Causes put out a press release yesterday that I’m putting out in its entirety. It’s nearly 2 AM out here in Brooklyn. More analysis will follow tomorrow — I promise:

BERKELEY, Calif. — May 29, 2008 — One year after launching an application on the Facebook and, subsequently, MySpace platforms, Causes celebrates the milestone of registering 12 million consumers who are now supporting more than 80,000 non-profit causes worldwide. The Causes audience, to date, has raised $2.5 million in charitable donations, benefiting 19,445 501( c ) (3) charitable organizations.
Causes on Facebook, and subsequently MySpace, debuted 12 months ago with the opening of the Facebook development platform. Since its inception, Causes has created a new paradigm for online activism, spurring millions of Internet users to pledge online support for causes, make charitable donations, and to take action in the real world.
“We are thrilled that Causes is starting to gain hold and reach a critical mass of socially and politically aware people around the world,” said Sean Parker, CEO and co-founder of Causes. “Causes on Facebook and MySpace has become a gateway for people seeking to take action in support of causes and issues they care about, as well as raise funds to sustain positive change. We could not be more pleased with our first year results.”
One-Year Momentum and Results
Currently, Causes directs online activism into ten categories of support. Of the tens of thousands of non-profit causes supported through the application, the community engagement statistics reflect the following rank by cause category:
Charity Category Number of Causes
1. Human Services 16,203
2. Health 13,156
3. Public Advocacy 9,339
4. International 9,274
5. Arts & Culture 6,559
6. Animals 5,838
7. Political Campaigns 5,652
8. Education 5,589
9. Environment 5,286
10. Religion 3,834

“Causes has helped create a new generation of UNICEF supporters,” said Caryl Stern, President and CEO , U.S. Fund for UNICEF. “Through virtual gifts and other social currency models, Causes is helping to activate first-time donors and volunteers to support UNICEF’s mission to do whatever it takes to save children’s lives.”

In another first year milestone, Causes partnered with the Case Foundation and Network for Good to launch the Causes Giving Challenge. The Causes Giving Challenge raised more than $570,000 for participating nonprofit organizations, apart from $250,000 matched by the Case Foundation. The peak of the campaign saw nearly 8,000 donors contributing to nonprofits in a single 24-hour period.

“This first year of growth on Causes has demonstrated the power of citizen philanthropy,” said Joe Green, co-founder of Causes. “Causes is on track to help restore social capital to the process of giving, and to provide young people or others who are not super-wealthy with a way to engage, contribute and become more aware.”

Project Agape takes a different tack with its Causes application, which raises awareness and money for nonprofits and other causes. The service takes a 4% transaction fee on contributions raised through the application. Since launching nearly a year ago, the application has generated more than $2 million in donations. Causes also sells ads to companies that want to be associated with these nonprofit endeavors. “A lot of [our revenues] come from the huge expanding world of cause-based marketing,” says Project Agape co-founder Joe Green. “Companies care a lot about how they are viewed in terms of causes.”

Hat tip to the Social ROI blog

That’s only $80,000 revenue from $2 million in donations. Clearly, Project Agape is still going through its initial investment. The size of that investment is unknown.

Update 4/25/2008:

digitalmediawire reports:

Project Agape, which is developing “a platform for large-scale political and social activism on the Internet,” has raised $5 million in its second round of venture capital financing, PEHub.com reported, citing a regulatory filing.

Investors included Founders Fund, which also backed the company’s $2.35 million first round; Project Agape co-founder Sean Parker is a partner at Founders Fund.

User interest in Causes has dropped to around 80,000 active users per day from its high during November of last year of 400,000 users per day.

I sent e-mails to Joe Green and Susan Gordon at Project Agape asking for their December numbers. I haven’t received any word from them and it’s been more than a week. I can only conclude I’ve lost the bet. Bill Templeton — wherever you are — please e-mail me at abenamer@nonprofittechblog.org for the official eating of crow etc. I also have a $50 donation to make to the donation of your choice as well as a Google glow-in-the-dark sippy cup to give away.

