measurement commented, “We should reserve the term ‘ROI’ for impact on mission. For the Red Cross it’s not about fans and followers or even money raised. It is about lives saved.”15 Paine goes on to say that if the social media strategists at the Red Cross can show that they helped more people in a crisis through Twitter, then that trumps all other metrics.16
Listen, Learn, and Adapt Defined
The best practice of listen, learn, and adapt has fueled the success of many nonprofit social media strategies. Of course, organizations need to first set an overall objective for a social media strategy and then identify the audience and tactical approaches (see Table 1.3 at the end of the chapter).
But before the organization establishes a presence or gets started using any tools, listening must be the first step. Listening means knowing what is being said online about an organization, its field, or its issue area. Listening involves the use of monitoring and tracking tools to identify conversations that are taking place on the social web. It is an important first step before engaging with audiences. At its most basic, listening is simply naturalistic research, although it is more like a focus group or observation technique than a survey.
Listening is not simply scanning or data collection or a river of noise. The process involves sifting through online conversations from social networks to blogs—many voices talking in many places. The value of listening comes from making sense of the data and using it to inform your engagement strategy with stakeholders.