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Posted at 12:55 PM ET, 12/08/2011

Campaigns harness social media graphs for cash


A visitor views works of art during the Art Expo Ukraine exhibition in Kiev, Ukraine, with this piece entitled "President Barack Obama" by Ukrainian artist Ruslan Kutnyak and formed from U.S. dollar bills, on display March 10, 2011. (Associated Press)

The days of rubber chicken campaign dinners are not behind us yet. But they have an increasingly powerful digital counterpart: social media fundraising platforms.

Barack Obama harnessed the power of his supporters’ social graphs in 2008 to create an unprecedented momentum when it came to online political fundraising. The 2012 Obama campaign, likely to produce the first billion-dollar-candidate, has a custom-built, online fundraising platform. But that doesn’t mean lesser-known candidates with smaller campaign budgets should feel left out of the high-stakes, social media fundraising race.

Why not? Just ask Fundly CEO Dave Boyce, who presented the Palo Alto-based company’s past successes, which include a 2011 Pollie Award for best Facebook application, and expectations for the 2012 election. (Full disclosure: Washington Post Co. Chairman and chief executive Donald E. Graham is a member of Facebook's board of directors.)

Bundlers, money bombs, e-mail campaigns, Facebook campaigns and general online donations are all possible with Fundly, which offers its services for nonprofits, including educational institutions and, of course, political campaigns. How big of a player is Fundly? The company has, to date, funneled over $230 million through its system for large and small donors alike and has secured $8.2 million in funding with its investor list including Kapor Capital, Correlation Ventures and Accelerator Ventures among others. Fundly competitors include Crowdrise, Razoo and Rally.

During his presentation, Boyce unveiled the Fundly Political Index, a chart depicting the social fundraising activity on Fundly, using Jan. 1, 2011 as a baseline.

“Because we have enough of a share of the social fundraising volume, we think that we can provide insight into the velocity of social fundraising that, in this 2012 cycle, will be more than we’ve ever seen before,” Boyce said.

The index rates social fundraising on a four-week average, and the company plans to continue the rating system through the 2012 election. According to Fundly’s findings, social fundraising is 13 times more active today than it was in January, with the peak of the cycle occurring in the third quarter at 44 times more activity than at the beginning of the year. Activity fell off in the summer months, but social fundraising was still slightly less than six times more active than Jan. 1 at its lowest.

“This election cycle will definitively be the most social of any election cycle that we’ve seen,” said Boyce, going on to cite the exponential growth of Facebook.


Republican presidential candidate Herman Cain delivers an announcement as his wife Gloria, left, looks on Dec. 3, 2011. (David Tulis - Associated Press)
“In the 2008 election cycle, Obama raised half-a-billion dollars online. I think each of the presidential nominees will do that and more,” said Boyce.

He went on to predict over $1 billion in online fundraising in the 2012 cycle, saying that there should be no air between a campaign’s online fundraising strategy and its social strategy. Separating the two, according to Boyce makes a campaign “smell like 2002.” Back then, said Boyce, “The transaction was the thing. With social, the transaction is just the beginning.”

Social media fundraising users are able to create profiles that broadcast their support for a particular organization or candidate while giving other users an opportunity to donate and/or create their own profiles. Individual giving can quickly gain momentum, since individual donors can bring their social networks along with them when they donate — something that was not possible when voters mailed in a check or shared their credit card information in a single transaction.

The system, argues Boyce, is merely a digital translation of the core concept behind fundraising. “People ask people to give. Isn’t that how all fundraising works? Yes. It’s how it’s always worked. It has always been a social activity.”

Asked what role Fundly may have played in the momentum of Herman Cain, who suspended his campaign on Dec. 3. “I don’t know what role we played,” said Boyce, “I will admit I was surprised at how vocal his supporters were online and almost every donation resulted in a solicitation from that donor. They wanted to wear it on their sleeve. I don’t know if that’s cause or effect.”

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By  |  12:55 PM ET, 12/08/2011

Categories:  Business, Technology

 
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