Peer Factor

In his epoch-defining book, The Long Tail, WIRED editor-in-chief Chris Anderson explores the statistically rooted theory of the same name. He suggests, “Our culture and economy are increasingly shifting away from a focus on relatively small number of hits (mainstream products and markets) at the head of the demand curve, and moving toward a high number of niches in the tail.” He romances this theory in the context of dominant market forces, including the diminishing physical requirements of distribution and the proliferation of individual content producers empowered by the Internet and new media technologies. His clarifying point is critical,“The Long Tail starts with a million niches, but it isn’t meaningful until those niches are populated with people who want them.” Ay, there’s the rub.

The Democratization of Production and Distribution.

Everything really comes down to the basic economic concept of demand and supply. The difference now is that the cost of reaching niches is reducing dramatically -– thus driving the democratization of production and distribution. In his addendum chapter, Anderson addresses the “the Long Tail of marketing.” The premise of this chapter is that the fragmentation of markets is requiring the fragmentation of marketing. More important, as I have proposed in earlier posts, the user-driven Web is turning the paradigm of traditional marketing communication on its ear.

“(With) individuals trusted more—institutions trusted less—the most effective messaging comes from peers. Nothing beats word of mouth, and as we’ve seen, the Web is the greatest word-of-mouth amplifier the world has ever seen.”

Understanding the Dynamic of Influence.

The integration of the multimedia Web and mobile technologies has forged a brave, new frontier. The medium is really no longer about the message. It’s about the relationship. Therefore, businesses and institutions must shift focus away from managing the message and move toward relating with the influencers. This means leveraging personal affiliations, relationships, and their voices. It also means listening and monitoring through resources, such as:

TechnoratI
Google Trends
Social Networks

The hyperlink is, indeed, the new response device. Traditional metrics, such as audience size and readership are becoming increasingly stale and even irrelevant. Now, response is measured in real-time interactivity—clicks and click-thrus. Action. Anderson says “The hyperlink is the ultimate act of generosity online.” Placing a hyperlink in content signifies tacit endorsement of the associated content and simultaneously gives the author a new brand of authority—the power to refer.

The Power of the Peer.

Given this new focus on the influencer, we as fundraisers could not be in a better place. The development “sweet spot” has arrived. We know that that people give to people, not institutions. And now, the cultural evolution of communication is giving our volunteer fundraisers more power and influence than ever before.

We just need to find the right tools to make them the most successful “askers”— and us the most effective “impresarios” of generosity. Let us know what you think. Ask a question, or leave a comment. Tell us know what you are doing to lake advantage of this rare moment in history.

Elaine Gantz Wright writes about social media that matters. Find her at elgantz@ yahoo.com

Accounting for Generosity

We forget that there is no hope or joy except in human relationships.
— Antoine de Saint Exupery,Wind, Sand and Stars

moneyOne of my newest colleagues posed a provocative question last week. He actually has no shortage of insights, and I certainly appreciate living in an environment where questions are as highly valued as answers. Indeed, his inquiry is at the heart of what we do. What inspires alumni to give to their alma maters? More broadly, why do we give in general? At face value, this seems like a simple question, but the longer I work in the field of philanthropy, the more I understand its complexities. Actually, a myriad of responses come to mind—to address a critical need, to save a life, a response to the right appeal from the right person at the right time, a passion for a cause, a sense of obligation, guilt, helplessness, or quite simply— we are asked.

Traditional fundraising methods prescribe a deliberate approach built around the carefully managed steps of cultivation, solicitation, and stewardship. I remember hearing a development consultant stating that he could not imagine a better profession. He described an almost spiritual dimension—saying he felt truly privileged and honored to be in the presence of others when they are exhibiting generosity. And I think he had a point.

In fact, I addressed the sacred component of giving today. Though the Church historically and adroitly integrates giving opportunities into its core experience each week, the last quarter of the calendar year provides an opportunity to renew one’s annual tithing commitment. Making the direct correlation between generosity, one’s income, and one’s spiritual journey is quite powerful, indeed.

