PHOTO by Jaime Lopes of people raising their hands

Crowdfunding 101

Leveraging a Critical Mass of Supporters

I shared a previous blog about peer-to-peer fundraising.  Today, I will share some key insights about how crowdfunding is a different approach.

Crowdfunding started as an approach used by entrepreneurs to raise start up funds. Now, nonprofits are using the tool and it usually includes smaller donation amounts given by individuals. Basically, the campaign has a finish date and a specific financial goal. A purpose for the campaign is also provided and a link from the platform can be shared on social media and email messages. Donors can include messages of support and also share out the link to their circles.  Your nonprofit can keep all of your donors up-to-date by sharing messages, photos, and videos right on the platform dashboard.

Merchant Maverick assembled this list of popular crowdfunding platforms:

  • GoFundMe – The charities program will be ending December 31, 2021 but nonprofits can utilize their regular services.
  • Mightycause – Rebranded to serve small to mid-sized nonprofits and offers additional wrap-around services.
  • FundRazr – Holds the best reputation in the field and offers an assortment of resources.
  • Indiegogo – A popular platform for arts-oriented organizations and entrepreneurs.
  • Panorama – Also provides support for auctions and corporate partnerships.
  • Donorbox – Works with smaller nonprofits and includes a donation form pop up feature for your website.

The Council of Nonprofits recommends that organizations consider the following when it comes to using crowdfunding for fundraising efforts:

  • There are platforms that are geared to specific purposes: creative projects vs. nonprofit fundraising.
  • Platforms offer different fee structures. For example,  if you don’t reach your goal, you pay more while others don’t charge any kind of fee but you can’t get access to your donations unless you hit the goal.

According to Donorbox, use this criteria when considering crowdfunding for your fundraising:

  • Have a small staff;
  • Have a large audience of engaged followers on your social media channels;
  • Want to keep it simple;
  • Don’t have much time;
  • Have a moderate fundraising goal for a specific goal or campaign.

Here is a list of a few books about crowdfunding that may be excellent resources:

“With the emergence of social media, smartphones, and the web, opportunities for budding nonprofits are finally opening up. What were once tried and true methods to engage donors are quickly becoming archaic and ineffective. Believe it or not, you are living in the golden age of fundraising. A handful of nonprofits have caught on and are absolutely crushing it online. They’ve harnessed the power of technology to run massive online giving campaigns and reach thousands of supporters across the web.”

“This practical workbook takes the often overwhelming brave new world of crowdfunding and breaks it down into a step-by-step process, grounded in (memorable) theory-so working through the book not only helps you plan your first campaign, it builds a foundation for many successful, strategic campaigns to come.”

Be sure to confirm your state’s laws and regulations when it comes to using this kind of fundraising approach as some jurisdictions require that you register your nonprofit in order to fundraise. The National Council of Nonprofit recommends:

Charitable solicitation laws in most states do not specifically address solicitations via the internet or mobile technology, or crowdfunding – yet. Until they do, charitable nonprofits have the obligation to treat crowdfunding like any other fundraising activity – which means that charitable registration requirements in up to 39 states are likely.

In closing, another benefit of using this approach to fundraising is it will put your nonprofit in front of many other people who may not be aware of you – an excellent marketing tool to boot! As nonprofits wrestle with changes to technology and how donors connect with nonprofits, it is wise to keep an open mind to the assortment of opportunities to innovate how you fundraise.


Posted in Fundraising.