What’s fascinating is that Causes has failed to push users towards donations and only towards affiliations. Despite an installed base of over ten million users, Causes seems unable to generate the volume that would be commensurate with such a vast installed base. You can see the interest in Causes waning in the chart by Adonomics below.

It’s evident that there was a drop in activity that coincided roughly with the giving season between Thanksgiving and New Year’s Eve. Why? The question here is whether it’s a local problem that’s unique to Causes or something larger that can be blamed on trends that are part of Facebook or the demographic on Facebook?It’s been suggested Causes has numerous problems in its business logic that seems to stem from a lack of understanding of the giving process. For one thing, it’s very difficult for nonprofits who are actually interested in engaging Causes users to engage that group. Causes doesn’t have a specific backend interface for would-be nonprofit administrators to deal with a Causes members list. Also, the inability to mesh Causes data with a CRM such as Blackbaud’s NetCommunity, Kintera Sphere, Convio or even Salesforce.com doesn’t seem to bode well for Causes if it wishes to become an integral player for nonprofits. There are also silly things such as having users being bumped from the Hall of Fame for a particular cause. Generally speaking, it’s not a good idea to tell donors that they’ve LOST recognition from a nonprofit. It certainly suggests that the Project Agape team are not well-versed in traditional philanthropy.Or is it a general problem related to the drop in traffic that Facebook has when students go on winter break and are studying for exams, etc. Or is it another structural problem? That millennials simply don’t have the money to give away. Only time will tell. One thing is for sure: with over ten million users, Causes is going to still be a factor for a long time but by how much we may not know. For now, Project Agape has network effects working for them quite well but they seem unable to convert their users into actual donors.It’s a bit of a puzzle to me why they haven’t hired people more well-versed in traditional giving to work with them and change their existing business logic. They remain an untapped resource and it’s quite frustrating to watch and even more frustrating that Project Agape has seemingly clammed up.

I definitely would like your comments on this issue? What are your theories on why Causes failed to raise not just a quarter per user but worse, EIGHT cents per user from their installed base?

UPDATE (1/29/2008): At the time of close on 12/31/2007, the prediction market for this bet was running at a 40.8% probability that Causes would not make the $825k mark. Score one for prediction markets!

So here we go again! Another major step in the development of a new social networking platform is set to release tomorrow. Google and a panoply of other social networks have decided to one-up Facebook and create a super-platform whereby developers can create one application that can be served over Orkut (Google’s social network), LinkedIn, Hi5, Ning, Plaxo, and Friendster. Oddly enough, salesforce.com is in this mix too but it’s hard to understand how they can be a part of this unless your app can be added through AppExchange.

However it may be, your average nonprofit will not be able to take advantage of this development in a meaningful way. There’s no doubt that a few will be able to do so but that’s because they’ve already adopted the infrastructure and skill sets that would allow for rapid adoption for new technology. As I outlined in a couple of earlier posts, if you’re not even state-of-2005 in your application development practices, don’t bother with OpenSocial. Basically, your IT architecture needs to handle hundreds and then eventually thousands of requests per minute and you need to do some seriously rapid application development. If you’re not using EC2 or a web framework like Django or Ruby on Rails or even an agile methodology, forget about it. You’re toast. However, I suspect only ventures that are VC-backed will be quick enough to do this.

It’s an interesting race because one could say that Project Agape’s Causes has had an unfair competitive advantage due to Joe Green’s connections to Facebook’s founder, Mark Zuckerberg. As a result, Causes was the ONLY charity app on Facebook for several weeks and had a huge head start during a period when you could invite an unlimited number of your friends to the app. To this date, competing charity apps are having a tough time breaking 20,000 users while Causes is probably going to have its seven millionth user before mid-November. If Causes is the 800 lb. gorilla of Facebook charity apps, it has little or no recognition outside of it. It’s about as pure a play on Facebook as you can get it as Project Agape doesn’t even have an extensive Web presence.

