Over the past few years, crowdfunding has taken the fundraising world by storm. According to Forbes magazine, in 2013 crowdfunding efforts brought in $5.1 billion worldwide. That number is astounding, although it is certainly not all charitable, but it does give us a glimpse into the potential for driving nonprofit revenue by capitalizing on crowdfunding momentum.
Like most people, you’ve probably already heard the term “crowdfunding,” but for clarity’s sake we define crowdfunding, or peer-to-peer fundraising, as the act of funding a project or event through a large collection of donations gathered through crowdsourcing via the internet. Although the end goal is similar to more traditional fundraising tactics, crowdfunding involves a different process that can be wildly successful with the right technology, some careful planning, and deliberate execution.
Nonprofit crowdfunding is perceived as more hands-off than planning something like an annual auction or donor luncheon, and depending on the campaign, that can certainly be the case. However, to ensure a successful campaign, crowdfunding shouldn’t be left to fend for itself, although you don’t have to reinvent the wheel. Best practices are starting to emerge from the thousands of campaigns we see each month. It still takes smart planning to run a successful campaign, but there are numerous practices an organization can employ in order to see their desired results.
Below you’ll find three best practices (plus an extra tip) for nonprofit crowdfunding that we recommend.
These best practices should help you get started, but they’re just that: a start. There are plenty of additional excellent crowdfunding tips out there. You’ll find yourself building out your systems and methodologies with the more campaigns you complete, so don’t forget to track and evaluate your results.
For now, let’s begin with these.
1. Find the Right Platform
There is no shortage of crowdfunding sites, that’s for sure, but ideally you want a platform that has experience with nonprofit organizations and their unique needs. Most cater to individuals raising money for entrepreneurial ventures, medical bills, or memorials. A crowdfunding site like Fundly has years of experience serving nonprofits large and small. A few other notable things to consider:
- Does the platform allow for tiered pricing depending on funds raised? In other words, the more donations you raise, the lower your fees?
- Does it allow you to offer a donation benefit such as a t-shirt?
- How easy is it for you and your supporters to not only share campaigns through social media but integrate a Donate button to your Facebook page?
2. Draft Your Team
By definition, crowdfunding is a group effort, and I have seen this in action. The most successful campaigns rely on an initial network of supporters to spread the word and recruit a much larger selection of people. Conduct a prospect screening if you’re unsure of who should be in that initial network.
We recommend drafting three groups of participants at the start of a peer-to-peer fundraising campaign:
- Fundraisers: These participants will be active members of your supporter base. At the start of the campaign they’ll set up their own fundraising pages on behalf of the crowdfunding effort. They get the ball rolling with donations and contribution expansion.
- Marketers: These are supporters who are willing to step up and spread the word. They’re engaged in your organization and active on social media. If you want your campaign to stand any chance of going viral, choose your marketers wisely.
- Donors: Make sure to tap into those who are active on social media.
3. Craft Your Story. Spread the Word.
We’ve all heard the expression “elevator pitch” when it comes to selling yourself in, for instance, a job interview. Well, your campaign needs the best elevator pitch possible to acquire those new supporters and donors. When crafting your story, contemplate what you could say that would move a prospect to donate.
We’re culturally predisposed to think in terms of stories, and we each view our own life in traditional narrative arcs. Tap into that predisposition and tell stories in a format that people will instantly recognize, like a “David and Goliath” tale or a “rags to riches” saga. Then make sure that those stories are visible. The crowdfunding platform you choose should make it easy for maximum socialization of your campaign. For instance, Fundly, the crowdfunding platform that is now available through Innovairre MC, offers a terrific widget that allows you to add a Donate button to your Facebook page so that you don’t have to send a donor to another site.
Whether sharing via social media, email, or by adding photos and videos to your campaign page, prospects are more likely to be driven to donate if you can tap into their emotion and empathy. Focusing too much on a broad explanation of your organization’s mission will not move donors or make it likely that they will share it with their friends and family.
4. Practice Good Donor Stewardship
Yes, the headline says, “3 Best Practices…,” but if you’ve read this far, consider it your reward. For this final recommendation, I want to focus on the acknowledgment: an area of campaign planning that is often overshadowed by seemingly more pressing concerns. Even when executing a crowdfunding or peer-to-peer campaign, acknowledging the donor must be one of your top priorities.
Let’s talk about donor acknowledgment. A general best practice for nonprofits is the mantra, “thank more than you ask,” or in other words, implement a 2:1 thank-to-ask ratio.
As soon as donors submit their funds through your peer-to-peer fundraising platform, they should receive an automated email thank you that fulfills another fundraising best practice – that of immediate gratitude. An additional follow-up acknowledgment is your chance to stand out as an organization.
You could send out an additional thank you:
- on social media
- within a video
- on a mass list within a newsletter
- or by direct mail
Due to its inherent ability to self-regulate and grow on its own through social media, the peer-to-peer campaign allows you to reach new pools of donors you never could have imagined without it. You don’t want those new supporters to stop at one donation; get them on board for the long haul with great stewardship. That stewardship can and should start with a simple thank you.
Crowdfunding is steadily increasing its presence in the mainstream nonprofit market. Does that mean you’re going to ditch more traditional methods like events or direct mail? Not at all. With few exceptions, a sustainable fundraising strategy includes different methods of outreach – and all have a place in the fundraising ecosystem. Nonprofit crowdfunding is the latest in the continuum of technology innovation for the charitable giving world – and probably one of the most cost-effective to implement in the short term. With billions of dollars being raised through crowdfunding platforms, it would be wise to capitalize on best practices, put some supporter muscle into your campaign through social media, and make it happen!
Gretchen Barry is the Director of Marketing and Communications for NonProfitEasy and a guest contributor to Innovairre Communications, which supports more than 500 nonprofit organizations around the world. For more information about crowdfunding and NPO fundraising campaign management, contact us at Answers@Innovairre.com. Follow us on LinkedIn and Twitter.