Recently, Daryl Hatton, a thought leader in philanthropy and our CEO, had a chance to speak with Nav Nagra from Vantage Point and discuss the emerging not-for-profit trends in digital fundraising and what organizations can do to stay on top and innovate. Daryl uses his expertise to break down how organizations can rethink the relationship between digital media and fundraising.
Nav: What did 2018 bring to the nonprofit world?
Daryl: 2018 was a really interesting year in a whole bunch of different ways. One interesting thing was that, anecdotally, we learned that overall giving was slightly depressed in 2018. This hasn’t been published yet, but we are getting whispers in the industry about this in different places that we have seen to be challenging to overall giving. Online still doing pretty well, but some other methods of giving have not been.
The other thing that was interesting is that, specifically for us and the crowdfunding world, visibility on Facebook has declined 25% year over year for the last two years. So the ability for causes to get their information out into the community, and to build a community around it, is greatly challenged compared to what it was a couple of years ago.
Nav: What caused for that decline?
Daryl: Well, Facebook is trying to both to monetize their own assets, and get more ads, essentially, into your feed, but ramp up the competition to get into that feed. Every nonprofit is having the realization that “Gee, we need to be part of the Facebook world, or we need to start building our own community”.
Facebook is a room with a limited capacity, and if you’re just cramming more people, each one of them ends up with less time to talk or get visibility. As a result, the individual visibility for each post is declining, because there is so much competition. A cause is competing against regular media, like television, radio and youtube, and everyone else trying to build their brand, other businesses that are trying to promote their products, and of course all your personal friend type of content.
There is just a tremendous amount of other content to pump into a very narrow channel and as a result, people are seeing less of it.
Nav: Interesting. I am curious to know what nonprofits expect to see for this coming year particularly?
Daryl: There is a whole bunch of stuff coming up. Another reason behind the decline of social media visibility, is that people are starting to distrust Facebook. With all of the breaches that happened this year and all of the challenges around privacy, people are more reticent to sharing, or at least they’re wanting to focus their online communication down onto a smaller group. People are becoming less broadly social and a little more privately social, and as a result we have seen a real move to what we call ‘dark social’. Dark social is non-public social sharing. The best example would be using Facebook messenger; where you used to publicly share it with all of your friends, you will now put it into a much smaller private group through messenger or email. Buzzsumo did a measurement of this at the end of the last year, and they found that 65% of traffic is now dark social, compared to public social. The challenge with that, for all of us at nonprofits, is it’s really hard to measure private communication – that’s the whole point!
So, knowing what’s been effective and how people are communicating, we just have more of a vague idea of what they’re doing; as opposed to in the past, when we used to be able to very specifically track metrics like post shares and so on.
To be successful in 2019 and beyond, we are going to have to start figuring out how to communicate with dark social, and that’s less about technology, and about more social engineering. How do we encourage someone to share in a way that we might be able to track a little bit more? Some techniques that we’ve got, are things like using a little url shorteners that can tell you when people click on links even though they’re not publicly shared, and building that into our platforms so users don’t have to think about that technology.
It’s really about encouraging people with content that they’ll want to share privately instead of publicly. More specifically, that might be sharing the impact that your donation created, as opposed to just the fact that you donated, or just posting about how you really like the cause. For example, if you said, ‘hey I fed three kids this week’ as your social sharing, that’s really different than just saying ‘I really appreciate the work this children’s charity is doing’, and the engagement in that will be quite different too. There’s a lot of depth in these different techniques, but it’s going to be one of the bigger challenges that comes forward in this next little while.
Nav: I’m curious then, because that sounds like a huge change, and speaking personally, I don’t think I saw that coming in a way, the private social media interactions becoming the norm and even the way to go. So what would you say to nonprofits about how can they stay on top of these trends, and what they can do to bring these new ideas to and innovate within their organizations?
Daryl: Well, there’s a lot of different ways to do it. And one of the fundamental ways is to stop thinking about the nonprofit world as completely different from the for-profit world. The for-profit world is very aware of the competition they’re in, and that they have to get their message out, be visible, and communicate the value of what they’re doing. We tend to think about the good work that nonprofits do, but we don’t often break it down into very granular form. One of the techniques is to start thinking about that point of view. For example, if non-profits start following what’s happening in the e-commerce world, a useful thought experiment is to think about your non-profit as selling to the donor. They are your customer and you’re selling them the experience of giving. One of the best ways to learn how to do this, is just to play it out as a thought experiment. What if we have to sell them the experience of giving to us? What could we do to make it that experience better, so they may want to give again?
This may sound crass, but it’s not. it’s actually very practical, because if your donors are really happy with their experience, which is their discretionary spending, they will spend more. That’s everything what we are trying to do – we want more money to fund the important work we do, so why not make it easier and more enjoyable for our donors to support us to do that by improving their experience? That can be things like following up with them, checking in afterwards so they know their gift was appreciated. Saying, ‘did you know that your gift created this type of impact in the world’: YOUR gift, not every gift, not all the gifts that we have gotten, YOUR gift. Your gift helped feed three children this week.
