Staring a Crowdfunding – 5 key things to consider

Starting a crowdfunding, which is (usually) raising money to finance an initiative through donors, can be a powerful tool in the social sector. Organizations have used it to raise money to bring back kidnapped children, provide emergency relief after a hurricane took place, or to pay for medical treatments in the past.

Starting a crowdfunding project can help non-profit Organization’s with establishing meaningful involvement, providing information about the work they do, spreading of their message, and increasing the number of donors to improve their financial situation and overall impact if used strategically.

Crowdfunding is still a relatively new concept and many non-profit Organizations have the same questions when they start to think of starting a crowdfunding campaign. We listed some of the most frequently asked questions for you here:

1. Should my organization set up a crowdfunding campaign? 


We’re not going to lie, setting up a crowdfunding campaign is difficult and time-consuming. If you want to do it well really the whole organisation should be behind it and involved in it to create the momentum you need to be successful. Non-profit Organizations can’t just run any crowdfunding campaign, it has to portray the vision and mission of the organisation and it needs to get the approval of all people involved in the organisation before the campaign starts. Bear in mind donors are more inclined to donate to campaigns that look successful. Therefore, build in early victories in your campaign. This means you should make sure your existing donors are on board in the early stages. You can do this through:
Building a foundation: start socialising with your existing network a few weeks before the launch of your crowdfunding campaign. Also appoint a chair and committee for your campaign team. This will help them feel and take responsibility for successes of the campaign.
set yourself a realistic target: aim to achieve 30% of your target within the first 48 hours through your existing network. Don’t post anything on social media or launch any new promotion until you have achieved that 30%.

The University of Virginia’s Rotunda Ball campaign is a fantastic example of a crowdfunding campaign that hit the ground running. This campaign was launched just with friends and family of the team and already exceeded one-third of the target before it was even shared with the members of Rotunda Ball. They raised an amazing total of $22.000 through the crowdfunding campaign. It was set up to raise money for the restoration of the historical UVA Rotunda. This is a 200-year-old building designed by Thomas Jefferson as library at the heart of the university.

2. What is the role of existing donors?

 

Existing donors can do so much more than just be one of the first donors to a crowdfunding campaign. You can use the network of your current donors to engage with more people which will increase their value as your donors. Don’t underestimate existing donors. Their commitment and funding show the value of your organisation which will make it easier to attract new donors as they will value your existing donors’ opinion and choices.Parkinson’s Institute and Clinical Center’s recent campaign is a great example of how to strengthen current donations through crowdfunding. This organisation asked Bill Draper, who is a donor and well-known venture capitalist provider, to make his yearly crowdfunding  campaign donation public. Whilst he did this he also promised to double every $100.000 donation (match funding). The Parkinson’s institute also asked the entire Draper family to share their stories of living with Parkinson through a video. The videos all targeted a different audience and were placed on the campaign’s website.

The campaign was launched on #GivingTuesday and raised more than $200.000 in 4 days’ time. As if this wasn’t enough yet this success inspired another board member to also double donations which led to the campaign ending with an incredible amount of $550.000. This was funded by more than 450 donors.

4. How can I motivate new donors to give money through    crowdfunding?

 

Although every campaign and every donor are unique, there seem to be four key factors which make someone decide whether or not to join a crowdfunding fundraising campaign. These are:
– Participation: they want to be part of something that is bigger than themselves.
– People: they care about and believe in the people who are leading the campaign and want to support them.
– Target: they believe in the target and aim of the campaign and want to help them achieve it.
– Nice little extra: they want a reward in exchange for their support.

Every successful campaign uses these four points to a certain extent. An amazing example is App Camp for Girls which is a campaign to raise money for a new non-profit camp in Portland. This non-profit camp offers girls a place where they can brainstorm, design, and build with iPhone apps. In only 3 days App Camp reached its target of $50.000 because they focussed on the cause and getting donors involved. As the team realised they needed a bigger camp site because interest was bigger than anticipated, they asked their donors for suggestions for locations. This really got the donors involved and motivated them to give to the campaign. At the end the campaign raised more than $106.000 through more than 1.000 people.

4. Does crowdfunding have any other benefits besides raising money?

 

Crowdfunding offers non-profit Organization’s the opportunity to get support in a variety of ways and from a variety of people. From beneficiaries, to donors, board members, and employees. Crowdfunding also offers you the opportunity to find out what motivates different groups of people to take part. Moreover, it offers you the opportunity to be in direct contact with the donors and to talk to them about the positive impact their donations are making. More and more non-profit Organization’s also use successful crowdfunding campaigns as case studies when they are pitching their Organization’s with philanthropists and other Organization’s for bigger donations.Take Save the Children. They recently organised a crowdfunding campaign and got a YouTube celebrity involved. This opened up a completely new and younger network for them of people who practically live on social media and who are comfortable with online transactions. This led to PewDiePie campaign raising more than $340.000 through more than 6.000 donors to support Save the Children. This helped them to give children a place to stay, clothing, and schoolbooks.

5. Crowdfunding… how to start?

 

It doesn’t matter whether you’re a new organisation or expanding on existing programmes, you can start a crowdfunding campaign at any stage of the business lifecycle. However, it’s important to make sure you put time and effort into the campaign and to set yourself realistic goals.Running a successful crowdfunding campaign means you need to prepare well. You as non-profit organisation can do the following to make sure you’re well prepared:
– Make use of free sources such as Whydonate’s Crowdfunding Manual.
– Talk to other non-profit Organizations who have already run successful crowdfunding campaigns.
– Set up a concept-campaign and share it with crowdfunding Organization’s such as Whydonate, Indiegogo, Crowdrise, and Causes to get their opinion on it before you go live.
Crowdfunding isn’t a quick fix to the funding problem the social sector is facing. But it is an increasingly important part of the fundraising kit as it helps non-profit Organization’s to make connections and to source support.

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