Google OpenSocial hits a reset button for all the players involved – we can now see whether or not the new microphilanthropies (including the one I’m a part of — socialmarkets.org) will be able to change course and adopt this new API. Ironically, this makes the Facebook portion of Convio’s new open platform even more inadequate than it already is for dealing with this new open world of social networking. Facebook apps are not compatible with Google OpenSocial because Facebook’s markup language is only useful for Facebook. This is ultimately Google’s flanking maneuver against Facebook and probably something that may not have been released had Google won the bid to own a portion of Facebook. The incompatibility of the two APIs will certainly cause developers to look at the prospective user audiences involved. After all, at least for nonprofit technologists, LinkedIn has always represented a more “premium” audience for charity asks than Facebook ever did. The addition of the other social networks is nice and can round out your worldwide reach. For instance, Orkut is strong in India and Friendster in East and SE Asia. So imagine being a charity app developer, you can get fifty million young Anglophones (Facebook) or 100 million users worldwide (Google OpenSocial), which would you pick?

And yes, this means the Gold Rush begins TOMORROW. The chances for your app to explode in a viral fashion diminish quickly by every day you’re not out there. Sigh. It’s like the 1990s all over again.

Every so often I read in the nptech blogosphere articles that I consider to be problematic. I just read one today that stated that the Convio Facebook App is better than the Causes App on Facebook. Apparently, the major claim to fame is that people within a Convio Facebook App can now directly sign-in to an organization’s CRM. Another added bonus is that content from a Convio-powered Web site can be integrated with a Facebook App. Unfortunately, you can only run one Facebook app at a time using the Convio tool.

There are multiple problems associated with the statement and here’s the list:

1. Convio doesn’t have an industry-standard SLA. This may not be such a huge problem for those nonprofits that are combining an existing web site with Convio content but this is a huge problem when it comes to handling a Facebook App. Previous blog entries on this site detailing the infrastructure for Causes show that most nonprofits (even the larger ones) will not have a big enough IT staff to handle their own Facebook App if it takes off. Do we know whether or not Convio could handle the server load if multiple Convio Facebook applications take off?

2. Where’s the fun stuff? Are you seriously giving Facebook users the wonderful opportunity to sign into your registration system? What happens after that? There are no set-asides for other interactive widgets such as forums, etc. Oh wait, most people don’t have that on their regular Web site. So the problem here is that you will end up with an app that’s basically the equivalent of Web 1.0 brochureware.

3. The best Facebook Apps increase interactivity between and among users themselves. Most nonprofits are not set up for this kind of interactive strategy. They’re still in broadcast-only mode. This isn’t just a tactical issue but a strategic one. I can think of all sorts of great Facebook activities that would be fun to do for supporters of a nonprofit but I can picture a lot of cringing too on the part of nonprofit management staff. Are you strategically ready to live with the idea that your users will talk about you? In light of the controversy surrounding even Web site stat transparency around here, I seriously doubt a lot of nonprofits will be comfortable with this strategy. If you’re the kind of person that likes to filter information about your organization to the public, this strategy is dead in the water for you.
4. Convio’s API is ultimately your limiting factor. The lack of multiple user retrieval and the lack of pass-through SQL will pretty much condemn your app to interacting with only one user at a time. Even if you did an end-around on the Convio SLA issue by putting your App on Amazon’s EC2 and outsourcing your programmers, you’ll still have to run one data call for every user. Imagine doing a hall of fame with your App or some other function like the total amount of dollars raised! That’s pretty much a death knell for an application that needs to scale over thousands of users.

Wait for Convio to get its act together. I understand that Convio will be making changes to its API soon in response to my earlier post. It may be that they’ll implement some of my recommendations and maybe even create a rider that discusses a special SLA for a Convio Facebook App.

Well, it looks like we have two takers, myself and Bill Templeton. We’ve been beating each other up on a comments stream about whether or not Project Agape is a runaway success and now is the time to place the bet we discussed in the comments.

My Google glow-in-the dark cup (a virgin cup at that in the sense that the glow-in-the-dark components have to be snapped in order for it to glow)

versus

Bill Templeton’s eBay RASCI the Decision Making Mongoose

And just to make this more charity-oriented, Bill and I will donate $50 to the charity of the winner’s choice. Project Agape, the maker of the Facebook Causes App has agreed to submit the numbers for December 2007 to make this bet happen.

