Earlier this month, we were invited to join our local AFP chapter’s luncheon panel on nonprofit crowdfunding. Together with Tom Spencer, from I Live Here, I Give Here, Ann Starr, from Forklift Danceworks, and Lauren McPhail, from YMCA of Austin, we were honored to have Miriam Kagan led the discussion about this very hot topic in nonprofit fundraising.
Miriam kicked off the discussion with three things to know about crowdfunding, which can be found in Giving City Austin’s Crowdfunding for nonprofits, what works article. She focused on crowdfunding as an additional fundraising strategy that must be carefully considered, planned and executed. Fundraising fundamentals and best practices still apply to this rapidly evolving field. Successful campaigns must be developed in the context of understanding the relationship an organization has with its donors and community, the type of donors it may want to acquire and a solid plan to close the loop post-campaign. This strategy is designed to transition donors into a long-term relationship with the organization based on mission stickiness and understanding of impact.
Highlights from the panel discussion:
Why choose crowdfunding?
The panel dove right into a discussion about the most attractive crowdfunding benefits that made them decide to host an event. Some of these include:
- Leverages younger audience
- Gives you the opportunity to share stories through social media
- Connects donors with your organization by giving them the opportunity to give back by sharing your story
- Gives people a chance to feel like investors
- Enables ambassadors
Lauren mentioned that when YMCA of Austin started online giving, it accounted for 4% of their revenue. Now, it accounts for 25%. Combined with the incredible reach associated with these events, when you successfully engage the passion of fundraisers in events like giving days, you see success across the community.
The benefits realized post-event.
Tom, who recently hosted Amplify Austin, discussed how fun giving days are, calling them a “fest of giving back” for the community. He emphasized how giving days leverage the different strengths of the organization and the community, including, marketing, connections, younger audiences, media relations and local pride. He mentioned that there is no “silver bullet” for success, but that giving days are effective, have high impact and are a low-cost way to raise money. They enable you to do the things you want in your organization, and free up the time to focus on more important things.
Lauren mentioned that the biggest value to the YMCA of Austin was that giving days helped educate the community on who they were and gave donors a sense of urgency to participate.
Ann credited giving days for giving her organization a reason to celebrate with their donors during face-to-face events. She recommended leveraging your resources to get a good location and help create promotional videos. Another benefit Ann cited was the fact that crowdfunding does not have to happen only online—organizations can host launch parties, give people a place to bring checks to and/or have a phone bank. Lastly, she mentioned that these events are a place where loyal supporters will come to give additional gifts. Ann said, “It does seem to be a place where people chip in EXTRA. You are not taking funds from a different bucket.”
What about cannibalism?
Miriam emphasized that while some money may move around, in the end you will have more net dollars. “Organizations are hosting events repeatedly; if it were killing their bottom line, they wouldn’t keep doing it,” she concluded.
Lessons learned from overcoming crowdfunding challenges.
- You get out what you put in.
- Focus on the main goal—don’t get lost in the little things.
- Allow ample time to gather sponsorships, incentives and prize money.
- Questions will come up and clear communication is key; providing great FAQs, trainings and support can make an event run much more smoothly.
Additionally, although new donors are a major benefit of crowdfunding events, they also provide a challenge. During Amplify Austin, Tom mentioned that they had 46% new donors last year and 41% this year. Lauren said that they had 250 new donors. Taking care of these new donors and stewarding them is vital to the overall success of the campaign.
A final thought on crowdfunding.
“As a society we are evolving to online. The results are there, so it’s easy to see why crowdfunding is a great tool for your organization,” said Lauren.
We are excited to share more information with you as we continue to engage in discussions surrounding this topic and gain experience from what others have learned. With any new idea, there are challenges to overcome. Remember to add your feedback to our Crowdfunding Bill of Rights for nonprofits!