Facebook launches non-profit fundraiser platform
The end of 2015 saw Facebook launch a new fundraiser product for the US market which allows users to donate to charities without leaving the… Read more
The end of 2015 saw Facebook launch a new fundraiser product for the US market which allows users to donate to charities without leaving the Facebook platform. There are plans to launch the product in the UK during the course of 2016.
The fundraiser application allows certain non-profits – currently only Mercy Corps, the National Multiple Sclerosis Society and World Wildlife Fund, but expected to increase to 37 non-profits across a range of causes by early this year – to create dedicated fundraising pages to allow Facebook users to donate to a specific charity campaign. Facebook has also updated the “donate” button to make it available on the non-profits’ Facebook pages and posts.
The launch of this platform intrigues us for two reasons: (i) how will it affect the main players in the online donation market, such as JustGiving; and (ii) could this lead to Facebook furthering the technology to compete in the crowdfunding for-profit market?
With respect to the first of the two questions, up until now Facebook and JustGiving have lived together in mutual symbiosis – Facebook users share charitable campaigns on the social media site including a link to a JustGiving page to enable their friends to donate. Both parties profit from this relationship: Facebook receives the social sharing it craves and JustGiving processes the donation. But the relationship is much more important to JustGiving; in 2013, JustGiving recorded £48 million in donations from Facebook sources.
However, with the launch of Facebook’s fundraising platform this relationship is likely to dwindle as Facebook users can now direct their friends to a fundraising page within the Facebook environment. Facebook’s network effect means that if its fundraising platform extends to the majority of major global non-profits, the relevance of JustGiving and other players in the market will diminish.
On the question of expanding the fundraising platform to crowdfunding, Facebook has a history of “platform creep” – creating a new isolated user experience and, depending on its success, expanding and repurposing it across different sectors. An example of this is the original donate button when it launched in 2013; originally purposed just to allow users to donate to non-profits, it was swiftly accompanied by the “buy” button for online shopping. Therefore, it would not be unprecedented behaviour should Facebook decide to extend the fundraising platform into the crowdfunding space.
Crowdfunding market interaction is much like the relationship between social media and online donation platforms as explained above – crowdfunding campaign organisers rely on promotion of their investment opportunities on social media which allows them to reach their target markets. Again much like the JustGiving relationship, should Facebook launch a competitor crowdfunding application it would streamline the user experience by removing the friction of having to exit the Facebook environment to process the investment. Depending on the user, there may also be other efficiencies such as pre-stored payment details on Facebook and instant social media sharing options.
So, for now the situation is very much “watch this space”. But, the battle lines are being drawn for what could turn out to be a momentous shift in the non-profit donation market, perhaps even extending to the for-profit crowdfunding space that makes currently well-known service providers an irrelevance.
For further information, please contact John Alder.
The article above, current at the dates of publication, is for reference purposes only.It does not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action.