Crowdfunding for Not-for-profit Organizations

A step-by-step guide by Non Profit Growth (www.nonprofitgrowth.co.uk) NPG

Crowdfunding has become a popular tool for raising money but is it right for you and with so many crowdfunding websites out there which platform best fits what you need?

To help you decide here is a step-by-step guide to crowdfunding and how you can use it.

  1. Choose a project/funding focus

Firstly, choose a specific campaign with a clear outcome that people can support.

This can be a new project, capital or core running costs*. For example:

  • equipment
  • a vehicle
  • a service for the local community
  • a job
  • to mount an exhibition or performance   

*It’s worth nothing that if you are applying for core costs you need to be able to break these down into specific segments.

  • Who are your audience?

Think about this as you would any other fundraising or marketing project:

  • What kind of people are you aiming to reach?
  • Where do they live?
  • What social media/websites do they use?
  • Do you have volunteers or supporters that could help you reach them?
  • What is your Budget

You need to be crystal clear about how much money you want to raise, what it will be spent on and where it will be spent.

Remember your budget needs to include all costs of the campaign such as:

  • assets to design/create
  • staffing to run/manage campaign
  • rewards to donors if using the reward model (see ‘What kind of crowdfunding model should I use?’)         
  • Fees – all crowdfunding sites charge fees (see ‘What crowdfunding site should I choose?’)

  • How do I create my project pitch for the crowdfunder?

Each crowdfunding site has a set of tools to help you make your campaign page as successful as possible. Check out some of the successful pitches to see how they set their campaign pages up. 

Whatever site you choose you need to make sure you have prepared clear, concise copy that grabs your readers attention. This should include:

  • what your organisation needs the money for
  • the difference this will make to your community/group/users.

As with all fundraising material, this should be supported with images and (where possible) video(s).

  • What kind of crowdfunding model should I use? 

You need to decide what type of crowdfunding works best for your project. The 4 main types are:

  • Donations – your supporters donate small amounts towards a larger target with no benefits (other than feeling great that they have supported a worthy cause).
  • Rewards   – your supporters give towards a specific project in return for receiving a reward later. This is often used by commercial fundraisers. For example, raising funds to shoot a film where you can offer a walk-on part or invite to the premiere. If you are going to offer rewards make sure the costs are accounted for in your budget (see ‘What is your budget?’)
  • All or nothing – this can be donation or rewards based but you do not get any of the funds raised if you do not reach your target.
  • Keep it all – again this can be donation or rewards based and is the opposite of ‘all or nothing’. You keep any funds raised, regardless of target. **

Always check what models the crowdfunding sites you are considering use.

**Crowdfunding sites have systems in place if you do not use the money raised for the project stated. As with any form of fundraising it is vital you keep your donors informed of the project and any changes.

  • What crowdfunding site should I choose?

Which site is the best fit for your organisation, project, and model of crowdfunder you want to run?     

Other points that you should take into consideration:

  • Ease of use – check out the site and some of the campaigns before you sign up. If you find it difficult to navigate so will your donors.
  • Customer Support – what is available both to you running a campaign and to your audience who will be donating money.
  • Marketing – what support does the site have for spreading information about your campaign?
  • Fee Structure – these sites are not free (they need to make some money too).  Typically, crowdfunding platform fees can include a monthly membership cost and/or a processing fee for donations. This is usually around 2%-5% for charities and can include an additional cost per pledge. For example, 1.9% + 20p processing fee per donation. Remember to check the full fee structure and rules of the site and build these costs into your budget.
  • Your campaign is live

So, you are all set-up and ready to unleash your campaign!

This should be treated like the launch of any fundraising initiative. You need to coordinate a marketing campaign (on-line and off-line) to get people to your crowdfunding page and donating.

Let your supporters know when and where you are launching and that they need to ‘spread the word’ and share the campaign.

Aim to encourage your most loyal supporters to give right at the start. A positive news story along these lines makes others more likely to donate.

Throughout the campaign make sure you are updating your campaign page and getting stories out to your supporters and the groups you have targeted as likely to donate.

Work with your crowdfunding site on any marketing help they can provide -emails, socials, feature on the website etc. Most sites have guidance pages, blogs or tutorials that can help you make the most of their available features.

Have a plan of action ready for when the campaign is about to end. Lots of campaigns get surges of donations by promoting the campaign end date.

Finally remember to keep your supporters updated about the campaign from your planning to launch via progress, campaign end and showing them the difference, their donation has made.

Good Luck.

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