I’ve held back on this post because I was looking for a decent platform where all the other readers of this blog could participate in the bet. I found it at inklingmarkets.com. Inklingmarkets is a decision market where you can buy stock in a market that answers a question. It won’t cost you anything but your time. No money is exchanged. Inklingmarkets will give you $5,000 in virtual currency to play with. And you can use that virtual currency to participate in the new market I just created which is supposed to harness the wisdom of this blog’s readers in answering the question: Will the Facebook Causes app raise more than $825,000 in December 2007?

Basically, if you short the stock, you’re betting against that outcome happening but if you go long on it, you’re betting on it to happen. Unfortunately, as the market maker, I’m not allowed to “invest” in the outcome but you can. Go over to inklingmarkets and check it out.

If you’re interested in placing the following charts on your blog or web site, inklingmarkets has the appropriate instructions for installing the widgets.

I really hope that you all participate in this market. It’s a great way to get a whole bunch of people involved in discussing Facebook Causes, the future of nonprofit marketing and being involved in probably your very first decision market!

Jon Stahl points out that Facebook is no longer measuring apps by raw number of users but by their engagement. There’s more info at the Facebook blog. So how does this play out for charity apps on Facebook?

Well as of 10:38 PM EST on 8/29/2007, here are the stats for charity Facebook Apps:

App Name	% of active users	Active users per day
Firstgiving		14%	34
Causes			6%	203,182
Change.org		4%	288
Razoo Speed Granting	3%	207
Chipin			1%	39

Clearly, there’s room for better user engagement within most of these charity apps. Causes is still the 800 lb. Gorilla of the Facebook charity app world. What’s even more interesting is that Causes is also the biggest political Facebook app by far. And yes, that statistic lumps in political Causes with nonprofit Causes. Let’s say only 10% of those Causes are political. It’s still leading the pack. That’s how huge the Causes user base is. Those of you in the political advocacy world had better start figuring out Causes quick. I hear there’s a very important election in 2008.

I’m very intrigued now by the activity of Firstgiving users. Does anyone have a hypothesis as to why they lead the pack? I certainly don’t. Could it just be a statistical outlier or does Firstgiving have some secret user interactivity sauce?

Oh yeah, if anyone can think of more charity Facebook apps to add to the list, please tell me.

I had a quick phone interview with Joe Green and Keith Rarick from the Project Agape team. Joe Green is the head of Project Agape and Keith Rarick’s “title” is Lead Engineer. I first wanted to ask the questions that were submitted on the blog. However, I think you can find many of the business-oriented questions that readers submitted answered in a more direct format over at Micah Sifry’s interview with Joe Green over at the Personal Democracy Forum.

The biggest and most important question for Michelle Murrain was the business model for Project Agape. I have to say this is the most salient question for many nonprofits who want to know where their money is coming from and deciding on whether or not they should play in the Project Agape space.

Joe had two different answers. One of them is simply practical: that as a nonprofit they would never have been able to raise the hundreds of thousands of dollars needed to buy the servers they need to run Project Agape. His second answer was that the social mission goes far and beyond the costs that have been incurred by Project Agape so far. Apparently, Project Agape charges 4.5% on every donation which doesn’t even cover his costs. Actually, Joe had this to say during his interview with Micah Sifry:

JG: At this point we aren’t even coming close to covering our costs. Of the 4.5% that gets taken out, 3% goes to JustGive, and then of the 1.5% we receive we have to pay most of that to JustGive for the processing of the checks to the nonprofits.

If the cause is political in nature, Joe said the money gets sent to ABCPac if it’s a right-leaning or Republican cause or ActBlue if it’s a left-leaning or Democratic cause.

I had to press Joe on how Project Agape planned to stick around in the nonprofit sector as many nonprofit managers will be wanting to know how serious Project Agape was before they jumped in with both feet marketing their nonprofit with the Causes application. Joe eventually answered that they’ll probably do some advertising and perhaps partner with corporations regarding causes they care about. Even Joe admits that they are not currently focused on revenue opportunities right now. They seem to be interested in first growing the application and then worrying about revenue later. It’s much like a 1990s model of Internet development but they’ve only been around for a few months so let’s hope Joe figures this out by next year.

