Giving Contest Hell: Unruly Crowds and Lottery Tickets
Two Things You Need to Learn from This Post:
1. Crowds like having the illusion of control.
2. Online giving contests are as effective of a fundraising strategy as buying lottery tickets.
A More Detailed Exploration:
Can you imagine what the Chase Bank marketing team is going thru right now? Thanks to the NY Times article on Friday and a number of blog posts since then, their $5 million charity giveaway seems to have jumped off the tracks – at least for some people.
With most Americans seething over the banking crisis and dealing with the economic fallout of greed, I’m not surprised to see the quick condemnations some fellow do-gooders have made. However, I wouldn’t rush to judgment until we have better insight and clearer facts. Without those, we’re all just speculating and projecting our biases.
[If you're just learning about the Chase Bank brouhaha, I recommend checking out two posts Beth Kanter has published. The first provides a summary of what's happened and a second offers very good insight for how to run contests without inciting a riot.]
The Bigger Picture
Whatever shakes out, I can tell you that this uproar is rooted in two bigger picture issues. Both of which have always been here and will continue to surface in different forms. The first is all about who’s in control and the second is how charities need to spend their resources.
Item #1: Who’s in Control?
The next time you consider giving away $5 million to charity, try to learn from this dust up. Right now, the brand management team for Chase has to be wondering: What went wrong?
Control. That’s what went wrong. When you create a game, you need to take great care in setting ground rules that reflect reality.
You might have noticed the prevalent belief that the Internet will lead to the inevitable democratization of every facet of humankind. It’s all about transparency and giving control to the crowd. Whether or not we accept this perception as fact, it’s still the commonly held perception. And, perception is reality, right?
The big mistake Chase made was failing to construct its contest with a strong enough illusion that the crowd was calling the shots.
Have you ever ridden those old fashioned car rides at the amusement park? The ones that have a working steering wheel, but only let you steer between guide rails? I remember riding one for the first time and was all excited to be able to drive a real car.
I still remember the disappointment when I discovered the steering wheel was basically irrelevant and the only thing I could really do was press the gas pedals or brake to any real effect. Once that illusion of control was over, I lost interest in the ride.
Building in the Illusion of Control
In November, I attended the Audience Conference hosted by Loren Feldman of 1938 Media. It was the best one-day conference I have attended in a long time, especially for one within the social media realm.
Out of the many nuggets of wisdom that came out of it was from Ethan Kaplan, VP of Technology for Warner Brothers records. He was discussing the space between artists and audiences and how technology forces us to reconsider our notions of this relationship. Traditionally, there’s been an intentional separation between the two with the artists having the elevated stage. During the punk era, this separation was eliminated and the fans once again had equally footing as their favored bands.
In the question and answer session, an interesting idea was put forth. With the advent of online and social media, audiences have come to expect equal or higher footing than the show. While many will conclude that means we need to cede control, the savvy players will realize the key is to design your stage so that the audience perceives it is above the show, but, in fact, is below it.
Issue #2: Dealing with the Lottery Effect
Even with the latent hostility towards corporations within the charity sector, I suspect a good deal of this outrage comes from the frustration with being made to play the contest lottery yet again. Seriously, how many contests have we seen in 2009? Feel free to document that answer as a comment.
Personally, I think giving contests are the equivalent of buying lottery tickets. Sure, everyone has a chance to win, but there’s much better, more sustainable ways to grow your organization. Don’t just take my word on this, here’s what Kjerstin Erickson from Forge, who’s won a number of these contests, had to say about it:
[E]ach time we ask our network to vote we use a valuable asset (the time and attention of our network) that we could have used for something else. That is, each request for a vote (whether fulfilled or not) represents an opportunity cost to the organization doing the asking.
She goes on to say even more about contest and her full post is worth checking out. I’d venture to guess that her sentiments are shared by many others in the charity space.
But, perhaps the bigger parallel to lottery tickets is that these contests create windfalls for charities instead of sustainable revenue sources. As cited in the NY Time article, the first round prize of $25,000 is going to be the largest gift in the history of one of the first round winners.
Their biggest priority now isn’t winning the second round. Rather, it needs to be creating the greatest impact from these monies and demonstrating to other donors that they are worthy of ongoing support of this magnitude. Otherwise, they’ll be like most people who win the lottery: have a great time spending their winnings, but back in the same, if not worse shape, in just a few months when the money is gone.
Questions for You
For those who track giving contests, I have two questions. Has anyone researched whether or not they help build capacity? Do we even know if giving contests help create vibrant, sustainable charities? Or are they just hit and miss ventures?
Great post!
