Facebook will eliminate its 5 percent transaction fee for charitable donations made on the site, company co-founder Mark Zuckerberg said Wednesday, putting millions of additional dollars, and potentially much more, into the hands of nonprofits annually.
The announcement, made at an event here with dozens of nonprofit leaders in the crowd, was met with sustained applause.
“I know that this is something that a lot of you have talked to us about for a while,” Mr. Zuckerberg deadpanned. “Thank you for the feedback.”
Company executives also said Facebook will soon expand use of a feature that allows nonprofits to sync Facebook fundraising pages with their own fundraising sites. In other words, if an individual supporter creates a fundraising web page for a Susan G. Komen breast-cancer walk through the charity’s software system, that person can connect it with a complementary fundraising page on Facebook. Donations will be recorded on both sites in unison.
Facebook has experimented for months with such integration with fundraising-software company Blackbaud. The move could help ease the worries of some nonprofits that have made multimillion-dollar investments in fundraising software but now see more online charitable-donation activity shifting to Facebook.
Mr. Zuckerberg said Wednesday that the company, which has a valuation of $507 billion, will also establish a $50 million annual donation fund to match contributions transacted on the site. And he introduced an effort the company has dubbed Facebook Mentorship and Support, a partnership with nonprofits to foster such relationships between individuals who connect on the site.
He noted that Facebook this year announced a new company mission: to build community and bring the world closer together.
“We can’t do this by ourselves. This is a huge mission,” Mr. Zuckerberg said. “What our job really is to go see people who are already using this platform to do good and then build tools to help you do even more.”
Facebook releases only limited data on the volume of charitable donations made through its payment system. When asked Wednesday how much money nonprofits have taken in on the site, Emily Dalton Smith, head of social-good partnerships at the company, declined to provide figures.
“I will just say we’re really proud of it, and we’re really excited to do even more,” she said, adding that “we think 2018 is going to be a really exciting year and that we are going to be able to help our partners.”
Fees Scrapped
Facebook’s growing clout in the online-fundraising marketplace is indisputable. One example: This year on Giving Tuesday, the annual day of giving that took place this week, the company helped raise $45 million, according to Naomi Gleit, vice president for social good at Facebook.
On Giving Tuesday in 2016, the company said that it processed $6.79 million in donations from 100,000 people.
Facebook previously charged a 5 percent transaction fee for donations made on the site, a figure that is consistent with the industry standard. While Facebook had already announced it would waive fees for Giving Tuesday this year, fees from that single day of giving would have totaled more than $2 million.
With some large charities now raising hundreds of thousands of dollars or more on Facebook annually, the scrapping of those charges represents significant money.
“One of the things that we have heard a lot from our partners about and that we just thought would have a transformative effect would be eliminating fees,” Ms. Dalton Smith said. “We’ve been talking about it for a little while, and it is something which has had a tremendous amount of support inside the company.”
Disaster Fundraising
Facebook has been experimenting with charitable fundraising features for years. Since fall 2015, it has rolled out a series of increasingly sophisticated tools to be used by nonprofits as well as individuals to generate charitable dollars.
For example, Facebook now invites its users to create an online “fundraiser” for a nonprofit of their choice as a way to celebrate their birthdays. Facebook users can also create fundraising efforts for personal causes, much like people do on crowdfunding websites like GoFundMe.
Facebook has proved an especially powerful fundraising tool in the wake of natural disasters, placing donation solicitations in its users’ feeds. Donors gave $20 million for disaster response following Hurricane Harvey earlier this year, Ms. Gleit said at the Wednesday event.
Facebook has also been active in recent years in matching contributions made on the site. In spring 2015, for example, Facebook users gave more than $15 million in response to a deadly earthquake in Nepal, and the social network added $2 million to the haul.
In August, the company gave a $1 million match for fundraising on the site for the Center for Disaster Philanthropy and its response to Hurricane Harvey in Texas and Louisiana.
Setting the Terms
Not everyone is applauding Facebook’s emergence as a power player in online fundraising. Lucy Bernholz, director of the Digital Civil Society Lab at Stanford University, said in an email that the more dominant that Facebook is in nonprofit activities the worse it is in the long run for nonprofits.
For one, she says, Facebook controls donor data, key information used by nonprofits to build lasting communication with supporters. Without access to the data, nonprofits are unable to track donors and follow up when appropriate. In addition, Facebook gets to set the terms of the relationship with nonprofits, and the company has a track record of changing practices on what it promotes, demotes, and offers, Ms. Bernholz said.
“There is no reason to think it won’t continue to make those changes with little regard to how they influence nonprofits,” Ms. Bernholz said. “An organization could sink a lot of time into trying to nurture donations from people only to have Facebook keep the information and then change the rules.”
She also said she finds the promise of scale offered by Facebook to be hollow.
“There may be 2 billion people on the platform but they’re not going to support your nonprofit,” she said. “Your relationships and your inner circle’s relationships will support your organization — the rare event that goes big on Facebook is too elusive for nonprofits to be chasing. It’s unicorn chasing.”
