The term crowdfunding is relatively new, but the concept is not. Crowdfunding occurs when large groups of people pool their donations to support a cause or organization.
Crowdfunding is not unlike the traditional approach of sponsoring events (e.g., walks and runs) to raise funds and awareness. The Internet and social media have just put a new spin on group fundraising, but there’s more to it than just setting up a web page.
Set a Goal
First of all, crowdfunding is not effective for ongoing fundraising or annual appeals. It is most effective when you want to fund a certain project or reach a specific goal. Ideally, you should set a measurable goal that is achievable and aspirational.
Promote Your Campaign
Plan to reach out to your community (board members, staff, volunteers, and donors) with information about the campaign and a link to your crowdfunding web page. Encourage them to circulate the information and link to their contacts. Promote your campaign via social media (e.g., Facebook, LinkedIn, and Twitter) and encourage donors to do the same.
The Rewards Conundrum
It’s common practice to provide rewards for donations to crowdfunding campaigns outside the nonprofit world. Generally, the more generous the donation, the more substantive the reward. But rewards can have the opposite effect for crowdfunded nonprofit campaigns. If you do provide rewards, choose items offering tangible evidence donor funding is having a positive effect.
Social media and the Internet are expanding crowdfunding opportunities for nonprofits. And although it isn’t right for every organization, it may be worth considering.