Couple thoughts though. First, I don’t think that the “quick condemnation” doesn’t have its facts right. People are pissed because of some specific decisions Chase made (not having a leaderboard, eliminating the individual organization vote tallys with a few days to go), and some decisions they seem to have made (getting rid of organization’s whose missions they didn’t find palatable). While you’re right to suggest people should hold off full condemnation until it’s for sure that Chase did go as deceptively far as eliminating groups that they led to believe would win, it’s totally legitimate, right now, to be pretty upset about the way the whole thing was run.
Second, your assertion that Chase failed to give enough of the illusion of control is just a hair off I think. I think the problem is that they gave the Illusion of control and then were deceptive about the actual game that they were playing. The point is somewhat tangential to the internet’s true democratizing power: Chase created a contest that made almost everyone involved think that if they were one of the top 100 vote getters, they got $25,000. Period. Whether they intended to reneg the whole time is besides the point – people are angry about the deception of being led to believe something that was different than reality. I would say that’s a failure not of NOT creating the illusion of control, but of pretending things were one way, leading people down that path, and then switching midstream. <—This actually could be saying what you said and I'm just reading it wrong, BTW.
Great post though seriously – huge addition to the convo
Nathaniel
We agree that Chase made mistakes with how it presented and ran its contest.
I choose to wait until I have more facts before I judge what transpired. Knowing how many moving parts they have in this contest (e.g. cutting $25,000 checks for 100 different organizations) and that they do not have an active presence in social media, how can we be surprised they are being slow to respond?
The reality is that Chase has $5 million to give away to charities. It’s their money, so they have the control.
Unfortunately for them, they set up a contest that promised the crowd complete control (a stage built below the audience). But halfway thru the show, the crowd realized they had been duped (the stage was actually above the crowd). Poor architecture and poor execution.
The big issue is transparency – how much do you want to be open and you can design around that. They designed an open contest, but didn’t behave in an open manner. They could have retained control with a two-step process or pre-vetting the groups.
What surprises me is that they haven’t responded to anything yet – except for the quote in the NY Times where they couldn’t talk about it. We didn’t hear an apology, a “oops we’re experimenting and we’re learning,” or a valid reason for disqualifying the groups. Total radio silence.
And, they remove all the comments from their Facebook Fan Page and made so you couldn’t post on their wall.
What are they hiding?
This seems to me to be a classic Cloud and Tower scenario – with plenty of lightning being sparked.
For a company that hasn’t had a robust social media presence and comes from an industry know for its deft use of fine print, can we really be surprised and shocked by this? They are new immigrants to this hyperconnected land and not fully aware of the cultural expectations.
I think their radio silence comes from the fact that the online chatter is overwhelmingly favorable. If only three organizations are complaining, why focus serious resources on addressing them? The vast majority of consumers are praising this contest.
For a company and an industry accustomed to serving as the corporate boogeyman, this situation is a mere blip on the radar. This outrage will blow over and they will have a net positive achievement.
I wouldn’t advise my corporate clients to take this approach, but I can understand their reasoning, if this is indeed the case.
As Beth said, the biggest issue is transparency. Especially for brands that are not trusted to begin with – like Chase Bank. It does appear that their intent was partially to quickly get millions of Facebook fans that they could market to. Not cool.
I agree with Beth and you that transparency is the flash point here. It’s created a void that everyone is filling with their own perceptions rather than facts. Appearance is in the eye of the beholder. Distrust of Chase Bank, no matter how widely shared, doesn’t prove any wrongdoing on their part.
Hi Scott: Thanks for this posting. Up here in Canada, Aviva Insurance (http://www.avivacommunityfund.org/) has launched a similar online voting contest. It’s been interesting to see how it’s swept through the nonprofit community in Canada: everyone from little after school programs, to United Ways to city governments (!!!!) have submitted ideas.
I’ve been really troubled by the lack of transparency in this process and also the degree to which this contest encourages hyper-competition. (I am also wondering if new charities are being set up just to take advantage of such contests.) Looking through the lists of organizations, one becomes overwhelmed by a cacophony of tiny charities – plus a few large organizations who should know better – all screaming “Pick Me! Pick Me!”. But I predict that in 2010, we’ll see MANY more companies in Canada move to this type of giving model- (goodbye United Way!) — and I can only hope that folks like yourself, Beth Kanter, Alison Fine, and other smart people with a passion for the nonprofit sector, keep up the dialogue on these news models of corporate-community engagement.
Thanks! (p.s. I wanted to post this blog entry on Twitter but couldn’t find the “Share” button– is it here somewhere?”
Doug Kerr
Toronto, Canada
Doug -
Thanks for the heads up on the Canadian experience of this trend. I agree with you that we’ll see more of them in 2010 – it’s too easy and duplicable for others not to try it.
In regards to the Share button, I’ve added it to the post thanks to your inquiry.