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Understanding social-media ROI in the nonprofit space

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Social Media

Saying nonprofits don’t have a ton in common with the business world might be the understatement of the year. They have different goals, operate under different restrictions and often have very different outlooks.

So you’d expect them to approach social media from radically different angles. But as Olivier Blanchard explained at Wednesday’s Buzz 2010 event, which SmartBrief helped organize, the two kinds of organizations certainly have their differences, yet the ways they approach social media have more in common with each other than you might think.

Both kinds of organizations can use social-media tools to improve their human resources and public relations operations, he noted in his presentation:

  • Social-media tools can lead to better hires and can help organizations make sure their workers represent the brand well online.
  • Social media is a vital reputation-management tool, especially during a crisis.
  • Social media helps organizations explain to the public why their product, service or mission is important.

One difference between the two kinds of organizations is whether they view the people they’re trying to reach as customers or  members, he added:

  • Businesses want to establish a brand that customers trust. Nonprofits still need members to have trust in the organization, but they also want to build member involvement in whatever cause the organization has as its nonmonetary goal.
  • Customer service takes on an extra dimension, as well. While nonprofits want the same kinds of support and feedback that business customers expect, they also need to feel a deeper connection, with more kinds of engagement.

The biggest difference between businesses and nonprofits is ultimately their goals. Both kinds of organizations need to worry about money — but for most businesses, profits are an end point, whereas the money a nonprofit brings in has to support some other goal. But Blanchard argues that these different goals shouldn’t change the way an organization thinks about return on investment.

Businesses must make sure their social-media efforts raise or save more money than they spend. Nonprofits need to do this, too, he notes, even though money is secondary to those organizations’ primary goal. Nonprofits need to resist the temptation to try to assign arbitrary monetary figures to actions, such as getting a member to write to their congressional representative.

Instead, nonprofits need to calculate the ROI of their social-media presence and use the money they’re bringing in or saving to accomplish those goals. Blanchard recommends nonprofits get around this by starting with their ultimate goal and planning backwards.  Start by thinking of your nonfinancial objective, then ask how much money you’ll need to support that objective, and then design your social-media efforts in support of those financial goals. Identify exactly how your social-media presence will lead you to those goals, he said, and then set clear metrics for success at every step along the way.

Image credit: raalves, via iStockphoto

If you missed the Buzz2010 series of events on social media for associations, recordings have been made of all three events.  Both the June 16 session on open leadership and July 20 session on social media risk are available right now.  The  August 18 session on social-media ROI will be available on Sept. 1.  Click here for more details.