Fundraising Through Online Social Networks: a Field Experiment on Peer- to- Peer Solicitation

Transcription

1 Fundraising Through Online Social Networks: a Field Experiment on Peer- to- Peer Solicitation Marco Cas)llo (ICES, George Mason University) Ragan Petrie (ICES, George Mason University) Clarence Wardell III (TinyGive, LLC) October 18, 2013 Science of Philanthropy Conference University of Chicago

2 Motivation Online giving important for many chari)es (8% of money raised) Peer to peer common Fundly (blog) es)mates 10 )mes more likely to give if asked by a friend, give 52% more Online examples Causes, Donors Choose

3 Direct asks are effec)ve One of the main reasons people donate is because they were asked or given the opportunity. Also, because they were asked by someone they care about Asks by friends are not for free though Asking a friend to donate may imply a social cost You may be asked to return the favor in the future

4 LiWle is know of costs and benefits of fundraising through online social media Or, what determines its success Especially given how common it is

5 Research Strategy Use a field experiment with an online giving community Manipulate normal checkout procedure Allow donors to communicate to their social network, via Facebook, a credible signal that they donated and ask friends to donate too.

6 Subsidize the solicita)on with an addi)onal dona)on to measure costs of different ways of asking Evaluate effec)veness of each mechanism Es)mate costs and benefits

7 Background Power of asking (Carmen, 2003; Meer, 2011; Andreoni and Rao, 2012) Social context, audience and asking (Charness, Luca and Rus)chini, 2006; Andreoni and Bernheim, 2009; Bekkers and Wiepking, 2011; Karlan and McConnell, 2012; DellaVigna et al, 2012) Social informa)on, networks and solicita)on effec)veness (Fowler and Christakis, 2011; Rand et al, 2011; Goel et al, 2012) Matching, Rebates and Other Incen)ves (Karlan and List, 2007; Eckel and Grossman, 2008; Karlan et al, 2011; Huck and Rasul, 2011)

8 The two environments in which we are working

9 Facebook 98% of online users use some form of social media FB is a popular online social network 1.4 billion Facebook users worldwide 56% say have a profile on Facebook (2012 poll by Browser Media)

10 Environment in which people can communicate informa)on, photos and videos to friends (those you invite) Own wall: you or friends can post updates or photos that all your friends can see Private message: send a direct message to a friend that only he can see

11 Online Giving Community Large, nonprofit online giving community Web site has info on chari)es and projects looking for funding Easily searchable plagorm for donors and secure way to donate Vets projects for legi)macy Excellent reputa)on low admin costs and proper project screening Users search site, click on project, put dona)on in cart, secure checkout

12 Ways of asking We use two common ways of asking Direct ask to one friend (private message) Diffuse ask to many friends (own wall post)

13 May be costs Nuisance of using Facebook or being logged in Comple)ng the post (to wall or sending message) Social cost of asking (direct or diffuse), appearing as a show- off by announcing dona)on, etc Want to examine the effec)veness across asks

14 What might we expect Solicita)on rate could increase because you can credibly say you gave Or not, because you are modest Add- on dona)on perceived as an appeal from charity and altruists post more Asking a favor is costly, if have to pay it back Direct asks may be more costly than diffuse asks Subsidy lowers cost and increases posts for any ask method Nuisance cost to complete the task

15 Experiment Online giving community Jan 15 Feb 28, 2013 Altered normal checkout procedure Post to Facebook wall a friend Do not need to have a Facebook account. 2 x 3 design Credible signal that you donated Ask friend(s) to donate too Post to FB wall, FB direct message No dona)on, $1 dona)on add- on, $5 dona)on add- on in donor s name

16 Not qualified mul)ple dona)ons, gio card, special campaign dona)on, previous par)cipant normal checkout Some qualified shown normal checkout. Compare to non- qualified to address selec)on in characteris)cs and generated dona)ons. Can see if credible signal of dona)on mawers

17 At checkout Click to post to your Facebook feed or Click to send a private message to one friend on Facebook Pop- up window (same in wall and message) I made a dona)on to XYZ Charity. Join me in dona)ng too. If not already logged into FB, prompted to log in Same propor)on (45%) across treatments already logged into FB when see experiment screen.

18 Field experiment Donors did not know they were in an experiment Natural part of checkout Data we could collect on donors limited because of privacy rules on Facebook no data on sex, which friend sent message to, number of friends, loca)on, text of message sent, etc. Most data comes from online giving community

19 Treatments No dona3on $1 dona3on $5 dona3on FB wall Wall- $0 n = 606 Wall- $1 n = 632 Wall- $5 n = 608 FB private message Msg- $0 n = 587 Msg- $1 n = 609 Msg- $5 n = 619 Normal checkout (FB wall, ) Normal- Q Qualified n = 603 Normal- NQ Non- qualified (special campaign, mul)ple projects, previous par)cipant) n = 1323 Total n = 5,587

20 Normal Checkout

21 Normal Checkout

22 Normal Checkout FB wall

23 Normal share on FB wall

24 Normal checkout private message

25 Experiment Screen Shots

26 Private message - $0

27 Private message - $0 I I made a dona)on to xyz charity. Join me in dona)ng too.

28 FB wall - $0

29 FB wall - $0 I I made a dona)on to xyz charity. Join me in dona)ng too.

30 FB wall - $1

31 FB wall - $1 I I made a dona)on to xyz charity. Join me in dona)ng too.

32 FB wall - $5

33 Results

34 Some descriptive statistics About 65% first- )me donors. Similar across all treatments. (52% for non- qualified) Reasons for disqualifica)on Special dona)on campaign (35%) Mul)ple dona)ons (21%) Mul)ple reasons (22%) Previous par)cipant (22%)

