Facebook began an expansion Thursday of a fundraising tool that will soon allow its 160 million American users to solicit donations on behalf of nonprofits.
The new fundraising feature is the latest in a series of forays the internet company has made into the world of online charitable fundraising, and it fuels a growing trend in what experts describe as a “do-it-yourself” or “independent” style of fundraising.
“It is another indication that for nonprofit professional fundraisers, they have to figure out how to direct more of this activity in their direction,” said David Hessekiel, president of the Peer-to-Peer Professional Forum. “We are living in a time in which consumers can do their own thing on their own schedule, whether it is watching television or deciding to fundraise.”
With the expanded version of the tool, users of the social network can create dedicated pages to run individual fundraising campaigns to benefit registered 501(c)(3) organizations. The goal is for the pages to serve as storytelling hubs, with users posting write-ups, photos, and videos introducing friends and relatives to nonprofits and causes dear to them.
Registered charities can sign up with Facebook immediately to receive donations raised on their behalf. Once the company verifies a charity is registered with the IRS, users can establish pages tied to that organization.
Facebook will keep 5 percent of gifts to cover operations and payment processing, with transactions taking place on the site. In an interview with The Chronicle, Naomi Gleit, vice president for social good at Facebook, said the company is not looking to make a profit on the tool.
Facebook will issue payments to nonprofits every 15 days for cumulative donations over $100. If donations don’t hit $100, the money will be held and rolled over into the next 15-day period and paid out thereafter.
November Pilot
At the time of launch Thursday, 1 percent of Facebook users in the United States had the ability to create one of the new fundraiser pages. It’s a sample size regularly used by the company to test new features and widgets. Facebook will scale up within weeks to make the tool available to all U.S. users.
While only American Facebook users can create the pages and only American nonprofits can accept donations, people from around the world can give. Facebook will process donations from the 39 countries where its payment platform is operational, Ms. Gleit said.
The new launch builds on a tool Facebook debuted last fall that allows charities to create their own dedicated pages for fundraising campaigns. As part of a pilot announced in November, 37 nonprofits tested the new feature.
Ms. Gleit said that effort raised hundreds of thousands of charitable dollars and provided insights into what the expanded product should include. Notably, the nonprofit-created fundraiser pages that performed best were those that included compelling human-interest stories, she said.
“One of the things we learned is that we need to create more personal channels for the fundraiser creators to communicate with potential donors,” Ms. Gleit said.
Social Media for Social Good
Facebook has been experimenting with charitable-fundraising features for years, although it only formally announced the creation of what it calls its social-good team in September 2015.
Last fall, in addition to piloting the nonprofit-created fundraiser pages, the company began testing a modified “donate” button that allowed for processing of credit transactions within the internal Facebook payment system. Previously, the social-media site’s donate feature directed users to charities’ websites to complete transactions. In 2013, Facebook and 19 nonprofits tested a donate button in which payment information was entered directly into the site.
Facebook has proven an especially powerful conduit for donated dollars in the aftermath of major disasters. In April 2015, for example, its users donated more than $15 million for emergency relief in the wake of a deadly earthquake in Nepal.
Facebook has more than 1 billion active daily users, according to its most recent quarterly earnings report, with 989 million logging on by mobile devices and spending, on average, more than 50 minutes on the company’s apps.
It’s too soon to know what traction the newly announced tool might gain. Still, with Facebook’s tentacles reaching around the globe, it raises questions about what kind of competition it might present for similar fundraising platforms.
Ms. Gleit declined to compare the new Facebook product to those already in the marketplace, saying it is meant to complement other fundraising tools. They are most powerful, she added, when put into the hands of ordinary people.
‘The Pendulum Is Swinging’
The new Facebook tool is “good news,” said Donna Wilkins, chief executive of Charity Dynamics, a company that specializes in helping charities expand the reach of such fundraising campaigns on social media. She noted that LinkedIn recently added a feature that allows its users to list nonprofit-board commitments, and she sees a bigger trend in which philanthropy is becoming part of people’s social profiles.
“It is uncomfortable to ask other people for money, even though it is for a good cause,” Ms. Wilkins said. “So if Facebook is putting it in a way that is easy for people to do that, that is an interesting proposition.”
Still, she and other veterans of donor-driven fundraising said it is unlikely the Facebook tool will change the execution of big charities’ long-established, proprietary peer-to-peer fundraising operations, some of which raise tens of millions of dollars annually. These groups use customized software and arm their supporter-fundraisers with carefully crafted tools to help them attract the most dollars possible.
“If I’m the American Cancer Society or Muscular Dystrophy Association, I’m happy Facebook is going to help me pick up some extra dollars, but that doesn’t mean I am getting rid of my signature program,” Ms. Wilkins said.
Nor does the new Facebook tool pose an immediate threat to the biggest of the existing charitable fundraising sites, she and others argue.
“There are established players in this space, like Classy, like CrowdRise, who have done incredible work for many years,” said Mason Weintraub, director of digital engagement at Oxfam. “Their portals have grown exponentially. I wouldn’t expect that to change.”
Still, fundraisers need to be paying close attention to what is happening at Facebook, said Mr. Hessekiel of the Peer-to-Peer Professional Forum.
The money being raised by such efforts is still “very much less” than what traditional, charity-guided peer-to-peer programs bring in, he said, “but the pendulum is swinging in that direction.”
