A crash course in crowdfunding
Crowdfunding is a major buzzword these days, especially in the non-profit space. There’s a good reason for this: it’s projected to become a $90 billion dollar industry by 2025 and 30% of that money will be directed toward charitable causes.
Despite this opportunity, I find that we non-profiters are generally fearful of crowdfunding because it is something new that we don’t understand. So, let’s take some time today and unpack the basics of crowdfunding. I’ll chat about what it is, talk more about why you should do it, and finally, share some tools that will help you crowdfund like a pro.
First, what is crowdfunding? It’s the process of raising money for a project or venture from a large number of people. This is typically done online and is based around a defined timeline. For example, you want to raise money to build a school in 6 months, so you create a crowdfunding campaign aimed at raising a certain dollar amount within that time.
Why crowdfund? Because more and more donor dollars are showing up there every day. If you don’t get the hang of this, you’ll risk losing out. Crowdfunding is great for highlighting a one-time project or need at your organization. It also serves the dual purpose of raising money AND awareness. For example, this campaign at a small non-profit serving homeless individuals raised $70,000 for a one-time project AND brought in a whole new crew of volunteers. Check out the video they used:
This is new to me, I’m scared! Don’t be. Yes it’s a new trend in giving, but once you go down this road, you’ll find that it’s very similar to donor drives you’re used to: make people part of something larger than themselves, tell a great story, and make the ask.
Okay, you’ve sold me. But where do I begin?
First, you need to choose a crowdfunding platform that best fits your campaign. There are lots of them out there and you don’t necessarily want to go with one just because it has tons of people. For example, Kickstarter has millions of people funding projects, but they don’t host many charitable campaigns and you get nothing if you don’t hit your donation goal. Indiegogo is more cause focused, but they take a high percentage of funds raised and the projects on there tend to be more about creating a physical product. GoFundMe has been a go to for charitable contributions in recent years, but their fees are quite high and they’ve had a number of fraudulent campaigns.
So, you need to sit down with your team and get very clear about how much you want to raise, who you’ll invite into the campaign, and how you want to reach them.
P.S. WonderWe is the only crowdfunding platform by and for non-profits. Our fees are the lowest, tools are the easiest to use, and you can access a social network of cause minded folks. You should check it out! 🙂
Once you’ve picked your platform, here are some tools to get you started:
First, there are three articles you should read:
National Council of Nonprofits Article
Those are the three best articles I’ve found to help understand the basics of crowdfunding. Here are the major takeaways:
- It’s important to get significant buy in from your tribe before you launch your campaign. Too many campaigns just launch without building a bunch of pre-launch buzz. Don’t let this happen to you, you have to get people jazzed about the campaign before it launches. To do that, you need to let all your stakeholders know about the campaign your planning, and encourage them to share with friends and family.
- People will donate to your campaign mainly for these reasons:
- Participation: They want to be part of something bigger than themselves.
- People: They care about and believe in the people running the campaign and want to support them.
- Purpose: They believe in the campaign’s goals and want to help move those goals forward.
- Perk: They want a reward in exchange for their contribution.
- Be careful offering physical ‘perks’ in a donation campaign. I know you may love the idea of giving a T-shirt to everyone who donates $25, but studies have actually shown that physical gifts lead to lower donations. However, it can be very helpful to come up with a non-physical gift. For example, donors could receive a letter from someone they helped or get their name on a donor wall.
- Tell a great story. This should be straightforward, but you’d be amazed at how many crowdfunding campaigns die because they fail to tell a compelling story that brings people into a movement. Your priority needs to be creating an emotional story that draws people in and concludes with a strong call to action. Let’s check some examples on this:
- Story of military vets in Chicago who help kids get home safe
- NY Times Invisible Child Series
- Check out this video from our local Big Brothers chapter:
- Deputize your volunteers and donors. These people already love your mission, so why not deputize them to help you with the campaign? Have them share it with friends, help you craft the story, and empower them to become a part of the change you’re creating.
- What about timing of your campaign? This depends on the type of campaign you’re running and what you want to raise money for. As a general rule, there’s no ‘right’ or ‘wrong’ time to run a campaign. It depends on the project you want to raise money for, what you know about your stakeholders, and the time your team has to execute.
Use the tips above to lay the foundation for a crowdfunding campaign and reap the benefits of the biggest thing to happen to donations since the internet.
