HOW TO Measure Social Media ROI for Nonprofits

We work in fundraising. So when we think about return on investment or ROI, the “return” part of that acronym usually has something to do an increase in gifts and dollars given. Of course, for those of us whose fundraising experience extends beyond running a bake sale, we know there’s more to a nonprofit’s budget than what comes in via fundraising from donors. There are expenses – not just employee salaries, but phone programs, direct mail resources (from printing costs to the fees associated with actually mailing the items), costs associated with stewardship activity, and more. When we reduce those costs, the savings are no different than an equal amount coming in via fundraising. In fact, it may be even better since revenue generated from savings can often be considered “unrestricted.”

ArrowUpDownAnimatedA well-orchestrated social media strategy can produce significant savings in areas like direct mail, stewardship activity, and phone programs. Which is why savings from a reduction to, for example, a phone program due to a greater reliance on email or social media is one way of measuring the ROI of your social media. For more on different ways of measuring the impact of your social media activity, check out this infographic on the MDG blog. Pay special attention to the four points in “The New Game Plan” section at the bottom of the infographic. One of those points asks if you’re better prepared to react to issues that affect brand reputation (as a result of your social media strategy). Having a greater hold of your brand or reputation is highly valuable and certainly demonstrates a return on investment – even if it can’t be directly quantified in fundraising dollars or new donors acquired.

So how might your nonprofit organization or institution measure online and social media activity beyond the easily trackable donors and dollars raised figures? The following are a few suggestions:

Listen to your data and adjust your direct mail program accordingly: How many of your donors give exclusively online? If someone gives online – especially if they give repeatedly online and never give via mail – then you’re likely wasting resources by sending them direct mail pieces. That doesn’t mean you should never mail an online donor. Every new donor should receive a welcome kit via the postal service. But after that, if they never respond via mail, and especially if they continue to give exclusively online, redirect those mail resources to beefing up your online and social media strategy (including email, social networks like Facebook, and your organization’s websites).

Still don’t believe me? Check out the 2012 Nonprofit Social Networking Benchmarking Report. In that report, you’ll see the average value of a Facebook “like” is $214 in the 12 months following the acquisition of that like. How much did it cost to achieve that like? $3.50. How much does it cost your organization to acquire a new donor via direct mail? For many organizations, that direct mail acquisition cost is ten times the $3.50 it cost to acquire the donor via Facebook.

Still don’t believe me, part 2? Here’s a personal anecdote… My wife recently asked that we stop supporting an environmental nonprofit, because they repeatedly sent us massive packets in the mail. We have never sent a gift to that organization via the mail, but had made multiple online gifts. To recap … an environmental nonprofit sends their online-only donor enormous amounts of PAPER. A wiser approach would cutting mail to families like ours and instead investing those resources in a more robust online stewardship and fundraising strategy. The online approach would likely be less expensive. The savings from that approach should count towards your online and social media ROI.

Stewardship: Nothing allows you to stay in touch with a large number of donors on a daily, even hourly basis, like social media. More and more, we are learning about the value in keeping our supporters appraised of how their fundraising dollars are being spent to improve the world. Use online and social media to tell that story (from a DONOR CENTRIC standpoint) and you will strengthen relationships with current donors, plus attract new donors when your current donors share your stories with their friends and family via social networks like Facebook and Twitter.

How do you measure this activity? It’s not always as easy as counting donors and dollars, but there are metrics like awareness and perception. For larger organizations, tools like Radian6 can help with tracking these “soft” metrics. You might also consider donor attrition. If you make a serious investment in online and social media, has your attrition rate improved?

Think about all the metrics that matter to your organization and what you’re trying to accomplish through better stewardship. Then, line those goals up with online and social media activity. Track the two over time and you should be better able to understand the ROI of your online and social media activity as it relates to stewardship.

Tweet banks to replace phone banks: We continue to hear stories of institutions or organizations that are investing more and more in their phone programs only to see the same or lesser results. Why not replace some of those callers with social media conversation monitors? In higher ed – where phonathons are common place – take some of those student callers off the headset and put them in front of a keyboard. Especially during an online campaign, their activity could very well result in more gifts and dollars raised than they would be able to generate over the phone. At the very least, you’d be reaching a different and enormous demographic of people who don’t have or use landlines. Just how enormous is that demographic? More than half of all Americans. No, not just younger Americans …MORE THAN HALF OF ALL AMERICANS ARE UNREACHABLE BY YOUR PHONE PROGRAM EFFORTS.

Cutting back on your phone program in favor or more online and social media activity may produce ROI in the form of savings, but it will also likely lead to a much more easily quantifiable metrics like more money raised and more donors acquired.

For more on measuring the impact of your online and social media activity, connect with Justin Ware, BWF’s Director of Interactive Communication by clicking here.