But research has shown there may also be a scientific component. I was fascinated to see the results of a study by Paul Zak, a neuroeconomist at Claremont Graduate University. The concept of a “neuroeconomist” is intriguing in its own right, but his work links the trait of generosity with oxytocin, a hormone released by the brain in response to social stimuli. The study showed that participants who were given oxytocin gave significantly more money to a stranger than participants who took a placebo. Whether or not there is a “fundraising drug,” (what a concept?) I think the epiphany here for all of us in the social media space is that meaningful, real engagement opportunities can create an environment that nurtures of generosity and an increase proclivity to give.

“The hormone causes a general feeling of attachment to other people, even strangers,” Zak says. That may help explain why people donate to victims of natural disasters or to others who are in need. “Oxytocin is a social glue that holds us all together and makes us care about other people,” says Zak, who has shown links between the hormone and trust in past research.

“If you have enough nurturing, if you’re in a safe environment, you might be more likely to release oxytocin the next time you encounter a positive social stimulus,” Zak says. Interestingly, he says that about 2% of people constantly have oxytocin being released by their brains, so they stop reacting to it. “Those people lack empathy,” Zak says. Although they can still learn appropriate behaviors, the reactions are not natural for them. Ha! I think I have met some of those people. Oxytocin means “swift birth” in Greek.

Whether you consider the hormonal reaction or not, it really all comes down to relationships—more about the intangible than the tangible. It is often first an emotional impulse of the heart, followed by a logical justification. We are all interconnected as part of a larger human web, and I’m not necessarily talking about the WWW variety here. We are human beings driven by:

Compassion. Regardless of cultural and familial experience, people everywhere are moved to respond when others are in need.

Pleasure. Brain scans confirm what we experience feeling of pleasure when we give. In a sense, it’s really “hard-wiring.”

Habit. If we watched our parents give, we likely internalized that impression. We understand—on even an unconscious level—that this is what good people do.

Belief. Whether we consider charity to be based on religious beliefs, philosophy, or universal values, we as humans recognize an essential imperative to take care of each other. These ideas are larger than self-interest and benefit.

Responsibility. When others are hungry, sick, frightened, without shelter and livelihood our society is put at risk. Our education institutions are driving solutions to many of society’s most pressing issues.

Legacy. When we give we know that we influence the future, sometimes only immediately and sometimes for a very long time. By creating a memorial endowment fund we keep our name and memory alive in the community long past the obituary.

The unknown. We may even have unknown reasons for giving—some even unknown to ourselves.

What do you think? And how is social media impacting generosity?

Elaine Gantz Wright writes about social media, fundraising, and other communications phenomena. Please post your comment below and join the conversation.

Hire me: elgantz@ yahoo.com.

The New Peer-to-Peer Potential

hand
The Giving USA Foundation/Giving Institute released its Annual Report on Philanthropy for the year ending December 31, 2008 in June of this year. Notably, despite the impact of the recession and arguably the most challenging economy since the Great Depression, total giving to charitable causes in the United States reached an estimated $307.65 billion.

The key finding here is that individual giving continues to account for the largest percentage of overall giving at 75 percent of the total. Individual giving is an estimated $229.28 billion, (down by 2.7 percent over 2007 with a -6.3 percent adjustment for inflation). Education organizations received an estimated $40.94 billion, or 13 percent of the total. Gifts to this type of organization decreased 5.5 percent with a -9 percent adjusted for inflation.

As fundraisers, the path is clear. Individuals represent our greatest opportunity for recovery and growth. That said, our methods of securing individual donations definitely deserve some scrutiny and consideration—especially in light of rapid-fire technological changes impacting the landscape.

Just how can we maximize individual giving? And what are the fundamental trends and challenges influencing the proven solicitation process?

Throughout my career, I have heard mentors chant, “People don’t give to institutions; they give to people.” It is a time-tested fundraising adage, and it defines the essential nature of one-on-one solicitation at the very heart of fundraising. The process of one person asking another to give is what fundraising is all about. One-on-one meetings and conversations are the moments where the school’s case for support is made most effectively with a blend of passion and hard facts. It is the personal relationships between volunteer solicitors and donors that generate funding and continuing support for institutions across the street and across the globe. Research, cultivation and stewardship are all part of the solicitation process, but nothing happens until—we ask.

