Crowdfunding might sound like a great way to raise money for a cause, but it not going to be a magic bullet for your nonprofit. While crowdfunding is one of the biggest fundraising ideas to come along in a while, it is not “set it and forget it” fundraising. You’re still going to have to do a lot of work.
The Power of Crowds
For effective crowdfunding you need – no surprise – a crowd. The crowd can include your friends, your family, business contacts, newsletter subscribers, Twitter followers and people you do not know, but there has to be a crowd. One of the biggest differences between crowdfunding and traditional fundraising is also that the size of the donations is smaller. Expect funding amounts to be about $25 each, and rarely larger than $100. With crowdfunding, you won’t be walking out of a multi-million dollar home holding a $10,000 check.
Another critical mindset for nonprofit crowdfunding is thinking in terms of projects. Many platforms, like Kickstarter, require you to frame your request of funding to be for a project, not a generalized cause. This is especially true of Kickstarter, which actually does not allow any charity or cause funding at all. You are either funding a specific, finite project, or you aren’t going to be using Kickstarter. While platforms like Indiegogo, Start Some Good, CauseVox and 33needs are much more tuned to charities, the principle of projects still works better, probably because it defines a finite goal and gives something a bit more concrete to promote.
Read the Fine Print
While all these platforms are tempting, be sure to read the terms of each site. Find out how much of a cut the website is going to take from your earnings. Also check how long it will take for the funds to get to your account, and how many payment methods are available. And because that crowd is so essential, make sure the website looks professional (would your Grandmother give money to this site?), has a strong web presence, and plenty of social media widgets and other ways for you to make a lot of noise. You want to be able to drive a lot of traffic to your crowdfunding page.
Social Media Blitz
This brings up the next big secret hurdle to earning crowdfunding dollars: You have to make some noise. How much attention you can get is almost directly proportional to how much money you will raise. Sometimes a great story does go viral on its own, but usually a crowdfunding effort takes planning and a long-term commitment to building an audience. This is when those 10,000 likes on Facebook are finally going to turn in cash.
You’ve Got 30 Days…
Yet another key difference between crowdfunding and regular fundraising is time. You won’t be doing an annual drive on your crowdfunding pages. Expect to put up a project, push a lot of attention on it, and then close it out all within about a month’s time (maybe two). Some charity-oriented platforms will be more flexible with this, but the shorter time frame is one of the broad differences to this kind of funding.
When To Get Your Own Crowdfunding Site
Of course, in its best form, crowdfunding would be done on your own website, without any middleman to take fees out or slow down processing time. Depending on the size and agility of your organization, having your own crowdfunding website might be ideal, or it might be biting off a bit more than you can chew. Many groups like to try a few crowdfunding experiments on outside platforms before they take the leap into buying crowdfunding software.