It’s very important to the ‘Digital Native’ demographic to know that impact. There’s a long conversation we can have about the shift in donor demographics, and why those things are so important moving forward, because the way we used to do it doesn’t work very well any more. That’s one example of a technique, pretend you’re a for-profit business for just a minute and think it through – it can really help you become more effective as a fundraiser.
Nav: What is a digital native?
Daryl: Well, we have Boomers and Gen X, who were born prior to the internet really coming around, and then we have Millennials and Gen Z, who have had the Internet as a part of their lives since birth or childhood. As a result, their methods of communication and socialization are significantly different. If you really want to see the difference, the way we used to get money from a Baby Boomer donor, is by sending a fun little calendar printed with all sorts of colors, and it would come with a self-addressed, stamped envelope for you to return your gift back to us in. To the Millennial, all they see in that process is that we’re killing a bunch of trees, processing them with really awful chemicals, shipping it to them in a carbon belching truck, asking you to write a paper transaction back to us and stuff back it an envelope – and all of this stuff probably non recyclable! How are they supposed to want to donate to your cause after that?
This a massive transformation – what used to work very well is offensive to this new group. We have to start adjusting how we look at donor communication, and it doesn’t hurt to start focusing on digital natives, which includes Millennials and Gen Z, since they’re leading the way. How many Boomers are now changing the way they recycle, or what kind of car they drive, because they’re becoming part of this new way of thinking?
Nav: You speak about communicating through generations, and understanding that one thing can mean something completely different to other generations. In what ways can be smaller organizations take note of these things? Where can they start to find these things out?
Daryl: One of the best ways is to listen to the volunteers that are already have coming in; actually sit down and listen to what they are doing, what they are interested in.
Many causes are run by people who’ve been with their organization for quite some time, and they’re comfortable in their existing patterns. These things are very foreign to them – a common phrase we hear is ‘I don’t use Facebook’. Well, how you can understand digital marketing if you’re not understanding the very communication pattern that you are having to market into? One way is to surround yourself with young folks who are willing to help you understand and share insights on what would appeal to them personally. Not because you need to check off every box when it comes to their preferences, but to get more of a general sense of what’s important to them, and then help to tailor your communication to that.
The other thing is simply start running tests. The biggest thing for non-profits to realize is that these don’t have to be completely huge, revolutionary changes. For example, using Facebook fundraising is one of the things that little help you learn what is appealing to your community and how you can start learning how to build a social media community. Then, you’ll want to transition those donors into working with you more closely so that you can have a long term connection with them, because that’s one of the things you can’t do with Facebook – its campaigns can be one-offs. That’s just an example, but start with small experiments like that and don’t overthink it. Just try something – because we tend to be too slow to try. Experimentation is a really good thing in working out these types of problems.
Nav: And speaking experimentation, what sort of new trends are you most excited to see in philanthropy, social media, or both?
Daryl: There’s so many! As we discussed, we’re moving into this Digital Native-dominated world, and when it comes to donating to charity, they demand to know more about the impact of their gift. So, technologies have to evolve to make it easier to communicate the impact of their specific gift.
That can start with something we call Micro Projects. That’s when you break your overall goals down into a whole bunch of smaller projects, that need maybe $500, $1000, even $5,000 of funding. If a donor makes a small contribution to a project with a large goal, they don’t even feel that they moved the needle. If I give $100 bucks to a thousand dollar project, you see it go a lot further, and get a lot more satisfaction. That’s a great feeling to have, and if you repeat the ask later on the year, they can feel like a hero again. Whereas, if I give you $100 on your 2 million dollar budget and I feel like I actually don’t count to you, or like my gift didn’t do anything important for you. So the idea of breaking it down into Micro Projects is one of the trends we saw emerging over the last year that we think is really going to take off.
A lot of causes have trouble thinking about how to break their story up into micro projects, but it’s easier than you might think, because it really means you need to start focusing on the results of the work you do, and what any little units of growth are in that work.
Nav: Is there anything else you feel our listeners really need to start thinking about in 2019?
Daryl: One quick little trend that they’d want to pay attention to is what we call the race to zero. Non-profits always wanted to have fundraising for free, and now, it’s starting to happen. FundRazr offers it, so you can use all the power over every sophisticated platform for free. You still have to pay your paying processing cost, but we let you do the rest for free because we can get your donor just pay a single extra – with an optional tipping – and take care of the platform cost for you. The warning is to be careful about long-term contracts, say if you got a vendor who’s “feeing you to death”. With the regular recurring lock in for three years kinda contract, you might want to take a breath before you sign the next contract, because your pricing options are going to get some much better over the next little while.