The State of Crowdfunding Non-Profits

Non-profits have been thrown in the spotlight recently with regards to crowdfunding due to the success of the many Hurricane Sandy campaigns. Now we face the question, “What’s next?” Was this a fluke, based on an emotional response multiplied by the “cool” factor of crowdfunding, or has it helped to uncover a new tool in the fundraising toolbox for non-profits large and small? We postulate that it is the latter, for a number of reasons.

First off, crowdfunding is comfortably situated to become a new piece of the much larger non-profit fundraising puzzle. It ties in quite intimately to the social media strategy that many non-profits already employ or are looking to add to their outreach strategy. Social media strategies should be used to leverage current outreach programs and accomplish specific goals–typically, cultivating relationships with supporters and prospects; building cause awareness; running online fundraising campaigns for specific projects–while connecting with new supporters, especially those of younger generations.

Crowdfunding helps to further these goals and provides an engaging conversion tool to capitalize on social media interest. How does this work? In short this achieved by employing crowdfunding tools for initiative-based fundraising architecture. With initiative-based fundraising, the engagement does not simply come in the form a Facebook “like” but also potentially a donation. In the overall fundraising landscape this is a bottom-of-the-pyramid tool that helps to build the base and bring in first-time donors. Crowdfunding is getting a lot of press lately, and as such it is a very sharable, eye-catching way of encouraging donations, especially from that coveted under-30 group. It allows those first-time donors to see themselves as part of a much larger crowd that is dedicated to a particular cause and campaign, which can encourage people to donate more often, thereby assisting in the stewarding process and building up that pyramid base.

Because it creates a connection not only to the organization but also to the crowd, crowdfunding works on a deeper level than a “donate” button on a single page, and in that way can encourage people to donate multiple times for multiple campaigns. Rather than a one-dimensional “Donate” button, people can explore the crowdfunding site and see the projects in more depth through video, text, and photos, while also being exposed to the other campaigns a specific non-profit is running. It builds out a vision of the non-profit and shows donors specifically what the organization is working on, creating a sense of depth and breadth not afforded by disperate “donate” or “fund” buttons interspersed throughout a site.

Finally, crowdfunding works for non-profits of many sizes. It has clearly worked for the Red Cross, but also can work on a much smaller scale. For example, organizations with the resources can create their own crowdfunding platform to fully exemplify their many projects and draw people in. Smaller organizations can begin with one or two campaigns within one site. For example, FHSSA–the Foundation for Hospices in Sub-Saharan Africa–has created their own crowdfunding page to complement their website and add specific projects people can donate to. This helps them gain funding and also shows exactly where the money donated to their organization goes.

A number of other sites have started, many working specifically for non-profits so the offerings are extensive enough to cover most needs. Here are a few examples of some of the most prominent and exciting sites starting in the space:

  • Fundly: Fundly uses what they call “social fundraising” to help non profits create fundraising campaigns, run by individuals or by teams
  • breaking off from traditional models of crowdfunding, has people give recurring micro-donations rather than one up-front sum
  • Kiva: Kiva was one of the first big names in the space. They do not do crowdfunding per se but act as a model for nonprofit donations, making a name for themselves through their micro-loan program
  • Launcht works as a Benefit Corporation, and is part of the mission to help social entrepreneurs improve their communities and their world
  • Razoo: Razoo limits itself to working specifically for social good causes and help both non-profits and individuals raise money

These are just the tip of the iceberg when it comes to non-profit giving. We expect to see more platforms and more campaigns as crowdfunding becomes increasingly integrated with social media outreach from big and small non-profits alike.

Launcht offers tailor made solutions allowing non-profits of any size to create branded crowdfunding portals to highlight the organizations initiatives and attract new doners.. If you are interested in creating your own platform for your non-profit, check out the Launcht white-label offering here.

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