Charitable fundraising used to depend primarily upon a charity’s size, efficiency, and longstanding reputation.
Now, researchers find that sites like Kickstarter, Razoo, Facebook, and Twitter have created a more level playing field in the nonprofit world, one where successful use of technology can make up for limited organizational size.
Technology and social media, it turns out, can not only raise the online profile of even small organizations, but also increase their support bases and their ability to generate donations online and off.
The study “is the first to look at the predictors of donations in a social media setting,” says Gregory Saxton, associate professor in the University at Buffalo communication department.
“It also appears to be the first study of donations on a crowdfunding platform. Furthermore, it examines variables the ‘traditional’ studies have ignored—the size of the organization’s social network and the organization’s ‘web capacity,'” he adds.
Friends, not funds
“The first, and major, unexpected finding,” he says, “was that financial ratios, especially the level of a charity’s organizational efficiency, were simply unimportant in online giving, although they are known to be prominent determinants of off-line charitable giving.
“Studies that use the economic model of giving have shown that aggregate levels of charitable contributions are positively related to organizational size,” says Saxton, “so our second and more minor finding was unexpected as well.
“It was that the size of an organization (measured as total financial assets) did not have a significant positive effect on the number of donations received,” he says.
“This led us to surmise that donors on social media and crowdfunding sites do not seem to care how efficient the organization is or how large it is. Instead, they are swayed by what we called the ‘social network effect,'” says Saxton, “which is an effect provoked by the size of an organization’s network of followers; that is, the number of online ‘friends’ or fans it has.”
The study, which analyzed the fundraising activities of more than 50 organizations using Facebook for that purpose, suggests that if charities understand and cultivate this effect, they could experience a payoff in the number of donations and supporters.
10 findings to consider
- Online donations are driven by the number of ‘friends’ that a cause elicits through online sites. Friends often recommend a cause to other friends, which extends the reach the cause or group has.
- Donations are also influenced by the web capacity attached to the charity, which is measured by the number of users reached by the organization’s website.
- A nonprofit looking for success in social media fundraising should increase the quality and reach of its website, the latter measured by the size of its online constituencies, and encourage its supporters to promote the cause online.
- To accomplish this, the organization needs to have the appropriate level of “tech savvy.” Having employees who strategically deploy social media strategies can be just as important to their success as having adequate financial resources.
- Nonprofits in some fields are more likely to succeed in social media fundraising than others. Especially successful are those that support health-related causes and, in particular, present an immediate need or benefit to the public—treatment for a sick child, a home for a wounded soldier, a campaign to save a life.
- Social factors may be pushing donors to give more to popular and socially acceptable causes. This has implications for organizations whose efforts are less well-known than others or do not focus on popular “warm and fuzzy” social issues.
- Online donors appear to be more willing to fund specific and new projects, rather than pre-existing programs, especially those that offer tangible deliverables like a clubhouse or a new film.
- Attention-getting organizations and projects are more likely to receive funding than those that are more passive in their approach to donors.
- Such practices as crowdsourcing and mobile donations, which represent a major change in the way individuals donate to charities, offer new ways for nonprofits to generate greater donations.
- Online and traditional fundraising methods complement one another. Large numbers of “fans” generated by a good website and social media outreach can be approached using traditional methods as well.
Lili Wang, assistant professor of nonprofit studies in the Arizona State University School of Community Resources and Development, is coauthor of the study, which appears online in Nonprofit and Voluntary Sector Quarterly.
Source: University at Buffalo