35 Randomization Check: Donation at Checkout Dona3on Mean Median 0 Treatments

36 Randomization Check: Donation at Checkout Percent 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Wall- $0 Wall- $1 Wall- $5 Msg- $0 Msg- $1 Msg- $5 Normal Dona3on Amount

37 Take- up and Completed Share Rates

38 Click to Post 35% 30% 25% Percent 20% 15% 10% Wall Private Message 5% 0% $0 $1 $5 Subsidy Amount

39 Completed the Post: about 1/3 roll off 35% 30% 25% Percent 20% 15% 10% Wall Private Message 5% 0% $0 $1 $5 Subsidy Amount

40 Click to Post and Completed the Post Click to Post Completed the Post 35% 35% 30% 30% 25% 25% Percent 20% 15% Wall Percent 20% 15% Wall 10% Private Message 10% Private Message 5% 5% 0% $0 $1 $5 0% $0 $1 $5 Subsidy Amount Subsidy Amount

41 Costs

42 Nuisance costs to using Facebook click to post take- up rates Higher costs Lower costs Not Logged into FB Logged into FB 45% 45% 40% 40% 35% 35% 30% 30% 25% 20% 15% Wall Private message 25% 20% 15% Wall Private message 10% 10% 5% 5% 0% $0 $1 $5 0% $0 $1 $5 * Level effect of FB nuisance costs similar patterns across methods and add-ons

43 Nuisance costs to using Facebook complete the post rates Higher costs Lower costs Not Logged into FB Logged into FB 35% 35% 30% 30% 25% 25% 20% 15% 10% Wall Private message 20% 15% 10% Wall Private message 5% 5% 0% $0 $1 $5 0% $0 $1 $5 * Level effect of FB nuisance costs similar patterns across methods and add-ons

44 Nuisance costs to using FB Or, those logged into FB are different Want to isolate addi)onal nuisance cost of comple)ng the post, either on wall or sending a message Look at each ask method separately Examine increase in take- up as add- on dona)on increases This should reflect remaining (e.g. social) cost for each method

45 Residual costs to ask 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Logged into FB $0 $1 $5 Wall Private message

46 Residual costs to ask Logged into FB Change in take- up as add- on increases 45% 25 40% 35% 30% 25% 20% 15% 10% 5% Wall Private message Percentage points Wall Private Msg 0% $0 $1 $5 0 $0- $1 $1- $5

47 Residual costs to ask 25 Change in take- up as add- on increases Percentage points Wall Private Msg 0 $0- $1 $1- $5

48 Residual costs to ask 25 Change in take- up as add- on increases How much more take- up increases as add- on increases between Wall and Msg Percentage points Wall Private Msg Percentage points $0- $1 $1- $5 Difference in Difference between Wall and Msg 0 $0- $1 $1- $

49 Residual costs to ask 25 Change in take- up as add- on increases How much more take- up increases as add- on increases between Wall and Msg Percentage points Wall Private Msg Percentage points $0- $1 $1- $5 Difference in Difference between Wall and Msg 0 $0- $1 $1- $ Absent nuisance costs, the residual costs to send a private message are larger than to post to one s wall. The increase in take-up when 4 more dollars are added is significantly larger with PM than with wall.

50 Additional Checks Take- up rates similar by dona)on amount (might be a proxy for wealth or how much like charity) Restric)ng op)ons does not affect take- up rates 10% take- up Wall- $0 post 9% take- up Wall post for qualified donor with normal checkout No evidence that credible signal of dona)on affects take- up or completed share rates

51 Effectiveness

52 Web TrafRic Number of clicks on hyperlink Wall PM As propor)on of completed posts Wall PM $ % 90% $ % 42% $ % 34%

53 Donations 1.2% of peer- to- peer solicita)ons resulted in new dona)ons (sig diff from zero, pvalue=0.025) Similar to returns from mail campaigns (~2% response rate, Karlan & List, 2007, Eckel and Grossman, 2008). Dona)on amounts about same as the asking donor ($49.00) $245 in total in new dona)ons

54 Dona)ons came from Wall only, none from private message 5 dona)ons in total All from Wall- $1 1.89% from Wall (p- value=0.025) 0% from private messages

55 Cost and BeneRits Wall yields more posts than PM Extra $4 cost of add- on gives small increase in posts (only 2 percentage points for those logged into FB) Suppose target those already logged into FB (more responsive)

56 Suppose spend $100 on Wall- $1 100 posts, 1.89% donate (assumes return on wall posts all the same) Return: 100 x 1.89% x $49.00 = $92.61 Suppose spend nothing, Wall- $0 38 posts Return: 38 x 1.89% x $49.00 = $35.19

57 If view $100 spent as cost, then lost money ($7.39) Another way to think about it Take $100 seed dona)on from a donor Instead of using it for matching dona)ons or leadership grant, encourage donors to post to FB Randomly assign donors to Wall- $1 or Wall- $0 Get 138 posts for $100 Generate $ in new donor money 27.8% return on $100 investment

58 Things to consider Low response rate (1.2%) May be underpowered Effect of private message may not be zero Add- on to post a surprise If donor an)cipates this, could crowd out dona)ons Do not know if donor asks a friend who would have donated anyway

59 Summary Examined a common mechanism of peer- to- peer fundraising through online social networks Es)mated costs and benefits to chari)es of incen)vizing donors to fundraise from their friends Nuisance and social costs to fundraise 28% ROI (under one par)cular scenario)

60 Thank you!