Crowdfunding

From FundraiserWiki
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2. Crowdfunding
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“Crowdfunding” is a new name and new tools applied to an old style of fundraising, which is called peer-to-peer fundraising. Crowdfunding uses social media like Facebook, Twitter, Instagram, and e-mail to spread the news of your funding need. Websites like GoFundMe, KickStarter, and IndieGogo, exist to help you create a web page that tells your story and processes donations. The sites charge varying fees for helping you to do your fundraising.

The key to success with this kind of fundraising is building a ‘buzz’ around your fundraising campaign as quickly as possible and sustaining it until you reach your goal.

Here are a couple of tips to help you with your crowdfunding program:

Have a story to tell.

Crowdfunding relies on individual donors who decide to make a donation to your campaign. Emotion tends to be a more compelling motivator for this kind of giving than logic, so make sure that your story is something that will tug on the heart-strings. You are trying to stir emotions like compassion (oh, that’s terrible, let me give), excitement (wow, that’s super awesome, I want to give), or plain old affection (oh I love them, I want to help them). Don’t stretch the truth, however, because it’s dishonest and displeasing to God.

Spread the word.

Doing a crowdfunding campaign by yourself is a path to sorrow and disappointment. The word spreads when people share your campaign with others they know. The best way is to have a team of dedicated supporters who will commit to sharing with their networks regularly throughout the campaign, and encourage others to do the same.

You can also invest money in boosting your fundraising campaign on social media networks. I don’t have hard data on return on investment, but boosting the post will get your story in front of more eyeballs and translate into more donations. If you try boosting the post and don’t see a significant increase in traffic and donations, it might not be cost effective. If boosting brings in new gifts, it is cost effective as long as the value of the new donations is greater than the cost to boost. Start with a relatively small boost and experiment with cost effectiveness.

Set reasonable goals.

If you only have 200 Facebook friends, it’s unlikely that you’re going to be able to raise $200,000. You need to calculate the estimated size of your audience and realize that only a small portion (less than 5%) of those people are going to donate. If you have 300 friends and 10 are people who have similar size networks, it’s reasonable to set a goal of $2-5,000. A good way to estimate is to go to the crowd funding sites and look for comparable campaigns. If you see that $5,000 campaigns like yours usually have 3-500 shares, this becomes a target for you to aim at.

Thank your donors.

Make sure you find a way to thank your donors creatively. Remember, this is about building a relationship. One teacher I know had his students sign a thank you to every single one of their donors. The result? They were able to raise the same amount the next school year.

Ask again.

I think most people see crowd funding as a one time deal. Really you can ask a donor to give again after a decent interval if you can give them a reason. Don’t be afraid to do another campaign.

Invest in marketing.

A lot of people have invested a lot of time in the concept of "going viral," or getting enough people outside of your circle to share your fundraiser that people way outside your circle are reached. More and more, social media platforms are not so much communications platforms as they are advertising platforms. So if you expect to reach enough people to reach a large goal, plan on spending some serious money to reach them. This can make financial sense as long as your fundraising is cost effective.

Know when to upgrade your platform

If you’re going to be doing online fundraising on a very regular basis or for large amounts, it makes sense to pay for to have that ability in-house. If you’re raising $500,000, nearly $50,000 will go to the crowd funding site if you use them. It’s a worthwhile investment to put the money in for the online donation infrastructure you need. Crowd funding is a fine tool if you’re just starting out or don’t have the resources for a full-blown development effort. But you need to be prudent about when it’s time to start making use of professional level resources.

When you’ve reached this level, you’ll be setting up your own website tools that will do what the crowdfunding sites do for you. This means it should create items that are easily posted and shared on social networks, can be e-mailed, and track donations to a campaign. Team fundraising like this can be very effective because your most passionate fans will help encourage others to donate.