RAY SUAREZ: As the year nears its end, Americans are expected to have given roughly $300 billion in charitable donations, the largest source of that money, individuals. Last year, they donated more than $220 billion.
Now social media is increasingly becoming a new tool for nonprofits and organizations to connect with potential donors. There was a 5 percent rise in 2009. Facebook was most frequently used.
For a closer look at the role of social media in philanthropy and its limitations, we turn to Allison Fine. She's co-author of "The Networked Nonprofit." She also hosts "Social Good," a podcast for "The Chronicle of Philanthropy."
And, Allison, when we look at this sector, how does social media help donors find causes and help causes find donors?
ALLISON FINE, co-author, "The Networked Nonprofit": Well, that's a great question, Ray. Thank you for having me on tonight.
So, social media democratizes the entire field of giving and receiving donations. It enables donors to search for causes, to find out what people are saying about those causes, why people are giving to it, and to hear the stories of people that those causes are helping.
And on the flip side, social media is pulling insiders out, and allowing outsiders in to organizations, so that they can create a more meaningful relationship between themselves and their cause.
RAY SUAREZ: Do we have good numbers yet? Do we know if an overall, a larger chunk of all giving is being done through social media?
ALLISON FINE: So, the percentage of giving online and through social media is rising very, very quickly. But still -- to have an overall perspective of it, Ray, it's still less than 10 percent of all giving.
RAY SUAREZ: Does this create another channel? Is it as simple as that, another channel for people who are already givers to accomplish that? Or are you really increasing the size of the pool, bringing new people into that world of charity through social media?
ALLISON FINE: So, part of what's going on is that this is a huge opportunity to engage younger donors.
We have a generation, Gen Y or Millennials, the 15-to-30-year-olds, who are the largest living generation, regardless of what the boomers think. There are over 70 million Millennials out there. And this is the way, Ray, as you know, that they hear about causes, that they learn about what's going on, and that they are going to give in the future.
So, it is a must-do for nonprofit organizations to learn how to build relationships with future donors online. As of yet, we're not quite sure of who exactly is giving online. But there's no question that this is the future of giving, and it's a different kind of giving.
This is not direct mail online. People who are online who are giving want to develop relationships with causes, with organizations. And those relationships are encouraging people to give more over time online than they do in traditional ways.
RAY SUAREZ: Well, I'm glad you mentioned direct mail, because one of the ways we have been advised to keep an eye on what charities do with our money is take a look at the figure that they spend on outreach and administration.
ALLISON FINE: Yes.
RAY SUAREZ: Does the use of social media make it cheaper to identify new prospects for giving, and does actually getting the money from place to place cost less when you use online media?
ALLISON FINE: Well, so, one of the great upsides of social media is the issue of scale, that organizations used to have to spend an enormous amount of time and particularly money to reach large numbers of people, either through direct mail or through broadcast media.
But social media is relatively inexpensive, almost free in a lot of cases, and allows an organization to reach an exponentially larger number of people. Now the question is, what do you do when you reach those people?
If you -- if organizations continue to talk at them, treat them like ATM machines, they will just go away. But I read a post by a great blogger today, Debra Askanase, on the North American Bear Center, which is doing a great job of engaging nearly 120,000 friends on Facebook, to follow Lily the bear and her cubs, and at the same time turning those friends into funders. They have raised nearly $200,000 doing it that way this year.
So that's the kind of relationship that people are going to expect to have with their causes, with their organizations, using social media, that we never could have in the direct mail era.
RAY SUAREZ: Well, is it easy to oversell all of this?
I think, of, for instance, in the past year the example of Haiti, where many people were shocked by what they saw in the aftermath of the earthquake, simply used their cell phones to make donations. But it was so easy, so frictionless, so effortless, that I'm wondering about the depth of commitment.
ALLISON FINE: Right.
RAY SUAREZ: Can you go back to those people for anything else or bring them into a deeper relationship?
ALLISON FINE: Well, I think we need to separate out -- you know, a huge episode, a natural disaster like Haiti, like the tsunami before it, is a unique activity.
The American Red Cross raised over $30 million through text giving, which they were prepared -- fully prepared for an episode like that. That's very, very different than the ongoing relationship that you're going to have with, say, a local Humane Society, or a food bank or a shelter.
Those relationships are personal and will happen over time. And it is incumbent on nonprofit organizations to invest in those relationships that will then turn those online friend into funders.
RAY SUAREZ: Allison Fine, the host of "Social Good," thanks for joining us.
ALLISON FINE: My pleasure, Ray. Happy new year.
RAY SUAREZ: Happy new year.