4 Reasons Every Nonprofit Should Consider Crowdfunding
By Josh Gold
Let’s talk about crowdfunding. Many organizations have been making it a big part – sometimes even the biggest part – of their fundraising efforts.
This change has had some pretty dramatic consequences. And as someone who invests a lot of time and creative energy in nonprofit growth and success, I have to say – I’m definitely a fan. There’s a lot to be excited about here.
If you haven’t added crowdfunding to your nonprofit toolkit, here are some reasons I’d consider giving it a shot:
1. Break out of old ruts
The whole enterprise comes with a sense of fresh possibility.
When an organization approaches me to make a video, I know I’m working against force of habit. Over time, both the NPO and its supporters have almost always developed patterns that can make it hard to break through. It’s like a play we’ve all been performing for years; everyone knows their lines too well. People know how much they gave last year and the year before, and they have that same number in mind for this year, too.
How do we increase support and encourage growth? That’s the constant challenge.
But this new format shakes the whole thing up. We aren’t making the same old case, so we don’t see the same conventional response.
Our ask is different, so the answer we get is different, too.
Not every organization is comfortable making this shift. Some are wary because online fundraising used to come with a stigma.
Consider, however, that it’s increasingly the norm. In fact, you’ll probably see increased engagement from millenials, who are comfortable in the digital world and, furthermore, have a different relationship with institutions, philanthropy, and technology than the previous generation.
Millennials are now at a stage in life where they’re beginning to give back. The current approaches weren’t designed with them in mind, so they may be less likely to, for example, attend a dinner, but that doesn’t mean they can’t become strong supporters – if you speak their language. They’re probably not well-established enough yet to contribute large amounts individually, but as a group, their good will adds up to quite a lot.
2. Convey a sense of urgency
There are a lot of fundraising techniques out there, and they all have their place. Crowdfunding is excellent at achieving one very particular dynamic: It puts on the pressure. When you put a number up on the board and start a countdown clock ticking, the call to action is immediate and insistent: Help put us over the finish line!
Suddenly, choosing how much to give takes on a new significance.
On some platforms, if you don’t reach your goal, all the donations are returned. That really raises the stakes. It makes the act of giving more vital and meaningful when every dollar is needed to guarantee the whole.
There’s also a popular donation-matching option, where every contribution is doubled, tripled or even quadrupled by big supporters. When even a small donation sends the total leaping upward, this empowers everyone to give whatever they can.
Which brings us to…
3. Forge stronger bonds
Philanthropy can be a pretty exclusive activity, even more so than you might think. Take the example of an annual dinner, which I brought up earlier. When I create a dinner video, I know that the audience is somewhat limited. Tickets are expensive, and there will be many community members who can’t afford to express their support with their attendance.
Crowdfunding opens up participation to everyone – and in this way, makes the cause itself more accessible. Suddenly, the organization belongs to anyone who can lend a few dollars or a hand to man the phones.
Given the opportunity to volunteer, students – to give one example – can feel that they have a voice, a sense of investment, and that their experiences of the day-to-day workings of the institution are being recognized.
While an honoree film might inspire a roomful of people at an event, if you get the ball rolling on a crowdfunding campaign, you don’t just deepen your pool of donations. You deepen your relationships with everyone: big donors and alumni, small donors and volunteers. You create a sense of unity and purpose.
Your cause isn’t an obligation levied on the wealthy. It’s a popular movement.
4. Get more for your investment
For some organizations, there are very good reasons to stick with your current approach. Maybe for you, a dinner really is the best way to show appreciation and reinforce relationships with key supporters. If you know that this is true, then that’s money well spent. I’ve certainly made videos for plenty of extremely successful campaigns of all different kinds.
On the other hand, if your usual campaign is taking a big chunk out of your budget, it’s worth asking whether you can get a better return on that investment with another approach. Crowdfunding is considerably less expensive than most and may in fact be a better fit for your supporters.
Even if you don’t choose to go with crowdfunding, it’s always a good idea to sit down and reevaluate your practices every once in a while. How did you settle on your current fundraising strategy? There’s a lot to learn from tradition, but are you looking forward, too?