As a brief aside, Joe and Keith were proud to announce that their growth rate is now exponential meaning that it is rising as more users join Causes. I checked appaholic briefly and they’re right. They’ve spiked the last few days and are up to 39,000 new users per day or basically the entire Second Life audience twice over per day. In fact, they now have more users on Causes than the number of logged-in users to Second Life in the last sixty days. Obviously, Second Life and Causes are not competitors and Joe took pain to make sure that observation was noted. This is more of my own particular pet peeve about the love that Second Life gets in disproportion to its actual user base.

So I then asked the OTHER question that people are dying to know about Causes. How much money has it raised since its inception? Causes has raised… get ready for it… $300,000. Not bad for an application that didn’t exist a few months ago. They have yet to spend money on optimizing donations. Joe says they’ve got plenty of ideas but haven’t yet gotten around to defining what the idea giving experience is going to be.

I then asked Joe about how nonprofits should approach the Causes app and how they should market themselves there. He had an interesting argument that Causes is an experiment that is optimal when the organization is as concrete and transparent as possible. He pointed to the largest Cause which is called “Support Breast Cancer Research”. As of this writing, it has 868,940 members and raised $22,890. Apparently, the 501c3 that will be benefiting from the funds raised for this cause will be to a single hospital in the Boston area. Eric Ding, who started the cause, made a concrete pitch centered on the need for research to help stop breast cancer. As a result, the donors may not really care much about the Brigham & Womens Hospital Inc which is the cause receiving that $22,890. Instead, the donors care about the cause that they are donating to.

Of course, this is contrary to the way that many fundraisers operate. They worry about their nonprofit’s brand and worry about donor loyalty. In fact, Project Agape does NOT release donor lists to the nonprofits that are receiving money from Causes. However, they can find out who the donors are by looking at their Facebook profiles since each donor and fundraiser is listed. It’s a whole new ballgame for the nonprofit fundraisers. Will nonprofit development folks “get it” when people like Joe Green tell them that they can’t get donor lists and that brand loyalty is not particularly important? I hope so because that’s how Web 2.0 is siding on privacy issues for donors.

So for all you techies out there… here are, to me, the most fascinating details about Project Agape. Keith gave me the following details…

Previously, Project Agape was running about 14 servers to service the one million users they had back then. Believe it or not, they have not increased the number of boxes. In fact, they’ve actually reduced the number of application servers from 14 to 11 and made three of them utility boxes. The application is a lot more efficient now and their biggest win was when they rewrote the SQL queries they originally used to access the database. In fact, Keith is now clearly saying that the biggest bottleneck was never in the Rails application that they built but in the database bottleneck that resulted from SQL queries that were inefficient. Apparently, Project Agape was consulting with other Rails-based developers such as iLike and soon, Twitter, and sharing code and techniques that would allow them to scale more efficiently. In fact, Keith is hoping that they’ll be able to release this as an open-source toolset someday. (Release the code! I’d love to see it.)

One thing that I always thought was interesting about Project Agape was its reliance on FreeBSD. FreeBSD is no longer the OS of choice at Project Agape and they have moved over to Linux “purely for reasons of support and availability”, says Keith. They’re having a tough time hiring people with FreeBSD experience hence Linux it is. Keith was a little stingy in his praise of Linux, calling it the second-best OS out there but hey, it’s obviously good enough to run their app.

In fact, they’re going to start componentizing their codebase and the way it gets distributed over their little server farm so that it would be easier for them to scale going forward in the future. One interesting tidbit that Keith shared with me was that their current mysql server configuration should put them in good position to scale upwards to around twenty million users (or two a half times the entire community for Second Life hehe).

However, the Causes team is not exactly sitting on their laurels. They recently added a “Media Board” to a Cause. This allows users to post media related to that cause up to the rest of the users who have joined that cause. There’s finally a serious incentive for nonprofits to post publicly available audio-visual media somewhere on the Web in the hopes that Facebook users can pick it up and post it to a Cause. Obviously, I’m enamored of what the Causes app is doing. I even admitted that I was a Project Agape fanboy to Joe and Keith, thus obliterating any sense of journalistic neutrality that I ever had.

