Hooray to my bud Jason Dick at A Small Change for his interview with Adam Penenberg, author of Viral Loop: From Facebook to Twitter, How Today’s Smartest Businesses Grow Themselves.

And hooray to Adam Penenberg for applying the concept of the viral loop to nonprofits.

(And hooray to Give and Take for calling the article to our attention!)

Since we’re in the midst of this series on sustainable fundraising practices for nonprofits, however, I’d like to suggest to Adam that we apply his concept differently. Sustainably, you know.

Here’s Adam’s recommendation:

Viral marketing relies on people passing on information they deem worthy–whether it’s a link to a funny video on YouTube, a political message, petitions, etc. If a nonprofit has a passionate core group of donors then the key would be to incentivize these donors to reach out to their social networks of friends, family, colleagues and neighbors. It would work well with a specific campaign. Ideally, the non-profit could create a Facebook application that could incentivize donations. Let’s say your organization is called Save the Cats (STC). I’d set it up like this: Create a Save the Cats branded app fueled by virtual currency. Just by downloading the you receive $100 in STC dollars. They can be spent at any number of retailers that donate inventory the retailer would like to sell anyway. You then get $30 off a shirt from the Gap, $20 off a rental car, $40 off a pair of rollerblades, etc. As your cash reserves dwindle you can earn more virtual currency–it doesn’t cost STC anything–by getting 5 friends to download the app and donating a certain amount of money. It should be small increments, say, $10 each. And so on and so on. Once you have a large enough installed base you can try al sorts of things. At the very least you gain thousands or even hundreds of thousands of new names to add to your donor lists. You raise money for your non-profit. And you spread your message. It’s a win-win-win for everyone involved.

What’s not sustainable about such an approach?

It makes the marketing campaign viral, not the cause.

That is, taken in isolation, Adam’s recommendation makes perfect sense. But envision two nonprofits doing the same thing and you’ll begin to see a challenge emerging:

Should I work for $20 in Save The Cat dollars? Or should I instead work for $20 in Save The Marmot dollars, since STM dollars are redeemable at Banana Republic, whereas STC dollars are only redeemable at Old Navy, which I like much less?

Multiply this by ten nonprofits, and then ten thousand–just a fraction of the 1.5 million or so nonprofits in existence today–and you bring to the virtual arena the very same kind of challenges we have in the physical world with fruitcake sales, nonprofit auctions, golf scrambles, and every other kind of fundraising event where we promote involvement through self-interest rather than direct, personal involvement in the cause: Commodification. As these kind of campaigns proliferate, we select our involvement more and more based on the self-interest reward and less and less on the cause.

Not sustainable.

The alternative?

What Lave, Wenger, and other Situated Learning specialists call Legitimate Peripheral Participation:

Legitimate peripheral participation (LPP) is a theoretical description of how newcomers become experienced members and eventually old timers of a community of practice or collaborative project (Lave & Wenger 1991). According to LPP, newcomers become members of a community initially by participating in simple and low-risk tasks that are nonetheless productive and necessary and further the goals of the community. Through peripheral activities, novices become acquainted with the tasks, vocabulary, and organizing principles of the community.

Gradually, as newcomers become old timers, their participation takes forms that are more and more central to the functioning of the community. LPP suggests that membership in a community of practice is mediated by the possible forms of participation to which newcomers have access, both physically and socially. If newcomers can directly observe the practices of experts, they understand the broader context into which their own efforts fit. Conversely LPP suggests that newcomers who are separated from the experts have limited access to their tools and community and therefore have limited growth.

In other words, rather than making a Save The Cat Dollars campaign go viral, find ways for people to save cats through social networking that are “simple and low-risk tasks that are nonetheless productive and necessary and further the goals of the community” such that saving cats itself becomes a viral cause.

For ideas on how nonprofits are already doing this, read Clay Shirky’s Cognitive Surplus at the same time you’re reading Adam’s Viral Loop.

It may take you two books to learn how to do it this way. But, hey, at least then you’ll be on the road to fundraising sustainability.