How To Do Crowdfunding for Nonprofits

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The internet has created a whole new world where we can interact with each other. I can easily keep in contact with friends and family, while simultaneously checking my banking statements and watching cute cat videos (the real reason the internet was invented).

Crowdfunding for Nonprofits

As for nonprofits, the internet has opened up new opportunities for fundraising, especially in the realm of crowdfunding.

Websites like Kickstarter and Indiegogo have revolutionized the process of raising funds for projects, businesses, and charity causes by appealing to a wide range of audiences. By setting up a campaign on a crowdfunding site, you are targeting not just your followers, but others across the internet to donate and make your goals a reality.

Crowdfunding will not only help your nonprofit make significant strides in fundraising, but will aid in brand awareness as well. It is a fundraising platform that your nonprofit cannot afford to ignore.

Here is your step-by-step guide to crowdfunding for nonprofits.

1. Mind the laws!

Just like every other form of fundraising, the government regulates every dollar you collect. So before you begin your crowdfunding campaign, be sure to check which federal and state laws apply to your campaign.

Fundraising in multiple states and using a platform based in a state other than your own means you will be dealing with regulations across state lines. Luckily, according to the National Council of Nonprofits, most states have not addressed solicitations regarding mobile fundraising or crowdfunding… yet.

Bottom line is that you should treat your crowdfunding campaign just like you would with any other fundraising initiative. Be sure to run all possible scenarios through some sort of lawyer or other legal filter to make sure you aren’t facing any run-ins with the law.

2. Choose a crowdfunding site that works for you

Although all crowdfunding sites have a similar goal, they don’t all have the same functionality or features. Kickstarter requires a video to make a successful fundraising campaign, while other sites such as Fundraise.com don’t have such a requirement.

In terms of initial accessibility, platforms such as Indiegogo are much more relaxed in their application process, versus that of Kickstarter which has a rigorous rules and application process. On the flipside, Kickstarter has the name recognition that can put it ahead of its competitors, but name recognition comes at a price.

Kickstarter also charges a 5% commission on the total amount raised, which other crowdfunding platforms have embraced to varying degrees. Some platforms charge a smaller commission, such as Razoo which charges 4.9%, but attaches a 2% processing fee on top of it.

If you are willing to forego some name recognition for a free service, Causes can provide with an ad-based revenue platform dedicated to nonprofit/charity fundraising, petitioning, and organizing campaigns.

Whether you reach your goal matters as well, since some platforms charge a higher fee for goals not obtained. Kickstarter doesn’t charge for campaigns that are not successful, however they have an “all-or-nothing” system, which gives you nothing if your goal is not reached. This can also act as a motivator to make sure you reach your goal in the allotted time.

3. Create a compelling campaign

Just like when you write a novel, building your campaign should focus on hooking your potential donors with a compelling opening and story that will motivate them to give to your cause.

Whether you do that through pictures, video, or a written out explanation, your campaign should include the who, the what, the where, and the why for your initiative. Your explanation should include your initiative and fundraising goals, which should be set realistically. If you have a week to raise funds, perhaps $500,000 isn’t the most realistic goal to set.

4. Get the word out!

Unfortunately, you can’t set up your crowdfunding effort and simply leave it to accumulate thousands of dollars on its own, as awesome as that would be. Spreading the word about your campaign is crucial to it catching fire and reaching your goals.

For starters, a marketing campaign should always begin with your own network of members and previous donors. Email campaigns can be perfect for letting your current members know about your new crowdfunding effort.

Sharing your campaign on Facebook, Twitter, LinkedIn, Instagram, and any other social media platform can help. Blogging and producing other forms of content boosts the visibility of your campaign. There are also many different unique content marketing strategies that have been used by nonprofits to pull donors and awareness to their campaigns, such as Tinder profiles and Instagram albums.

In addition to running your campaign through the social media wringer, you should also consider pitching your campaign to big names related to your cause and other nonprofit influencers. Pitching your campaign to nonprofit bloggers and journalists can increase its visibility and give it the weight of an established authority. Email bloggers and write letters to the editor. Point is, it never hurts to ask!

Conclusion

Once all of these steps have been completed, you will be riding high on a successful crowdfunding campaign!

Have you ever used crowdfunding to set off a campaign at your nonprofit? What were some obstacles you had to overcome? What were its successes? Let us know in the comments below!

Looking for Nonprofit software? Check out Capterra's list of the best Nonprofit software solutions.

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Nick Morpus

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Nick Morpus is a former Capterra analyst.

Comments

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A great and informative article for us as a non-profit organisation in Bali, Indonesia. Begawan Foundation, breeding and releasing the critically endangered Bali Starling, relies on donations and grants for all its programs. It is therefore important for us to always look for any possible fundings from supporters, not only locally in Bali but also worldwide. Crowdfunding can be a good way to fundraise yet it is not easy to raise the required funds unless you present an inviting case. It is not only a compelling campaign that you need to present – what are funders interested in supporting? At the very least when we don’t achieve our funding goals, we ensure that more people recognise the existence of our organisation or the cause itself.

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