There is a lot of pessimism in our industry.

I hear two main reasons:

• Decline in Individual Giving
• Lack of New Leads for Existing Fundraising Programs

I get it, but here’s the question that unlocks 2024 and beyond:

If >90% of leads from social media are new to your house file... what does that mean?

To me, it means that we haven’t saturated the market or that Americans aren’t less philanthropic; it just means that our supporters aren’t where they used to be.

Americans spend 2.5 hours a day on social networks, with Facebook leading the way at 33 minutes a day in 2022.

Yeah, I find that staggering too, but I’m not going to look a gift horse in the mouth.

I see...

Opportunity. Hope. Growth.

The best news is that these aren’t net new channels you need to build and monetize; you’ve already done the work to build your social communities.

Now that the table has been set, let’s talk about Facebook Challenges.

Yes, ROAS has declined year over year and is starting to find an equilibrium.

However, what if we’ve been looking at Challenges all wrong?

What if the incredible sugar rush of immediate revenue at otherworldly margins caused us to lose sight of the real value: new supporters, data, and yes... revenue?

This realization hit me right between the eyes in the summer of 2023 when I had the Stop Soldier Suicide (SSS) team, a nonprofit I co-founded and sit on the board of, visit GoodUnited for an in-person 2024 planning workshop.

SSS has earned >$10,000,000 from Facebook Challenges.

But also >1,000,000 leads of which >97% were new to our house file.

We (SSS) hadn’t done much of anything with those leads.

What about the decline of individual giving and lack of leads?

I believe that SSS and all of us need to rethink Challenges for what it actually is, sustainable fuel... Not just a sugar rush of immediate revenue.

So much so, with my SSS co-founder hat on, I’m ALL IN with Challenges in 2024 and view it as the key to our growth.

Here’s why I’m putting my money where my mouth is:

Get Paid to Acquire New Leads

M+R’s 2023 Benchmark Report says that the average cost to acquire a lead in 2023 was $3.41.

In the same report, M+R says that email lists lost subscribers with an average decrease of 2%.

If we assume that the reason we’re willing to acquire leads at $3.41 is that over time we can cultivate them to drive a positive lifetime value, here’s what that graph could look like:

Over time, maybe we get to +$3 the graph shows.

Say you just break even through a challenge and put your leads through the same cultivation effort; here’s the same graph but instead of starting $3.41 in the hole, you start at $0:

That gap between the two lines?

Opportunity. Hope. Growth.

The most common pushback I hear is that “these aren’t qualified leads”.

Really? Then what is a qualified lead?

These “leads” are people in the U.S. who fill out a form to do a peer-to-peer fundraising event for your organization and give you consent to contact them.

Embrace the change and transform Facebook into a fundraising, data, and lead machine.

Fuel Existing Fundraising Programs

Building off the graph above, the reason we’re willing to pay $3.41 to acquire a lead is that we can drive a positive lifetime value.

Challenges are unique in that if you offer a free incentive, you’re acquiring four mediums to contact the individual:

• Email Address
• Home Address
• Phone Number
• Messenger

Here’s the annual value of those four channels based on some market benchmarks:

Email Address: $2.70 per year

• Per M+R’s 2023 Benchmark Report, the average nonprofit sends 30 fundraising emails per year, with each email generating $0.09.

Home Address: $2.25 per year via direct mail

• Per a direct response friend, I’m told that for a direct mail ask with a match and assuming one mailer a year, there is a 5% response rate with the average gift being $45.

Phone Number: $0.57 per year via SMS

• Per M+R’s 2023 Benchmark Report, the average nonprofit sends 21 text messages per year with a 0.09% response rate, and I’m assuming a $30 donation.

Messenger: $3.17 per year via GoodUnited

• It’s early days, but this is the value per messenger subscriber in GoodUnited.

Additionally, several of our partners have reported the following results from Facebook Challenge leads put through a wealth screening tool:

Net Worth

• Percentage of Challenge leads with <$1m net worth: 88.64%
• Percentage of Challenge leads with $1m-$2.5m net worth: 9.14%
• Percentage of Challenge leads with $2.5m-$5m net worth: 1.64%
• Percentage of Challenge leads with $5m-$10m net worth: 0.49%
• Percentage of Challenge leads with $10m-$20m net worth: 0.08%
• Percentage of Challenge leads with $20m+ net worth: 0.01%

I know, that’s a lot of math.

Here’s a free calculator I built in Google Sheets that you can use to gauge the impact of Challenge leads on your existing fundraising programs.

Drive Ridiculous Margin With Corporate Sponsors

This is where we go supernova.

The team at SSS did an incredible job and landed USAA as a sponsor for Challenges in 2022 and again in 2023.

USAA agreed to a “brand lock” on a series of 40 challenges for $250,000 (I think they got off cheap).

Why?

The same reason corporations sponsor peer-to-peer events or galas, to position their brand to consumers.

Even better, USAA is getting quantifiable value on their investment.

Assuming USAA covered half of the $500,000 ad spend for the 40 challenges, here’s their quantifiable return on investment:

• Ad Impressions: 333,333,333
• Leads: 100,000
• Group Members: 90,000
• Group Engagements: 1,620,000
• Messenger Engagements: 300,000
• Number of T-Shirts: 10,000

I’m still amazed at what people will do for a free shirt, but I’ve seen the SSS + USAA100 Mile Challenge t-shirt in the wild TWICE.

I almost crashed my car both times trying to take a picture.

The point is that Facebook Challenges are perfect opportunities to build deeper or new relationships with corporate partners.

Even better, having a corporate partner cover a part or all of the ad spend has a dramatic effect on your immediate returns.

Assuming a starting ROAS of ~250%, here’s ROAS adjusted for % of ad spend covered:

Infinity is a great word when talking about returns.