As we learned from the game-changing success of Internet fundraising in the last presidential campaign, closed–door handshakes and smoke-filled rooms are anachronisms. One of the most remarkable aspects of the Obama groundswell was the return of grassroots participation—the return to people. That is, people reaching out—one to another—to ask for support. Whether online or on the front porch, people asked— peers and strangers.

The automation of the contact process was nothing short of amazing—phone scripts downloaded seamlessly to kitchen and dining-room computers all over the nation and people giving up their Sunday afternoons to attend calling parties with cell phones in hand. Real-time tracking reports updated party calling returns as it the volunteers were dialing—thus enlivening the competitive spirit along with the political passion for change.

This was the fruitful marriage of personal peer-to-peer power and technology.

Today, the world of online fundraising tools and platforms is evolving rapidly. Social media is a radical new milieu impacting the time-honored one-on-one tradition. Think about Facebook CAUSES with more than 33 million monthly active users and social action sites such as www.change.org. or www.care2.com.

Everyone is trying to figure out how the infuse electronic appeal with the authenticity of human emotion. Photos, audio, video—innovations are expanding exponentially. Charity:Water has used video as the medium for its organization’s message very effectively.

So, what are some other opportunities tools and methods? I am interested in learning how schools, universities, and institutions are absorbing these tactics. What’s working? What’s not? What’s changing? What needs to change? How can we best automate and streamline the peer-to-peer solicitation process?

In a world with so many demands on time and attention, we as fundraisers will be more successful if we can appeal to the behaviors and preferences of those making the asks—our volunteers, ambassadors, and emerging Gen X leaders of today and tomorrow.

Contact me at elgantz @ yahoo.com.

Secrets of Soliciting the Wired Wealthy

The International Association of Fundraising Professionals Conference in New Orleans last week was rich in practical information, memorable speakers—and luscious culinary delights, of course! One of the most “meaty” presentations I saw was given by Vinay Bhagat, founder and chief strategy officer of Convio; Colleen Mc Culloch-Learch, senior research analyst at Edge Research, and Beth Wallace, vice president of digital marketing at Conservation International, on using the Internet to connect with donors.

One of the most useful pieces of intelligence emerging from the Wired Wealthy Study they discussed involved segmentation. Until now, we have tended to segment or donors demographically – “Younger females respond this way, and older males behave that way.” This new study actually uses psychographic “cluster” analysis to categorize donors by behaviors. Here is the breakdown for the nearly 3,500 respondents who contributed $1,000+ over an 18-month period:

Relationship Seeker (29%): Most likely to respond to opportunities to connect emotionally with your organization online. However, they delivered the
lowest average gift.

All Business (30%): Do not appear to be looking for a relationship or emotional connection. They are purely transaction-oriented. They seek ease, clarity, and functionality.

Casual Connector (41%): The largest of the three clusters, this group appears to “split the difference” in terms of attitudes and preferences. As group, they need more hand-holding. They are more difficult to predict and satisfy—often seeking an “intellectual connection.”

Across the board, donors are expecting a “high quality of engagement “and a pleasant user experience. Interestingly, these respondents are left “generally uninspired” by website appeals. They feel many nonprofit websites are not well-designed, do not make it easy to give, and are not user-friendly. They do not want to wade through screens of dense copy. Attention spans are limited. And among these donors, there is a strong appetite for chats, photo-sharing, video, blogging, and IMing—particularly among “Relationship Seekers.”

Another significant finding was that donors want more control over the specifics of the communication—with lots of opportunities for opting in or out, selecting content, and specifying schedules. Most of all, they really like tax receipts, progress reports—and lots of success stories. So, know your donors and understand how they behave and prefer to communicate—online and off!

In addition, the study suggested that it is useful to look at all of your major donor touch-points. Are they relevant and effective. Hone your value proposition and core message. Key here is to “sell on steak, not on sizzle.” Use your online communication to build confidence and cultivate relationships. And shy away from including major donors in your online giving strategy. Here are a few other important points to remember:

1. Treat online donors as partners.
2. Create and sustain a disciplined narrative with complete story lines.
3. Build a high ratio of cultivation messages to appeals.
4. Nurture 2-way communication.
5. Provide easy ways to pass the word online.
6. Use video.

In general, get smart, deliberate, creative, and strategic about your online communication plan.