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Associations Now

Tweeting for Dollars

ASSOCIATIONS NOW, March 2012 Intelligence

By: Andrew S. Lang, FASAE

Summary: An elusive example of an association that's making money through social media.

In my search for new revenue sources, one of my most elusive targets has been an association that is actually creating net income through social media. Most of us know or have heard of associations that use tools like Facebook or Twitter to promote conferences or other products and services, thereby increasing their sales. But reports of associations creating net income directly from these tools have largely proven illusory.

Finally, I am pleased to report that I have found just such an association—and it turns out it has been succeeding at it for three years already. So what kind of association is so advanced in its use of cutting-edge technology? In retrospect, it seems obvious that it's a technology organization: the Nonprofit Technology Network.

NTEN is a 501(c)(3) organization that launched in 2001 with one staff person and no members. Today it has 10,000 members, a staff of 11, and a budget of $2.1 million. According to its mission statement, "NTEN aspires to a world where all nonprofit organizations use technology skillfully and confidently to meet community needs and fulfill their missions."

According to Holly Ross, executive director of NTEN, the association's members are nonprofit technology professionals who share the common goal of helping nonprofits use all aspects of technology more effectively. One of the ways NTEN achieves its mission is by building communities of peers to support each other. Most of the education provided to members comes from other members.

To further members' knowledge, the organization has taken on a responsibility to work on the cutting edge of available technology, which is how it started using social media tools to try to make money. As NTEN began planning one of its major 2009 conferences, Ross says, it used social media tools to make it easy for members and nonmembers alike to vote for the sessions they wanted to see.

As people voted for various sessions, they would reach out to their personal networks to say, "I just voted for this session, and I think you should vote for it too." As a result, NTEN achieved a far more diverse and enthusiastic audience than it previously had.

"A light bulb went off in my head," Ross says. "People really loved the conference, and I realized that NTEN might tap into this enthusiasm to be able to raise money inexpensively for scholarships by also using social media tools."

First, NTEN set the strategy for the campaign. "We decided that for every donation made, the donor would get one vote for what kind of video NTEN would produce and debut at the conference," Ross says.

The next step was to select an online fundraising tool that would serve as the backbone for each campaign. All donations are made in the tool, which allows donors to share their participation in any social networking platform, thereby tapping into their personal networks.

Next, NTEN sent a tweet to all of its followers that included a web address for making contributions, asking them to retweet the message. Facebook posts, LinkedIn messages, and emails were part of the mix as well.

The resulting campaigns have raised an average of approximately $10,000 each of the last three years. Because NTEN has a corporate sponsor that provides matching funds, the total raised comes to $20,000 a year. While this is only a small percentage of the organization's overall budget, it is nevertheless a useful sum for the purpose intended.

While it costs little or nothing to set up a social fundraising campaign, a key consideration beyond functionality and the attractiveness of the site is the transaction costs, Ross says. These can vary widely and will represent the most significant out-of-pocket expense.

Ross says another concern was that staff time required to manage the campaign can be significant. For instance, NTEN launched a fourth fundraising campaign in which a group of members agreed to raise $500 each. Keeping those members focused on achieving their campaign targets required considerable effort by staff.

One of the axioms of raising additional revenue is that it most frequently comes from "singles and doubles" and not home runs. NTEN has provided an excellent example of another way associations can score.

Andrew S. Lang, CPA, FASAE, is with LangCPA Consulting LLC in Potomac, Maryland. Email: alang@langcpa.com

For more information about the technology behind NTEN's fundraising drive, visit the LangCPA Consulting blog.

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