A number of people have recently asked me about social media and its relation to fundraising. Some of the questions we have been asked include:

1. How can we leverage social media to raise money for our nonprofit organization?
2. Will our online or social media fundraising activities cannibalize our traditional fundraising activities?
3. How do we set up a social media campaign to raise money?

We decided to conduct some additional research on the topic and make it the subject of one of our articles. Here are some of our findings.

Many organizations both large and small are using social media to successfully build awareness and secure money for their organizations. Consider Scott Stadum’s experience. Scott is a former user experience analyst and a current volunteer with idealist.org, a website that facilitates connections between individuals and institutions that are interested in improving their communities. The site receives more than 50,000 unique visitors each day.

Scott has been a part of two major campaigns. The first fundraising campaign is aimed at raising money to cover some of the operating costs for idealist.org. The organization has created a banner across the top of its website with a “donate now” tab making it easy for people to give. At the time of writing, they have had 7,543 people donate a total of $245,988 and are closing in on the halfway mark of the $500,000 goal.

idealist.org also has made it easy for people to share information about the organization with a “Share this Via” button that allows one to post information to his or her Facebook, Twitter, Digg or Reddit accounts. Idealist also maintains its own presence on Facebook, Twitter, LinkedIn and MySpace, which has been essential in its fundraising activities.

The second campaign that Scott was involved with was the Chase Community Giving challenge on Facebook.

According to Scott, the Chase Community Giving challenge was exciting, because Chase was giving away $5 million to various charities, and asked people on Facebook to help pick the nonprofits to receive this money. (The company gave 100 charities $25K, five runner-ups got $100K and one charity, Invisible Children, Inc. received $1M.)

The contest was relatively simple. People visited www.facebook.com/ChaseCommunityGiving to vote for their favorite nonprofit and then suggested friends and others on Facebook do the same. The nonprofits on the list focus on issues such as education, healthcare, housing, environmental issues, combating hunger, arts and culture, human services and animal welfare.

As part of the Chase Community Giving, idealist.org was one of the runner ups that was awarded $100K.

We asked Scott to explain how they ended up winning the $100k and learned that the organization did a lot of planning and strategizing around the Chase Community Giving challenge. “Idealist really took a coordinated approach to this challenge. Each office came up with its game plan. We asked our employees to leverage their personal social media accounts to drive votes.”

The organization also leveraged e-mail and its official accounts on Facebook, Twitter, MySpace and LinkedIn to drive votes and massive viral awareness of the contest. “Idealist has been very active in engaging with communities via these platforms, so it was natural that we’d ask for votes and support during the Chase Community Giving challenge. We were able to reach and galvanize our supporters quickly.”

Finally, in one instance, they took the plea for support to the streets. “At the time of the challenge, I was working in Argentina in the Buenos Aires office. Many people in Argentina are using Facebook, so we decided to dress up like bankers and go out and give away bottled water with a flyer on the challenge, along with a request that people vote for us. The event on the streets of Buenos Aires was a success, and it led to media coverage, which undoubtedly helped us secure more votes.”

Scott concludes that social media has been a real boon for idealist.org. It has made reaching new audiences very easy. He believes more nonprofits can leverage social media for fundraising to reach different demographic profiles and target audiences than they’d reach through traditional fundraising activities, such as telethons or letter writing campaigns.