Crowdfunding, or any form of group fundraising, has been around for decades. The term used to refer to startups and entrepreneurs looking for investors (à la Shark Tank). More recently, online crowdfunding sites like Plumfund have erupted in popularity.
These fundraising pages allow individuals and organizations to create an online giving campaign where friends and supporters can pay right on the page using the site’s credit card processor. Because of its accessibility and ease of use, online crowdfunding has become popular amongst individuals raising money for personal causes such as medical funds, home renovations, honeymoons, celebrations and more.
It’s more important than ever for nonprofits and charities—organizations that follow traditional event fundraising models—to capitalize on these new revenue opportunities.
In 2015, the crowdfunding industry raised $34.4B, and 30 percent went to social causes. The World Bank estimates crowdfunding will reach a whopping $90B by 2017 if it continues growing at its current rate. Needless to say, the iron is hot!
Crowdfunding is goal-specific, fast-paced and fun. Could your nonprofit benefit from the trend?
Crowdfunding for Nonprofits
Here are 3 quick ways nonprofit organizations can use crowdfunding to raise more for their causes.
1. Create project-specific goals
Crowdfunding is perfectly suited to project-based, short-term goals. People looking to make a powerful, immediate impact with their dollars may even be more willing to give to crowdfunding campaigns than a general monthly fund. Here’s a few timely projects your organization can consider:
- Seasonal or milestone fund: A winter holiday giving campaign is a mainstay for many charities, but you can center campaigns around other special milestones as well. Think anniversaries, organization milestones, election campaigns, big sporting events, municipal holidays and more) year-round. Make an annual giving campaign more dynamic by adding crowdfunding to the mix.
- Emergency relief fund: Perhaps sudden flooding has caused damage to your building and suspended operations. Or your city is experiencing extreme weather, and your organization wants to provide shelter, medical services and hot/cold beverages to the elderly and people without homes. Create a site demonstrating the urgent need using dollar and time specific goals (i.e. “Will you help us raise $10,000 in the next 2 weeks to provide shelter for 100 families?”).
Note: If your nonprofit holds fundraising events, you’ll notice that crowdfunding sites follow the same principles of an in-person Fund a Need or Cash Appeal. For example, if you’re raising money to fund a certain piece of equipment or program that costs $1,000, you’re already familiar with the strategies behind project-specific crowdfunding campaigns.
Expert tip: Want to run a successful Fund-a-Need at your next event fundraiser? Click here to try out Checklist Builder, a charity event organizer created by our friends at Winspire.
2. Utilize social media
Crowdfunding platforms let you engage new donors, educate them on your cause and extract more funds for your mission.
Remember the viral “ice bucket challenge” of 2014? The ALS Association successfully raised $115 million in 8 weeks—including countless donors who had never heard of ALS before.
How were they able to strike crowdfunding gold?
First, they used a completely unique – and fun – idea. (See: America’s Funniest Home Videos’ “Ice Bucket Fails” compilation.) Never before had we been challenged to either dunk ourselves with a bucket of cold water and/or donate $100 to ALS. The challenge expertly tapped into people’s competitive and social nature.
They also kept the ask level relatively low. The challenge was as much about raising awareness as raising critical dollars for ALS research. While $100 was recommended, people were free to complete the challenge and give as much or as little as they wanted. Even those who weren’t able to donate could feel good about being part of the ripple effect.
More importantly, the challenge tapped into the viral nature of social media in a way we have not seen before or since. What nonprofits can do to expand their reach online:
- Create a sense of community. Crowdfunding sites make donors feel like they’re contributing to a bigger purpose. They can read comments from backers around the world and leave their own mark on the cause. This can create a very powerful connection with each donor.
- Get the support of a few key donors (even if there’s just a few!). It takes just a few clicks for supporters to share a crowdfunding site link with multiple social networks. With the power of social media, you never know how far the right campaign could spread.
- Offer customizable giving options. Let donors decide how much they want to give, and emphasize that no donation is too small – every dollar counts. This will encourage more people to give and share freely.
3. Tell your story
The ability to customize text and host visuals to tell the unique story of your organization is a huge advantage of crowdfunding sites
- Visuals: Make sure they’re high quality and impactful. Keep videos short (under 2 minutes) and simple.
- Written stories and testimonials: Stories must be concise an
d urgent with a clear beginning, middle and conclusion. Quotes from beneficiaries of your services, statistics and stories of change are all great options to feature on your site.
For more practical tips on telling your nonprofit’s story, see “The Power of Storytelling During Nonprofit Events.”
Encourage supporters to become “evangelists” for your cause by creating their own sites. Facebook, for example, has a new feature, “Fundraisers,” that will allow people to raise money for their favorite nonprofits (501(c)(3) organizations in the U.S. that have registered with Facebook for this purpose). Many other crowdfunding sites will allow supporters to create their own personal fundraising pages.
Two common uses of personal fundraising pages:
- Celebrations. Special occasions where we typically give gifts, like birthdays and weddings, are the perfect opportunity to highlight charitable causes. Studies show millennials in particular are growing tired of having more “stuff” and want to make a difference in the world. Make it easy by providing a default description of your organization on these sites.
- Team and peer-to-peer fundraising events. This works great for 5K runs, relays, walk-a-thons and other events in which participants are raising money for a goal. Teammates and participants write about their personal connection to the cause, upload pictures and share the link on social networks and by email. The more personal the ask, the higher the likelihood friends and family will give.
Choose the crowdfunding platform that’s right for you
Stick to crowdfunding sites designed specifically to help nonprofits raise money. In addition, find a nonprofit crowdfunding site that allows customizability, but still a user-friendly, sleek and professional template to save you time.
The site should make it very easy to accept donations. Check if they charge for creating campaigns; some (like Plumfund) are free to host and only charge a processing fee on credit card donations (typically around 3%). Finally, the site must have ample options for sharing via social media.
To find the best fit for your organization, take advantage of the free trial period most sites offer.
Bottom line: Crowdfunding need not replace normal fundraising activities like annual events. Instead, online crowdfunding can become part of your development strategy year-round. When used correctly, project-specific and timely crowdfunding campaigns can amplify event revenue to record-breaking heights.
Today’s blog comes to you from Summy at Winspire, a provider of unique, big-ticket travel packages charities can use in their fundraising auctions and raffles. As Fundraising Editor, Summy brings hands-on experience in nonprofit development, event fundraising and publishing to their blog, Winspire News. Click here to sign up for weekly articles, time-saving templates and other resources designed to help organizations meet and exceed their fundraising goals. (As an added bonus, you’ll be entered to win over $1,000 in donated auction items for use in your next fundraiser!)