Twollars, the Twitter-based “currency of appreciation” that came out quietly in February, stepped into the spotlight this week with the launch of a new site design, a write-up by the high-profile online tech magazine Mashable, and even a passing mention in Business Week. CharityWater.org scored more than $1,500 US from Twollars — but will those virtual micro-donations add up to real-world funds for other charities?

Comments about Twollars at Mashable.com range from “This is fantastic and ingenious” to “This is just pure nonsense” to questions about what advantage this new virtual currency system offers to charities over TipJoy, which enables donations by Twitter users in real-world currency.

It may or may not be a good idea but try explaining it to someone who has just started using twitter/the internet and they won’t understand it…  Unless you can lock down what the service does in one or two sentences I think it becomes very difficult to promote it.
~ fluidcreativity on Mashable.com

How Twollars Works

According to the FAQ, every Twitter user starts out with 50 twollars (tw). You can check your balance and your “generosity rating” at http://twollars.com/your_twitter_username (substituting in your own Twitter username, of course).

Give Twollars

Any Twitter user can send twollars to any other Twitter user, simply by “tweeting” that  intention.  However, only charities can register to turn these donations into real dollars by selling them to someone else.

Twollars.com does not take a cut, by the way: 100% of any funds raised go to the charity. To register as a charity, you will be asked to provide your Twitter username and password, your email address, and the email address at which you receive PayPal payments.  No proof of nonprofit status is required.

Get Twollars

When your initial 50 tw are gone, you can buy more twollars from a charity at a rate of 10 for 1 US dollar, or receive them as a “token of appreciation” from another Twitter user. Twollars.com has helpfully drafted up a tweet to make it easier to ask your followers for a donation:

Appreciate my tweets? Please send me Twollars, write: ‘@replace_with_your_twitter_name 5 Twollars because …’ via http://twollars.com

You can also “go to one of the sites which rewards its users and visitors by giving away twollars.” (While the FAQ mentions that there are not very many of these sites yet, since the program is new, it would be helpful to know where to look for them. A directory of participating websites might be something for the Twollars folks to consider.)

Clear?

No problem: @twollarsmsgs will give you a nudge on Twitter if you send a donation to yourself or try to spend twollars beyond your current balance.

Real Money for Charity?

According to the company’s May 28th press release, Twollars has raised more than $1,500 US for CharityWater.org — a deserving cause that does great work, and has made a name for itself for innovative use of social media for fundraising and raising awareness.

Does that mean that your charity should set its sights on a similar fundraising goal?

Now, I don’t want to sound curmudgeonly here, but I do think it's vital to recognize that Charity Water was a test case or demo project for Twollars.com initial launch — so that experience is likely not typical of what other charities can expect.

In essence, Twollars.com pledged $1500 to Charity Water in a sponsorship role and fulfilled that pledge by buying the twollars that were donated to the charity by Twitter users. It’s hard to tell, looking now at the tracking page for that campaign, how many of those twollar donations were made with the initial free 50tw granted to each Twitter account, rather from twollars purchased by the donor for the purpose.

So it’s hard to judge how long it might take for another charity to hit the $1500 mark, without a similar corporate pledge and the publicity around a new product launch. When the conversion of twollars to dollars depends on Twitter users reaching for their credit cards instead of their keyboards, and promotion has to come from your own network of supporters,  “your mileage may vary.”

In the final analysis, however, we may find — as with a number of other tools designed for fundraising on social networks, Facebook Causes being a case in point — that the real benefit to participating nonprofits lies in raising awareness of the cause, not necessarily in the dollars (or twollars!) that are raised through the micro-donations.

What do you think?

Will Twitter users take the time to figure out how Twollars works?

Will they find the dollars-to-twollars-to-dollars donation process a nuisance, or will participating in this new “virtual economy” prove to be more entertaining for them than clicking a “Donate Now” button on your website?

Will your charity try Twollars for raising funds and/or awareness?