Top 3 Factors for Social Media Fundraising Success: It Starts with Strategy

A major breakthrough has surfaced for those of us who’ve been struggling to answer the question, “what is the ROI on social media?” According to the recently released Nonprofit Social Network Benchmark Report, a new donor acquired via an organization’s Facebook page can be expected to give $214.81 per year across all channels (online, direct mail, etc). The average cost of acquiring that donor on Facebook? $3.50. Correct me if I’m wrong, but that cost-to-raise-a-dollar ratio suggests organizations are not investing nearly enough in their online and social media activity. Imagine doubling that investment per fan to $7. Or even investing $10 per fan. There’s likely a tipping point, but the question is, “how much more than the current average of $214.81 can we raise from Facebook-acquired donors if we focus on stewarding them online?” After all, they chose to connect with your organization online …doesn’t it make sense to invest more of your communication resources in the same media they used to connect with you in the first place?

The next and probably better question is, “if we’re going to spend more money on digital communication, how do we spend it?” Below is a graphic pulled from the Nonprofit Social Network Benchmark Report that shows how respondents to the survey (the same group that is, on average, raising more than $200 per Facebook fan) are investing their online communication dollars and energy:

From our observations, the organizations that are raising tons of money online are doing precisely those three things – putting staff in place to manage the online work, keeping leadership in the loop and educating them on why the online managers are doing what they’re doing, and executing an integrated strategy. To be clear, simply having a Facebook page, building a nice online donation site, or occasionally posting to a blog is not an online strategy. If that’s your organization’s approach, you could and should be doing more. For starters…

  • What is your content strategy and how does it meet the needs and wants of your supporters?
  • How do you know what your supporters need and want?
  • What type of posts generate the most engagement with supporters?
  • Does your content encourage your supporters to share information about your organization with other potential donors?
  • How can emails be written to garner the largest number and amount of online gifts?

To answer those questions and more, we’ve crafted our online fundraising consulting services around helping nonprofit organizations use new technology to both add new donors to their database and increase overall fundraising. It’s worked for clients like The Florida State University and is something we’d love to talk with you about. If you’d like to learn more, just click here to find my email address and get the conversation started. Or, follow us on Twitter. We’re excited to help you transform your online philanthropy!

Online Fundraising Best in Class

One of the most exciting recent developments in social media for higher education is the sudden appearance of real-world ROI. Yes, we can now demonstrate how social media can boost fundraising efforts and not just in the less tangible areas of perception and awareness, but in solid dollar figures. The following are three great examples of increased fundraising thanks to smart online, social media strategies:

Middlebury’s MiddSTART Puts Donors in the Driver Seat

Florida State Wins Big with 36-hour Online Fundraising Campaign

Social Media Behind 400% Boost in Online Giving at Thunderbird

Now we’d like to hear from you. Please share with us the best examples of social media ROI you know of in the comments below, on Twitter at @BWF_social, or by email at jware@bwf.com. Whether it’s hard numbers like online fundraising results or more communications-focused goals like awareness building or perception improvement, we want to know and help you share the good news about your success!

As always, follow BWF.com for more news on social media in philanthropy.

New favorite tool … Visibli

If you’re looking for ways to measure the success of your social media strategy (which you should be) and are interested in knowing which content is popular among your followers (which you should be), I’d recommend giving Visibli a try. Here’s how it works…

  • Sign in with your Twitter or Facebook accounts
  • Keep your eyes open for email updates from Visibli
  • Use Visibli’s easy-to-understand charts and metrics to follow which links you post are most popular (a recent @BWF_social report is posted below)
How does one use this information? Simple. Pay attention to which types of content are most popular with your followers. Are infographics consistently getting the most hits? How about videos? If so, what kind of videos are being clicked on the most? …messages from your board president? …interviews with recipients of your services? …footage of volunteers in the field? Then, use that information to inform your content strategy (you do have a content strategy, right?). Social media is about forming connections by providing your audience with value – something they want or need. Visibli helps you determine exactly what it is your audience is most interested in by showing you which links you’ve posted are most popular with that audience.

Social Media for Healthcare Fundraising – a Q & A with Children’s MN

Jesse Stremcha, an e-Philanthropy Strategist with Children’s Hospitals and Clinics of Minnesota (@ChildrensMN), has been leading a comprehensive social-media-for-fundraising strategy for more than three years. Which means, he has a lot of tips, data and best practices to share. The following is a Q and A I sent to Jesse and the answers he returned… 

Q1: What role does social media play in Children’s annual giving campaigns?

I think in general, we use online tools and social media in ways that closely mirror the relationship building that happens in major gift work.  And, we’re able to do it in many-to-many ways.  That is, we can share information in a way that raises awareness, cultivates engagement and drives action in a way that impacts not only our audience directly, but also asks them to participate in sharing our message with their audiences.

To draw a direct comparison, its looks like this:

Online Major Gift
Stage 1 Awareness Discovery
Stage 2 Engagement Cultivation
Stage 3 Action Solicitation

If you take a look at Children’s Facebook page, you’ll see these three things happening all the time.  There’s a continual flow of short bits of information aimed at raising awareness of what happens at Children’s and engaging people in it.  There’s good evidence of engagement in ‘comments’ and ‘likes’ we get.  And, we’re sprinkling in calls to action (solicitation), too.  Those can be event invitations, calls to participate in legislative action and invitations to give.

