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Crowdfunding for Non-Profits

Crowdfunding is running a campaign (usually online) where an organization raises small

amounts of money from a large group of people. That can include a lot of different kinds of

specific campaigns.

Last year, crowdfunding websites (sites that host, facilitate or aggregate others’ campaigns, including for-profit efforts) raised $2.7 billion worldwide from individuals—an 81% increase in one year. And that amount is expected to nearly double again, growing to $5.1 billion in 2013. North America is currently the epicenter of crowdfunding, accounting for over 60% of global activity. Crowdfunding can be used successfully in two ways:

Online campaigns surrounding particular causes or projects

Live events, hosted by a third party like LivePC GivePC

Popular fundraising tools include Causes, Causevox, FirstGiving, Razoo (LivePC GivePC),

Kimbia and StayClassy.

Some statistics from the CraigConnects website:

$88 is the average donation size

$534 is the average total amount raised by an individual

$9237 is the average amount raised when groups are working on a team to fundraise

28% of donors are repeat donors

http://bit.ly/1CXyN4l lists the top 7 crowdfunding platforms and features of each.

Groups who use crowdfunding successfully do the following:

Organizations without the ability to launch large promotional campaigns participate in larger

fundraising campaigns, like GiveMN, LivePC GivePC, North Texas Giving Day etc because they

benefit from the pooled marketing, promotion and branding of the event.

These groups tell engaging and personal stories to connect people to their fundraiser in an

authentic way. They are using videos and in-person events to connect to their community of

donors.

They set realistic fundraising goals.

They develop a plan to promote the fundraiser and rally personal networks via multiple

channels – board members, volunteers, program recipients, media outlets.

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They demonstrate the impact of each donation and of the campaign overall. For example, “a

$2,500 provides a scholarship for a student in our Leadership Awards Program.”

Keep the community updated on the fundraising progress through various channels, like the

online tools, social media and websites.

Brand the fundraising page within the tools they’re using – so changing the default settings to

include logos, colors, fonts where possible.

Stand out by making the fundraiser unique and fun to get people’s attention, not just a

broadcast of ‘here is a fundraiser, donate now.’

Always thank their donors via email, social media, and handwritten notes.

Organizations work within the frameworks of existing larger campaigns and allow them to exist

as their annual appeal.

Reasons to pursue a campaign:

Crowdfunding provides a very useful proxy (donations) for the approval level or market

feedback for the quality of an idea, concept or promotion. (like a prototype product, program

etc)

The method provides geographic leverage, can be easily shared via social media and works

around the clock, making it attractive to organizations with more limited resources.

Campaign can leverage the time and efforts of its organizers after you pass a threshold of

participation by organizers and collaborators. (I don’t know what that threshold is – this is my

belief based on experience)

Pitfalls to avoid and risks:

The space is getting crowded – and it’s kind of an also-ran (the idea is no longer novel), since

LivePC and LoveUT already exist here in Utah… Also, there are 31 different platforms for

crowdfunding online.

Crowdfunding is not a shortcut – while it is facilitated by an online tool, this type of campaign

relies on an existing audience, community or group of interested stakeholders for success. In

some cases, a well-planned marketing or promotional campaign can have virality of its own and

reach a larger audience to improve a campaign’s success. (ice bucket challenge, compelling

video story that goes viral)

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Many campaigns offer rewards for specific donation levels – sometimes thank you items with a

monetary value attached to them (sweatshirt, coffee mug) may inhibit donations or make a

donor reluctant. NOTE – only de minimus rewards may be offered in the Razoo platform

(live/give and LoveUT), because all contributors receive a tax letter for their full donation.

Some warn that potential donors are less likely to be repeat donors (although others say that those who respond are likely to be repeat donors), and that the time, energy, and effort required to host a successful crowdfunding event is draining, with very little promise for a long-term financial return. http://bit.ly/1nP17w5

Recommended path forward:

Participate in the Live / Love campaigns and work within their frameworks, but use the

platforms to run an annual campaign-style effort.

To run a strong campaign, http://www.bethkanter.org/5-crowdfunding-tips/ recommends

starting with a list of 100 people who will help this campaign and organizing them into

promoters, fundraisers (who will solicit their peers actively) and donors. They need to be

engaged in the effort in this campaign model.

Center a campaign around a specific goal with a compelling narrative. Tie the goal to a project

or defined outcome. Tell the story with compelling details, like videos, images and a rich story

about the organization’s impact – maybe tied to a specific individual or group (like a

spokesperson or agency who acts as a proxy for the organization). Some good story paradigms

follow these themes:

Overcoming Adversity (1033 helps a family when an officer dies in the line of duty)

Solving a problem (showing a problem our campaign will solve)

Creating Connection (show an impacted family)

Origin Story (narrative about riding along in a cop car in NYC)

Consider perks or thank you’s that are not monetary in value but offer some kind of intrinsic

value to a donor. (Thank you note from a cop, ride along with an officer, party hosted by 1033)

These campaigns are useful as one-offs or best employed infrequently, as donors may get fatigued from a heavy social media / marketing push for regular campaigns.