Crowdfunding

What Is Crowdfunding for Nonprofits?

Like the name suggests, crowdfunding is when a group of people (a crowd) contributes an amount of money (funding) on behalf of a cause or an organization. This group of people is usually brought together in person or through the Internet by an individual, also known as the crowdfunder or social fundraiser.

How Do Nonprofits Use Crowdfunding?

The more funds nonprofit organizations bring in, the more people it can serve. Crowdfunding allows nonprofits to raise donations from a larger audience without hiring more people to its development team. In fact, individuals not directly affiliated with nonprofits can and do leverage crowdfunding strategies on behalf of nonprofits every day. Utilizing crowdfunding strategies also tells supporters that your organization is savvy to the latest donor engagement strategies and technological advances. It’s another way to invite supporters to help nonprofits carry out their missions.

There are two specific ways organizations can benefit from crowdfunding efforts:

1. Crowdfunding Through Social Networking Platforms

Organizations and individuals alike can rally donors on social networking platforms like Facebook, which allows its users to add donate buttons to their profile pages so their followers can contribute donations to their organization of choice. The nonprofit organization gets donations, the social networking site user gets peer interaction and generates goodwill, and users never have to leave Facebook, improving their overall engagement. In addition to Facebook, Instagram now offers an option for organizations to add a donate button to their profile, as well as letting individual users add a donation sticker to their Instagram stories to solicit donations on behalf of an organization.

2. Text-To-Give Campaigns

Also known as text-to-donate campaigns, this strategy capitalizes on the pervasiveness of mobile phones and is touted as one of the most effective ways for nonprofits to raise money for their causes. Users text a phrase or keyword to a specific number. Then, the cell phone user will receive a link to a donation page for the organization. An example of this is texting REDCROSS to 90999, which will allow individuals to donate to the American Red Cross Disaster Relief.

Examples of Crowdfunding Campaigns

Crowdfunding campaigns come in all shapes and sizes and can be used for all types of causes. The most effective crowdfunding campaigns will connect to their audience on an emotional level and express their goal clearly. Below are some examples of effective crowdfunding campaigns.

From Pregnancy to Infancy

From Pregnancy to Infancy is a crowdfunding campaign run by nonprofit organization Amurtel, which supports refugee mothers and babies in Greece. From Pregnancy to Infancy used the first line of their campaign page to hook potential donors by asking them to consider the plight of a refugee mother who has just given birth:

“Can you imagine giving birth to your baby and returning from the hospital to a tent pitched on concrete in the summer heat?”

This campaign sent a clear message that resonated with its audience and led them to raise $11,000– $1,000 over their initial goal.

Back the Badge Michigan

Back the Badge Michigan used crowdfunding to raise over $3,000 during a recent fundraising campaign. Back the Badge Michigan made their goal clear and specific: raise money to supply K9 police officers in Michigan with the equipment they need to stay safe. Michiganders knew exactly where and to whom their money would be going (thanks to the clear and concise information provided by Back the Badge Michigan), giving them the confidence they needed in order to make a donation.

Examples of Crowdfunding Platforms

HandBid

HandBid is an online fundraising software with many capabilities, including social fundraising capabilities like crowdfunding. HandBid is a great solution for organizations that are also interested in other fundraising tools like online auctions, peer-to-peer fundraising, and text-to-give.

More on HandBid

GoFundMe Charity

GoFundMe is one of the biggest names in crowdfunding. Not only do users get access to all of the benefits of the world’s largest social fundraising platform, but they also get tools like donation buttons and event registration.

More on GoFundMe Charity

Classy

Classy is the number one online and mobile fundraising platform. They empower nonprofits to tell their stories and motivate donors to give through crowdfunding, peer-to-peer fundraising, events, and more.

More on Classy

Bottom Line

Crowdfunding is a term used to describe the process of an individual raising money on behalf of an organization by soliciting donations from their friends and peers.

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