Staying Ahead of Facebook Fundraising Changes

Meta recently made two big changes: 

• Stopped processing charitable donations and removed fundraising tools from the European Economic Area (EEA).
• Changed processing method and cost in the United States by transferring that function to PayPal Giving Fund but left fundraising tools intact.

There are three ways that Facebook helps nonprofits raise money, which have all been impacted by Meta’s changes in service to the EEA.

1. Challenges (Facebook groups built around an activity tied to fundraising).
2. Direct (a donate button).
3. Birthday (the original way rivers of cash hit nonprofits).

What Happened in Europe? 

While these are big changes, nonprofits still manage to successfully fundraise on Facebook in the EEA. There, donation activity is pushed to the nonprofits’ third-party platforms. Adrian O’Flynn is the founder of Get Your Stories Straight, a social media advertiser in Ireland, a country that lost Facebook fundraising tools. His company has successfully transitioned many EEA nonprofits to the new way of doing business.

O’Flynn said, “When Facebook announced they would stop processing donations in Ireland, I was not devastated. Eighteen months ago, we learned that many folks in our Facebook Groups wanted a fundraising page they could easily share outside of Facebook. Men, millennials, and Gen Z all prefer this. So, it wasn't a difficult transition.”

Why Did This Happen in Europe? 

The European market is fractured, with different rules in different countries. Most are designed to protect consumer privacy and increase competition. Complying with this complex set of requirements (some created by Brexit, some by GDPR and some by different country’s laws) created an expensive business environment.

Meta's decision to remove fundraising tools in select European countries is part of a broader trend of scaling back features to follow stringent and diverse European regulations on data privacy and digital services. The changes include earlier removals or modifications of features like personalized ad targeting and certain data-sharing practices due to GDPR.

Meta had previously discontinued or altered services in the EEA to align with European privacy laws, such as some ad targeting options and facial recognition technology. These actions do not target nonprofits but rather are driven by the need to avoid hefty fines and legal complications. In contrast, U.S. regulations currently allow more flexibility in these areas, reducing the likelihood of similar widespread feature removals. 

According to Forbes, the European Union (EU) crackdown on big tech via the Digital Markets Act has made it more difficult and less profitable for companies to do business in the EU. So, they are leaving for greener pastures, and the U.S. is currently one big patch of green.

Darren Winter of Duco Digital Training is a digital marketer in the U.K., a country that did not lose Facebook fundraising tools. 

“Brexit has allowed the U.K. to diverge from these regulations, enabling Meta to maintain its services there,” Winter said “However, it raises concerns that Meta might consider similar withdrawals in the U.S. and U.K. if faced with comparable regulatory or operational pressures in the future.”

What’s Happening in the US? 

In the U.S., Meta changed how payments are processed, but left all fundraising tools intact. Meta’s statement about the change in payment transactions in the U.S. says: “As of Oct. 31, 2023, we partner exclusively with PayPal Giving Fund for nonprofits in Australia, Canada, the United Kingdom, and the United States.”

This change was precipitated by California Regulation AB 488, which required new nonprofit processes, paperwork and signatures. As a result, hundreds of nonprofits were turned off Facebook giving tools. Meta spent significant resources to resolve the situation.

This trend may escalate due to a recent Supreme Court ruling, potentially causing the U.S. market to experience disruptions like those in the EEA.

The Chevron Ruling

Last month, the Supreme Court overturned a longstanding decision that allowed Federal regulators in agencies to interpret laws to make rules for the nation. The prior ruling resulted in the creation of common rules by which all states played. With the fall of Chevron, state courts may interpret regulations differently, creating a playing field more like that in Europe.

This trend impacts for-profit companies, nonprofits, tech companies and non-tech companies. While privacy and competition may increase, the efficiency and services offered may decline. Fundraising becomes harder; consumer prices go up. It’s a tradeoff.

Will Meta Ultimately Remove Facebook Fundraising Tools in the US?

