Can a Small Charity Use Social Media and On-line tools to raise new Revenue? Part 1

     Most nonprofit leaders would likely agree that on-line tools and social media have some place in the marketing and fundraising programs for their charity. However despite a belief that these tools may be useful most charities are raising less than ten percent of their revenue on-line. In a world that is becoming quickly more and more technologically savvy nonprofits will need to become fluent and successful in using these tools. It is possible that as most social media channels are becoming easier to use and they are cost effective, that their use may become an equalizer in allowing small charities to compete with larger charities with larger promotional budgets.         

           Some might argue that segments of the charitable sector can be slow to embrace new technology or advancements. A growing segment of our population is becoming more and more comfortable with on-line financial transactions, to the point that often consumers are annoyed when a company does not offer this option or the option for mobile transactions. Nonprofits need to find ways to increase the proportion of the revenue through applications that are becoming preferred by their donors.

           Small charities are at greater risk to fall victim to loss of revenue as they are at times reluctant to use scarce resources to invest in some of the web-based or on-line tool development that their donors may prefer. This problem can be further compounded as small charities may be reluctant (or may feel they do not have the resources) to invest staff time in creating the visibility they may need to become competitive with other charities in their marketplace. However the use of social media is a way that a charity can increase its visibility to potential donors at a very low cost.

            Over time it is likely that donors will only give to charities that afford them the ability to donate in the method that they prefer, and with the passing of time more of these donors will prefer on-line transactions. In essence small charities will need to embrace these changes or will risk losing their current donors. Brinckerhoff (2010) describes: “this is all about meeting techspectations. If you want to get someone born after 1987 to come to your weekend volunteer activity you’d better be on Face Book. For someone born between 1980 and 1985 you better be on Twitter (p.193).”  Leaders of nonprofits will likely find it discouraging to invest in expensive software to only avoid losing ground in their revenue generation. Investing in this technology is more attractive if there is also a way to leverage its capacity to attract new donors and new sources of revenue

          Authors such as Reynolds describe one of the reasons charities may want to employ social media. She (Reynolds, 2011, p.16) points out: “excellent organizations stay close to their customers, employees and other constituencies.” She also points out an additional reason why nonprofit organizations might want to engage in some of these strategies. Reynolds (2011) describes:” social networking allows companies (both profit and nonprofit) the ability to create, maintain and extend their positions within these sites that connect potentially millions of people to one another at little or no cost.” The research identifies that not unlike the for-profit marketplace traditional forms of advertising or marketing are becoming less effective and less sustainable for charities. Authors such as Miller (2009) point out:” In place of once trusted institutions consumers are increasingly looking for alternative sources of information and advice to help guide the myriad of decisions they make in everyday life, including their purchasing and donating decisions. In particular, in search of authenticity and independence, they are turning to the opposite end of the scale from the big traditional sources. To friends, family and countless others that they have never met, but through the use of online recommendation activities that they treat as informed and trusted peers” (p.366)”. 

             Findings and suggestions such as these suggest that not only should charities engage supporters through the use of social media platforms, but they should change the way they think about and approach promoting their organizations. Authors such as Miller (2009) suggest that charities should think about the promotion and their activities  in a completely different manner:” Miller (2009) describes: “The future of advertising is to stop interrupting what people are interested in and to be what people are interested in.” This type of perspective illustrates some key findings and direction for a nonprofit. The research identifies a need and benefit in truly harnessing the power of the network to transform their relationships. That is instead of considering what messages to push out to followers’ charities must create materials that their champions and followers themselves will be interested in and motivated to push out themselves to their networks.

              Fortunately some of the themes identified which could improve a nonprofit’s results in employing these media do not appear to be as cost laden as some traditional approaches to marketing and fundraising. This literature suggests that if used wisely small charities may be able to use social media and other online tools to compete with larger charities as the majority of large charities are not using the tools as effectively as they could. Some of the major advantages of social media usage for small nonprofits are the ability to develop new relationships with new stakeholders. The nature of any type of relationship is dependent on back and forth communication, not merely pushing information out. That is, the research suggests that there is benefit in using these tools to educate and be transparent with potential donors and stakeholders. However the research also suggests that the most significant features of these tools is the ability to really engage and involve stakeholders in a new way and in a real relationship. It is possible that these tools will allow nonprofits to engage individuals who would not typically view themselves as philanthropists but would gladly share a post or try to engage there friends in supporting their favorite cause. In part 2 of this article I will talk about how a small charity can combine on-line tools and social media to maximize their effectiveness for their organization.

References

Brinckerhoff, P.C (2010) Mission-Based marketing: Positioning your not –for –profit: New   

          Jersey: John Wiley &Sons Inc.

Miller, B. (2009) Community fundraising 2.0-the future of fundraising in a networked society?

         International Journal of Nonprofit and Voluntary Sector Marketing. V14, n1: 365-371.

Reynolds, C. (2011) Friends who give: Relationship-building and other uses of social networking

          tools by nonprofit organizations. The Elon Journal of Undergraduate Research in

          Communications, v2:15- 40.

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