On May 6 of this year, Give Local America, a record-breaking online crowdfunding event, raised over $50 million for more than 7,000 nonprofits in just one day. Last year donors gave approximately $5 billion to crowdfunding projects (of which $1.5 billion went to social causes) according to Forbes magazine. So what’s next? Crowdfunding is estimated to be a $15 billion per year industry according to Tubestart.com. It’s not going away anytime soon.
As the potential of crowdfunding has exploded, so have the sites, platforms and methods organizations and supporters can use to raise money. As with all gold-rushes, too many organizations are jumping in without a clear understanding of the right strategies, technologies and partnerships that will make crowdfunding a long- term successful fundraising tool and a true engagement channel for nonprofits – not just a fad.
Some have already experienced crowdfunding landmines, with the most frustrating being platforms or sites that own, use and sell your donor data to others, don’t share donor data with you or force you to buy it (making it impossible or costly to build a longer-term relationship with supporters).
And of course, crowdfunding initiated by you on third-party sites requires the same resource investment that it would take to run a successful campaign on your own site, but doesn’t enable you to provide the full value proposition context that your site does.
The good news is that crowdfunding doesn’t have to be this way. Nonprofits can – and are – taking back fundraising in the crowd.
They are acquiring new funds and new high-value, lifetime donors and extending their brand, all while offering their supporters innovative ways to raise money on the charity’s behalf by engaging their friends and networks.
Why take the reigns?
It’s not just ownership of your data and control of your brand that should lead nonprofit organizations to take more direct control and oversight over crowdfunding. It’s also about reaching key demographics and encouraging supporters to engage with you on multiple channels.
Crowdfunding is always fun and engaging and often competitive for both Digital Natives (those born after technology was introduced) and Digital Immigrants (older individuals who have adopted technology). In fact, a recent study determined that for the first time ever, more Baby Boomers gave online than via direct mail in 2013. Online acquired supporters who give to and share your mission across multiple channels have higher retention rates and the highest lifetime value. Just the demographic you need to future-proof your mission.
Primarily an online peer-to-peer activity, crowdfunding participants crave a more self-directed way to engage with the causes they believe in while reaching out to their extensive friends, family and colleagues via social media and mobile. More channels provide more cross-channel engagement opportunities in order to build deeper donor relationships.
How Are Nonprofits Taking Control? Crowdfunding Success Stories
Nonprofits are taking back control by implementing single-day online crowdfunding events on their own sites. Community foundations and higher education institutions are leading the way in this area and there are many success stories.
With matching funds and a carefully planned marketing campaign heavy on social media and outreach to nonprofits, community foundations and community-based organizations of all sizes have raised millions. Communities Foundation of Texas has set the record for an individual event at $25.2M raised in 17 hour. The Community Foundation for Greater New Haven’s fourth annual giving day raised $755k in 2013, 126% more than the previous year.
Innovative higher education institutions are always looking for ways to increase revenue and student and alumni participation. Using college or program level giving days, “city challenges” for local alumni clubs or even inter- institution competitions, these campaigns appeal to younger alumni and drive major offline gifts from donors who view these campaigns as reflections of innovative thinking and direction at the institutional level. Here Columbia University has set the record with $7.8M in one day. Notre Dame Day, A Global Celebration, raised $918.5K this past April for The University of Notre Dame.
Show Me How: Proven Practices for Your Single-Day Crowdfunder
Now that you’re ready to take control, here are just a few excerpts from the Kimbia eBook: 21 Proven Practices for a Successful Single-Day Crowdfunding Event, available on the Free Fundraising Tools page at Kimbia.com.
1. Choose a model. Leverage the core aspects of your organization and mission. Below are just two of the many possible crowdfunding models for general nonprofits
- Chapter/affiliate: If you have local chapters or affiliates, a national giving day to show local affiliate “pride” is the perfect model for you. National matches can encourage local giving, and leaderboards foster competition, while data and funds can flow to each local organization or nationally – at your choice.
- Project/mission: If you support multiple projects within your community or around the globe, a project or mission based approach may be right foryou. The key in any project-based crowdfunding effort is to put donors in control with the ability to select from multiple, emotionally-attractive projects that both match their interests and that allow them to take pride in promoting the event to friends and family throughout their social network.
2. Plan for success. Driven by a sense of urgency, competition and incentives, crowdfunding campaigns are characterized by:
- Games, prizes, fun activities and videos that engage your target audience and bring them back next year
- Social media buzz as supporters in peer-to-peer fundraising mode share, tweet and like your campaig
n – taking it viral
3. Pick the right technology partner. The most successful crowdfunding events lead to
phenomenal fundraising results, long-term program growth and evolution, donor reactivation and engagement, and ultimately, mission impact. A great donor experience supports those goals.
Choose a platform, that:
- Extends your brand with online donation and registration forms and a real-time progress display on your website that is easily shareable (just cut and paste) on social media, partner sites and supporters’ personal webpages.
- Provides intuitive, hassle-free event, team and peer-to-peer functionality to help you increase participation and donation rates.
- Enables frictionless donations for the highest conversion rates in the industry. All forms should be mobile optimized and quick loading.
- Is stable and scalable. You don’t want your site to go down just when your donors are ready to follow through on the excitement you’ve built.
- Is internationalized with multi-currency capabilities so your supporters can share your campaign across continents as well as channels.
Download the eBook: 21 Proven Practice for a Successful Single-Day Crowdfunding Event to learn more.