Unlikely, although not impossible. The U.S. is still a friendlier environment than the EEA. The impact of the fall of Chevron may well be rectified legislatively (by Congress) in support of big business. Meta's core business model relies heavily on user engagement and ad revenue. Nonprofit activities on the platform significantly contribute to user engagement, driving interactions, shares and time spent on the platform. Decreasing nonprofit usage could reduce overall user engagement and directly affect Meta’s ad revenue. What’s good for U.S. nonprofits is good for Meta. 

In the U.S. alone, charitable donations through Facebook and Instagram raised over $8 billion for nonprofits. By any measure, these tools play a significant role. Reducing these features could negatively affect user sentiment and diminish the platform’s attractiveness to advertisers who value high engagement rates.

Nonprofits foster community trust and loyalty, both of which are crucial for Meta’s brand reputation. A decrease in nonprofit activities could undermine users' trust in Meta as a platform for social good, potentially leading to decreased user retention and loyalty, which are vital for sustaining ad revenue.

How to Protect Your Organization Against All Eventualities 

Here are some insights into how your nonprofit can prepare itself for anything.

Be Ready With a Third-Party Landing Place

O’Flynn’s experience in Ireland is informative. His firm’s proactive movement to third-party platforms as a donation landing place allowed their clients to continue using Facebook fundraising successfully. This is particularly so for Challenges, the firm’s specialty. Get Your Stories Straight is currently working with the Leukemia & Lymphoma Society in its first US Challenge iteration.

Winter added, “As with using any external suppliers, it’s good practice for all organizations to use a risk register, regularly appraise suppliers and always look at secondary options... It’s important to keep testing different methods to stay in line with trends, especially in these times of flux.”

Expand Your Idea of Success Beyond Revenue

GoodUnited, a Facebook fundraising technology firm, sees movement from an emphasis on revenue production to acquisition. Historically, most Facebook fundraising individuals have been new to the nonprofit they are supporting. This has made Facebook an efficient acquisition device when combined with software to capture donor and fundraiser data.

“At GoodUnited, we’re proud to have helped leading nonprofits raise over $1 billion from millions of donors in Meta with giving tools,” according to Nick Black, Founder of GoodUnited and CEO of Stop Soldier Suicide. “It has been a critical tool for nonprofits since the onset of COVID. The revenue is great, but even more important is that over 90% of these donors are new to our partners’ CRMs.”

“Our industry talks about the decline of individual giving, but with 73% of Americans spending two and half hours a day on social media, Americans aren’t less philanthropic; they’ve just shifted away from tried-and-true channels. With organizations relying on tens of millions of historic email records, we still find 90% net new supporters on social.”

O’Flynn agreed that the Challenges his firm supports in Ireland and the U.S. show similar “new donor” numbers.

“Even clients who have large P2P events calendars for decades still see 85% to 90% new fundraisers from Facebook Challenges,” he said. “Its flexibility and accessibility have unlocked a whole new audience for charity fundraising.” 

An interesting comparison is the acquisition cost of direct response versus social media fundraising. In direct response, it is typical for breakeven to occur two to three years after acquisition. In social media fundraising, we lament that we did not get a high enough net positive in year one.

Embrace and Plan for Continuing Change as the Norm 

Maintaining in-house expertise in a rapidly changing landscape solidifies roles, ideas and systems, sometimes to your detriment. This hard-earned and well-guarded experience can cause a lack of attention to the changing landscape. How do you keep from being blindsided? One solution is to retain an outside vendor to monitor what’s happening and provide intel to guide the in-house team.  And, all those faces may need to change regularly if they don’t embrace and seek change. 

So, what’s the bottom line?

Instead of being a discrete channel, Facebook fundraising has turned into a mature tool for revenue and acquisition in all channels. It is leading the way into other social media platforms, where our social good constituents live more and more often. O’Flynn’s clients’ social media Challenges operate heavily on Instagram even now.  

Facebook fundraising hit the social good market like a storm. The winds may have died down, but there are still billions blowing around in the breeze. The reason? Facebook is where our people are, regardless of where we process the donation.

Turning away from Facebook fundraising is turning away from social media.

Turning away from social media is turning away from our social good community.

The preceding blog was provided by an individual unaffiliated with NonProfit PRO. The views expressed within do not directly reflect the thoughts or opinions of NonProfit PRO.