The analogy also holds in terms of ratios of people at various stages.  You do a lot of discovery to get a few people engaged and it’s a subset of those that will ultimate make gifts.

Q2: How important is conversation (via social and new media) to cultivating relationships with donors?

It’s a hard thing to quantify.  To lean on my analogy again, how important is cultivation and stewardship to successful major gift work?

I think there’s two pieces of data I’ve seen that support the idea that social media and online tools make a difference:

  • Major donors research charities online
  • Consumers who connect with brand via social media increase loyalty

I think it’s a short leap to conclude that if major donors are making gift choices based on online research – and ‘consumers’ are developing greater brand loyalty because of the connections they make with those brands via social media – that donors are building charitable affinity through an on-going relationship and conversation with charities via social media.

Q3: How do you measure the effectiveness of you social media strategy?

It’s a mix of art and science.  For all the metrics available online and about social media use, it’s pretty hard to know how likely a Facebook fan is to donate, or even if a Facebook fan has donated.

The science

On the social media side, we look at all of the metrics available to us.  From those, we know our fan base on Facebook and following on Twitter continue to grow with consistently high indications of engagement (comments, retweets, likes, comments, etc.).  We also know the quality of comments we get, particularly on Facebook, is very high.

We also know that the quality of traffic that gets referred from social media sites is very high.  That is, visitors coming from our social properties view more pages and spend more time browsing on our site than the average visitor.

And, we know that as we’ve continued to move communication online and make good use of social media channels we’ve seen more event registrations, peer-to-peer fundraising, advocacy and donation online.

I recently read this piece from the Business Insider suggesting a Facebook fan is worth 20 clicks to your website per year. If we’ve got 4500+ Facebook fans, a fan=20 visits/year, and we use $1/referral (based on a modest cost-per-click of online advertising), Facebook generates $90,000 in advertising value alone:

4500 fans x 20 visits x $1/visit = $90,000

I think you could fairly argue our fans are considerably more engaged than those of a ‘top 100 retailer’ and value the CPC higher to increase the dollar value of our Facebook participation.  That could pretty easily double the figure.   So, that’s an interesting statistic and a way to put a dollar value on it.

The art

…or intuition?  Leap of faith?  We know all about people’s use of social media and that they are engaged people from the data.  We also know that we’re bringing in more money and having more action online.  We can’t conclusively draw a straight line, though, to say that an individual action by us on social media will drive a specific dollar amount of response.

To use my earlier analogy, this same ambiguity exists in other fundraising.  While we have a pretty good idea more discovery calls will generate more cultivation prospects and ultimately gifts, there’s no formula that works every time.

I firmly believe we’re doing the right stuff to raise awareness, engage our social media audience and ultimately drive people to advocacy, event attendance and making gifts.

Q4: Have you noticed any results in fundraising you think are linked to Children’s social media efforts?

We’ve continued to make better websites, use social media to engage our audience and ask people to make gifts or attend events.  As we’ve done that, we continued to see great results in online revenue.  In 2009, we increased giving online by over 100%.  We saw a 34% increase from 2009 to 2010.  And, we’re on pace to increase over 30% again in 2011.  All of that is happening in an environment where overall fundraising is falling or basically flat.

Q5: When it comes to identifying the value of social media in fundraising, what do you think is the biggest challenge?

I’ll give two:

We’ve got to invent the future.  There isn’t much of a roadmap.  Most days, that’s exciting for me.  It means I get to try new things, experiment, learn and get better over time.  Still, sometimes it would be nice to say: do x, y, and z just like so-and-so and we can expect xx% of donors to give with an average gift between $xxx-xxxx.  That ain’t gonna happen.  So, I have a post-it note on my desk that asks “What is the next thing?”  It’s a fun challenge, but it’s a challenge nonetheless.

The other is related to better measurement.  I’m fortunate because our results have been pretty good, and there’s a strong commitment from our leadership and organization to being excellent online.  Still, I can’t firmly say 15% of our Facebook fans give with an average gift of $225.  We measure what we can and make a good case for what we’re doing online.  Nonetheless, more data is better.  So, I’m continually trying to solve the measurement challenge to refine and improve how we demonstrate the effectiveness of social media.

Q6: What kind of effort does it take to be successful fundraising online?

It takes long-term, sustained effort to maintain a good social media program.  You can’t do it overnight and you can’t do it do it in fits and starts.  You have to produce good, engaging content every day over the long-term.  You’ve got to think about each channel and customize.  That’s hard.

I’m not saying that every non-profit needs one or more full-time people managing their online effort.  I do think it means that as more and more people conduct more and more of their lives online, all nonprofits need to think about what resources they can commit and focus some sustained effort to improving their online properties.