In September, we had a bet on this blog as to how much money the Causes app would raise in December. My guess was that Causes would raise $825,000 in that month. I based that on a projection of around 3.3 million users in December with an average $0.25 donation. That’s right — I thought Causes could surely raise a quarter per user in December. Joe Green verbally agreed to releasing the pertinent figures for December.
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 [email protected] 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!