Be that as it may, I strongly urge nonprofits to seriously consider trying out Causes especially if that nonprofit is not as well established. Who knows? One key proponent of your nonprofit could be that informal marketing genius who could vault you to the top of the heap in Causes. Utilize your offline social networks and get them to support you on Facebook. Do it now before everybody else figures out a good approach thus raising a barrier to your nonprofit’s entry.

I’ve got a possible interview with Joe Green and his developers next week. They passed the two million user mark some time ago. Appaholic is showing the following chart for Causes:

They have formidable positioning as THE nonprofit to deal with on Facebook. I’m very curious how they’re handling the user load now as they are adding roughly 239,000 users per WEEK despite the throttling on adding new users imposed by Facebook about a month after the F8 launch.

Please feel free to post your questions in the comments thread or e-mail them to me at abenamer@nonprofittechblog.org.

There’s been an awful lot of conjecture mixed with hope over MacArthur Foundation’s new space in Second Life. I’m having a REALLY tough time endorsing nonprofit ventures in Second Life simply because of one metric which is often overlooked: marginal cost of participation in a virtual world doesn’t decrease quickly enough. One of the fundamental things we’ve learned about the largest Internet properties is that the cost of participation is surprisingly low after the initial set-up of a presence. In Wikipedia, Myspace, FaceBook, etc. there’s a quick learning curve as you set up your initial presence but you’re not going to have to go in there every day trying to interact with people. It’s an asynchronous communication tool. Basically, you can have a web site or your profile up there running 24 hours a day whether or not you’re awake, on vacation or just hanging out with your friends. This is the early promise of the Web as it was fulfilled so long ago and this is why an e-mail address was the early killer app. It was about the breaking of time and space boundaries, thus reducing the marginal costs of keeping up on your hobbies, keeping up with your friends and relatives and learning about the world around you.

However, Second Life and other virtual worlds, want to re-introduce those old barriers of time and space by subjecting you to a 3D experience. Sure, you can teleport and use SLURLs, but the server limitations on Second Life reimpose a kind of time/space barrier (more like a calculation barrier) as to how many people can congregate in one space. I keep asking myself, why would I want that? Why reimpose what us sci-fi nerds call meatspace back into cyberspace? Sure, as a learning tool and as a simulation, it’s incredibly useful, but simulations and learning tools demand more attention from a user base that is still primarily preoccupied with you guessed it, Myspace and Facebook. Worse yet, in order to really make your presence interactive, you have to be at the keyboard meeting and greeting your visitors. That puts you right back into the pre-Internet labor proposition for a real storefront. Why would notoriously non-entrepreneurial nonprofits want to do this?

And this will ALWAYS be the case for every virtual world until a virtual world becomes successful at incorporating current Web 2.0 properties. Virtual worlds are attention-grabbers but for all the wrong reasons, they take up your entire user interface, they grab keyboard interrupts, and they require client-side downloads. There needs to be a way to merge a social networking experience into Second Life and that hasn’t been done yet. Until then, Second Life is a very intriguing but disappointing sideshow.

Which leads me to the fundamental and perhaps most difficult problems for nonprofits in Second Life: marketing and fundraising. Marketing is primarily a numbers game, the harnessing of statistical data towards the achievement of one goal: making money. It’s strictly an issue of finding where the most people are who like your message, coming up with a campaign, and then executing that campaign well. In that manner, I would be much more likely to endorse Facebook’s Causes application over Second Life simply on the numbers alone. Second Life’s 20,000 concurrent users is impressive but is dwarfed in comparison by existing social networks. Project Agape’s Causes has one million users on it and they all opted-in. And they raised $100k without even doing a virtual walk-a-thon. My guess is that Causes will ramp up much faster than Second Life will and within the first year of operation will easily outstrip same year donations for nonprofits in Second Life.

Just for fun — here’s a video of Second Life in the real world…