In a recent Businessweek story on widgets, Joe Green from Project Agape discloses a revenue figure for Causes:
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.
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Allan
What ever happened to that bet about Causes and growth? I am not surprised by the drop off, it’s just not that interesting.
Michael
Gee, Michael, I totally lost that bet. The gory details are here.
Still though $2 million is nothing to sneeze at for a first year that isn’t quite finished yet. I think the conundrum they’re facing is how do you take Causes and get actual conversions out of it? I would think that they would be doing something to solve that but I haven’t seen much progress in the last few months besides new reporting tools.
$2m seems like not very much to me. But I’m not sure what to benchmark that against. I think the real question is: has any one organization raised a meaningful amount of money (in comparison to its total online revenue) from Causes? My guess is no.
I think Causes is dead, and that Facebook-fundraising is too.
@Jon Stahl:Whoa! I’m definitely not ready to raise the surrender flag on this one yet. Here are some quick benchmarks:
Kiva’s one year of financial figures showed it raised $1 million in its first year of operation.
It took DonorsChoose 6 years to raise $2 million in one year.
Let’s have a little perspective here! Give Causes some time. I think we’re experiencing a bit of bias because of the extremely large size of the Causes user base. It does seem weird that they’re collecting such a low amount per user but they just haven’t had enough time or haven’t admitted they need real nonprofit fundraisers on their team (which is more likely).
I think Jon makes a really good point. Are these websites really effective in helping nonprofits raise meaningful dollars? It would be interesting to see a metric about the percentage of total budget that these nonprofits are able to raise via Causes, Facebook, DonorChoose, Global Giving etc. And then estimate how much time it takes to set up and maintain a page.
@Jed Mitchell: I’ve seen those social media ROI spreadsheets that Frogloop set up. The numbers, frankly, are pretty horrible. It’s a tremendous amount of labor for very little return. I think it’s still too early to expect that nonprofits will raise 100% of their budgets through sites like Causes or DonorChoose. Heck I’m not even sure that 10% of a budget could be raised through online donation aggregators.
There’s an interesting figure over at Kiva where they limit the amount of revenue that a participating microfinance institution (MFI) can raise on Kiva to 30% of their total revenues. It’s intended to not entirely distort the mission of the participating MFI. So…
I think these sites are intended to be only one of many new channels of revenue for nonprofits but not the only revenue. In much the same way, nonprofits have relied on direct mail and grant writing, online donation aggregators are meant to be a part of a strategy that nonprofits can build their fundraising activities around.
Call online fundraising the third channel if you will behind direct mail and grant writing. What WOULD be interesting to know is if direct donations via a nonprofit’s website or e-mail list activity is more or less than supplementary streams from online donation aggregators. That would be a real mark of success for online donation aggregators if they could exceed a nonprofit’s activities at online fundraising. I don’t think this has happened at Causes but I bet it already has for a few of Kiva’s member institutions.
[...] Project Agape veröffentlicht Zahlen (englisch) Project Agape a.k.a Causes on Facebook hat seit Start im letzten Jahr ca. 2 Millionen Dollar Spenden vermittelt. Die Zahl der aktiven NutzerInnen ist zuletzt allerdings wieder auf etwa 80.000 gesunken (zu Hochzeiten waren es 400.000). [...]
Just a short note here to try to put a slightly finer point on these comparisons. There is such a strong tendency to lump Kiva, DonorsChoose, Causes, others, and GlobalGiving into the same bucket, but both our business models and our value propositions are different enough that it makes conversations like this a little convoluted. For instance, to try to assess “success” by how much of a non profit’s budget is raised via an aggregator may be relevant for Causes, since they are providing a platform/channel-specific tool for US 501c3’s only. But for DonorsChoose, the projects are not being posted by non-profits - they are being posted by teachers. So there are no non-profits to evaluate in the context of this question.
DonorsChoose is creating a new source of philanthropic funds to public schools in the US. In our case, over 30% of the projects (and many very successful ones from a fundraising standpoint) on GlobalGiving are run by organizations that don’t have 501c3 status - that is the unique value proposition we offer. So for them, GG might be a significant source of funds, vs another project of a US-based organization using GG as an alternative channel (as Allen describes). And then there is Kiva, of course, which isn’t attracting philanthropic/programmatic funds for its partner organizations…it is attracting loans for business entrepreneurs, which flow through partner organizations.
Sorry for the long post, or if this comes off schoolmarmish, but it seems important that these distinctions be better understood. In some cases they really do change the nature of the conversation.
Cheers
Donna @
GlobalGiving
PS Congrats to Project Agape - it took us a few years to get to $2M too.
Thanks, Donna, for the clarifications. You’re right in that revenue sources are different and that the various justifications for donations is different in all those organizations I mentioned. I think the similarity is that DonorsChoose, Kiva and GlobalGiving are all predominantly online entities that are making direct appeals to donors. You may not know it but there’s a tendency among nonprofits to argue against online participation (yes I know it’s crazy but there we are) and the figures that are cited are the revenue figures of something like Causes. I’ve also heard criticisms of the administrative backend for Causes when used by nonprofit staff. I feel it necessary to try to place those criticisms in perspective because I don’t believe the online donations space has fully matured yet. People are expecting online donation aggregators to be fully matured almost like Athena from Zeus’ forehead. And I think many of their perceptions are colored by some early flameouts in the space during the 1990s and early part of this decade. Be that as it may, I think the road is rocky but the trends are pretty unmistakable. We’re clearly seeing more and more uptake of online donations among donors and how that plays out is going to be incredibly important to the sector.
I think maybe it would help if you could confirm a percentage figure of revenue for some of the organizations that are using GlobalGiving from a fundraising standpoint. Are there organizations (501c3 or otherwise) that have raised a significant portion of their revenue (over 10%) using GG alone? If so, I think that’s great news and more proof that it’s important to follow this space closely.
As I’ve said before, I’m not ready to stick a fork in Project Agape and pronounce it done. It’s not a trivial thing to raise $2 million in the first year of operation.
Hi. My name is Saima Zaman and I am a Program Officer at GlobalGiving. I’ve been following this interesting discussion. I think we have organizations that really run a wide gamut in terms of funding from GG as a % of revenue.
For example, Ruchika Social Service Organization in India raised enough funds on GlobalGiving at the end of 2006 that this resulted in their organization being fully funded for 3 years! Center for Women’s Development and Research in India has raised 34% of their foreign revenues from GlobalGiving. Creating Hope International in Michigan has raised 4% of their revenue via GlobalGiving and IDEX over on the West Coast received about 8% of their revenues from GlobalGiving.
As you can see we comprise different percentages of revenue for various organizations and are working on being able to collect this on an ongoing basis to help us better fit the needs of our project leaders.
Hope this helps!
Best,
Saima
That’s an awesome comment Saima! Thanks for putting that up and welcome to the blog. Are these figures available on GlobalGiving itself? It certainly can serve as a spur for nonprofits to get online in a bigger way, right?
Also, you might want to post your own mybloglog account as it right now shows Donna Callejon’s picture.