Nonprofits today rely on more than just traditional fundraising techniques to raise much-needed funds. Technology has truly brought about some fantastic options for fundraising.
Yes, bulk mailings, in-person special events, and face-to-face donor cultivation are still important and highly likely to bring in a consistent stream of donations year after year. However, fundraising is not limited to these methods.
Crowdfunding has recently taken the fundraising world by storm. Instead of relying on a handful of loyal donors making large monetary donations, crowdfunding asks that many people pool their money in order to support the efforts of a person or organization.
Not only is the money acquired from a vast network of donors, but a majority of the work is done through the internet.
Crowdfunding is a great way to fund a special project or initiative, but it may not be a reliable long-term solution for every organization. To see if crowdfunding is right for your nonprofit, ask yourself the following questions.
How Will Reaching Your Goal Further Your Mission?
Crowdfunding works best when there is a specific project that your nonprofit needs funded in a certain period of time. This is not the best platform for long-term giving campaigns.
Just look at OutCycling. This nonprofit provides scholarships for at-risk LGBTQ youth located in New York City through their Fearless Flyers program.
They raise funds that cover overhead through outside avenues (private donations and membership fees) so that all public crowdfunded dollars go directly to programming costs. The Fearless Flyers have their operations covered, so donors are collectively funding a 10-week participant experience.
If you are looking to organize a crowdfunding campaign for your nonprofit, figure out exactly how you want to capitalize on the exposure. You can fund a program like Fearless Flyers, or you may need a different type of support such as help covering building repair costs.
When setting any goal, keep in mind that it must be measurable, attainable, and timely. And, most importantly, the goal for your crowdfunding campaign must work to fulfill your nonprofit’s mission.
What Will Be The Total Campaign Cost?
Fundraising costs money and your nonprofit must be ready to handle the upfront costs.
The good news is that crowdfunding is oftentimes less expensive than traditional fundraising methods like mailings and special events.
However, there are multiple factors to keep in mind.
Consider the amount of time your staff will be spending organizing the campaign, perfecting your story, sharing the campaign, following up with donors, and reporting the results. Just like other fundraising techniques, staff will be using precious time to manage the process.
Factor in the cost of using a crowdfunding platform like CauseVox and consider incorporating those costs into your overall goal.
Also, costs of promotional materials such as videos and special photography are likely to add up.
Lastly, reconsider using tangible rewards in your campaign. Though these rewards may be appealing to some donors, your nonprofit will have to foot the bill for the product, the shipping, as well as the management of the rewards.
Instead, recognize donors with intangible rewards on social media and through emails, making sure you let them know the impact that they’re creating.
Does Crowdfunding Fit Into The Overall Fundraising Strategy?
Every successful nonprofit knows that they need a diverse and fluid income stream, and crowdfunding should be just one aspect of the overall fundraising strategy.
Ideally, your nonprofit should use a mix of foundations, private and public grants, large donations, and small donations. Many nonprofits look at crowdfunding as a way to bring in those large and small individual donations.
Crowdfunding is an exceptional way to reach donors that your organization would otherwise not reach through traditional fundraising techniques, including younger donors, those with limited financial means, and the expansive networks of your current donor base.
Do You Have A Compelling Story to Share?
You’ve heard time and time again that a good story will either make or break your crowdfunding campaign.
Yes, you do need a good story. It needs to be informative, genuine, truthful, and persuasive. It also needs to make your audience feel responsible for donating.
This is easier said than done. First you must find the right story to tell that fits in with your goal. Once you have this, it is time to decide whether it is best shared through video, pictures or a written story.
Check out this amazing video by Project Renewal. This is a perfect example of a compelling story. The audience learns about the mission of the organization, the problem, and how they can be part of the solution.
Your story doesn’t have to be an elaborate, high-quality production. It just needs to leave the potential donor feeling compelled to act. And, once they act, a donor is much more likely to share your campaign with others.
Always remember that many of the donations you receive through crowdfunding efforts are linked to relationships your organization already has with donors, staff, and volunteers.
Are You Comfortable With Social Media?
Crowdfunding heavily involves campaigning on the internet through social media and other networking outlets.
Therefore, it is essential that someone on your nonprofit’s team is capable of handling social media accounts and email lists. Also, it is very helpful if they are also knowledgeable enough to coach other campaign participants interested in sharing the campaign.
But, social media shouldn’t scare you. It’s actually a great tool to aid in your organization’s growth. Access to social media gives nonprofits a front-row seat to an expansive audience for your crowdfunding campaign, as well as other engagement opportunities.
Have You Considered Your Retention Strategy?
Donor retention is resource development topic that constantly needs to be top-of-mind when campaigning.
According to the Fundraising Effectiveness Project, only 19% of first-time donors decide to make a repeat donation to your cause. However, 63% of repeat donors are retained.
What does this mean for your crowdfunding campaign?
It means that you have to work extra-hard to retain your donors because their income is likely to remain consistent. To ensure retention, follow the tried-and-true donor cycle of asking, thanking, and reporting results.
Once your nonprofit receives a donation, it is important to do the following:
- Send a personalized thank you (an automatic feature of CauseVox)
- Compile all pertinent donor information for your organization’s records. Include:
- Age (if appropriate)
- Email address
- Any other demographic information important to your nonprofit
- Request that the donor shares the campaign with their network
On the same note, donor engagement has a direct impact on retention. Consider recording a thank you video, inviting donors to an event, or simply just asking them to sign up for your newsletter. Donors that feel appreciated and engaged are likely to stay involved with your nonprofit.
Nonprofits around the world have found that crowdfunding is a great way to bring a large pool of donations together to make a big impact in a community. Consider adding a crowdfunding campaign to your overall fundraising strategy and, with the right tools and forethought, you are bound to see positive results.
For more information on types of crowdfunding, best practices, and storytelling basics, download The Power of One+Many: Individual and Team Fundraising.