the only roi is the roi of ice cream

Pleased as punch am I to have gotten a shout-out in the weekly round-up of things nptechish (here), so much so that I have been shaken out of my usual Saturday afternoon torpor enough to write up some of the notes I scribbled down when I got the subject of the week from the Net2ThinkTank, what is the return on investment of the social web for nonprofits?

As a one-time academic, I love a good essay question.  And as a habitual insomniac, I frequently find myself reading barely legible notes from my 4 am brainstorms — which usually center on things worky.

Sometimes these ideas are sharp and focused and spot on and I thank the good lord for making me an insomniac, and sometimes they wander about the room, muttering incoherently about flying, being chased, and/or public speaking whilst improperly (un)clothed.  As I am turning to a recent set of these scribbled notes for my response, let’s hope for the former, shall we?

 What is the return on investment of the social web for nonprofits?

How do you quantify the value of engagement in social networking?  How do you convince organizational leadership that precious and scarce time and money should be directed to something that many see as vague and marginal at best, and risk-laden and uncontrollable at worst?

First, you can tackle a problem that your existing technology has failed to properly address.

Identify a need – for more donors, more members, more volunteers, more participation from all three – and you can propose a solution using the social web.  Often, the only alternative on the table is that hoary old definition of insanity – trying the same thing over and over and expecting different results. 

Because most of our problems come down to a question of money, specifically a lack thereof, these problems can often be well-quantified.  Whether it’s our opening night houses aren’t selling out in the off-season by an average of X tickets or our annual end-of-year donor drive is falling short by X dollars or we have 500 volunteers on the roster and a paltry X of them are in sight when a mountain of envelopes need licking, you can usually stick a value on it and call it your baseline.

Identifying an existing problem and proposing a new approach to it can help remove the element of let’s try this technology because it sounds cool and brings the endeavor more comfortably into the realm of let’s try this technology because the existing technology isn’t working.

So now you have a quantifiable baseline (things aren’t working by X amount), a reasonably controlled experiment (let’s change this one thing about how we approach this problem), and you can set a time-frame for analyzing the results (let’s find out what, if anything, changed).

The nice thing about this is that the initial investment is seen as necessary — there is a problem (lack of attendance, funding, volunteer recruiting) that the whole organization can agree needs to be addressed.  It can be easier to advocate (and get widespread buy-in) for a new approach when the existing approach is acknowledged to be flawed, or at least inadequate for today’s needs.

You didn’t answer the question

But all of the above only addresses how one might go about determining the ROI of one’s own investment into social networks, and neatly evades the question of what the ROI actually is. And that’s what we all want, right? Some research or dataset we can whip out, with a nice multicolor graph with an x-axis and a y-axis properly labelled (preferably something like “time” or “money”) that shows a positive correlation between engagement in the social web and improvement in some metric that is central to the organization’s mission.

That, I don’t have.  I remain unsure whether that graph exists, or can exist, or perhaps even should.

What I do have is (merely anecdotal) evidence that the most tangible immediate return on investment when nonprofits get involved in the social web is internal, not external.  It’s often felt most strongly in terms of professional development, and even empowerment, on the part of the individual staff member and the organization as a whole.

If the organization makes it a rewardable thing for staff members to explore and propose applications for social media, then they will feel free to explore the various sites and their technology, research and observe what their peer groups are doing, and consider what might be the right moves for their own organization in this arena.  The staff member gets smarter, and the organization gets smarter.  Hopefully, the whole exercise begins a conversation about developing a strategy and a unified approach to the group’s engagement – or nonengagement.

The process can go a long way toward bringing nonprofit staff up to speed with what’s out there, demystifying it, overcoming the fear of the unknown, identifying some practical first (baby) steps, and developing a plan (always revisitable) for the future.

This “professional development” ROI shouldn’t be minimized, because it can have a viral effect on a community of nonprofits and nonprofit professionals.  Not only does one organization’s presence in a network often impel others to follow suit, especially if they see each other as competitors, but individual staff members might get excited about one thing — be that organizational blogging, internal wiki use, or the discovery that everybody you know is on LinkedIn — and start talking about it.

That person becomes an ambassador for the social web in some way, she plugs herself in, starts to network herself, evangelizes a few others, and the virus spreads – in the very micro-network that the worker exists in, that of colleagues, collaborators, and board members.  This in turn creates a more educated field of players that surrounds the early adapter.

So what is your answer time is up

I think that the first actual return on investment is the (low-cost, self-directed) professional development of nonprofit workers, and the result is a more technologically savvy, well-informed, self-empowered staff.  A secondary effect is a more well-informed micro-network that is better equipped to make decisions about technology use.  In short, the only way to learn if you should be using web 2.0 – if certain tools, deployed in certain ways, are right for your organization – is to use web 2.0.  At least a little.  These tools are not one-size fits-all, nor does one approach to and use of the tools fit every organization’s needs. You’ve got to figure it out for yourself.

In the absence of a scientific study determining the numerical value of social networking, I think that a manageable, low-risk way to “incent” getting started in social networking is to address a problem with a measurable outcome that is currently not being achieved by the methods being used.

Questioning the question

I do think that it is worth wondering if return on investment in the traditional, MBA sense of the term, is really the best way to valuate social networking — but that for now, at least, it is a question that many if not most nonprofit boards are demanding an answer to.  Especially in light of the fact that many of today’s nonprofit boards were assembled during that whole You-Must-Run-Your-Nonprofit-Like-a-Business push of the last decade.

So, valid or not as applied to web 2.0, it is a question that many practitioners simply have to answer satisfactorily to get buy-in from their board and their organization.  Most nonprofits spent the last 10 years becoming more businesslike, modelling themselves on traditional, often corporate, organizational heirarchies and decision-making practices.

Will a similar paradigm shift be required for buy-in to these new tools and ways of operating?  Will the nonprofit world have to cycle through another shift in how boards are developed and maintained?

Arts nonprofits are now pretty used to making sure they have representatives from certain professions on their boards, if possible: business leaders, marketing professionals, lawyers, insurance people, in addition to practicing artists and cultural leaders.  Is it time to make sure you have an IT – or better yet – an “nptech” person on your board?

2 Thoughts.

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