From Hollywood celebrities making passion projects to futuristic technology coming to life, you'd be hard pressed to find a single person these days who doesn't know, let alone hasn't participated in, at least some form of crowdfunding. First making waves in the mid 2000s, crowdfunding has been a go-to funding avenue for startups across the world for nearly a decade. Nowadays, crowdfunding has made its way into the non-profit world as well. Many non-profits find themselves piquing interest into this intriguing new world of funding, but do they really understand the difference between traditional fundraising and crowdfunding? Here are three quick tips on how to differentiate your traditional fundraising campaign from a crowdfunding campaign:
1. Every book has an ending
Traditional fundraising serves as ongoing agency support for your non-profit's operations, whereas a crowdfunding campaign is designed to provide support for a specific project or cause. All crowdfunding campaigns have a beginning, middle, and end. In the early days of crowdfunding (and still in many crowdfunding websites), fundraising goals needed to be met at 100% for funding to be delivered. The reason for this is that crowdfunding is designed to be centred around a specific goal, and this goal needs to either be met or not met. Don't make the mistake of trying to tie your ongoing program support to a crowdfunding campaign.
2. Using your donors wisely
Crowdfunding campaigns are a great way to cultivate a new demographic of donors with exposure to a new audience. While you will certainly wish to share your campaign with your current donors, instead of asking for their participation as a donor, consider asking for their advocacy and outreach. By using your established donors as communication channels, rather than funders, you increase your exposure to new prospects, while helping to prevent donor fatigue. Don't burn your donors out on small projects - save the ask for your operational support.
3. Paint a picture
The quickest way to tarnish your agency's reputation with a crowdfunding campaign is to not provide a follow-up to participants on their funded project or program. Crowdfunders are a different kind of donor - they want to see, touch, and feel their work in action. It's absolutely vital to any crowdfunding campaign to provide follow-up on how dollars are spent, as well as progress updates. While your traditional donors have established a level of trust with your agency and their donation dollars, many of your crowdfunders will be new and looking to see their results. By showing smaller campaign successes, you work to begin building trust and start your crowdfunders on the way to longterm traditional donors.
As of 2015, close to one-third of all crowdfunding goes towards non-profit and social ventures. Don't underestimate this amazing tool for your non-profit!
Check out the infographic below for more details:
[Image courtesy of: http://imgur.com/2SwAn1H]