The “What’s,” “Why’s” and “When’s” of Crowdfunding

July 25, 2014


Crowdfunding is becoming an increasingly popular tool in the social sector. It’s clear why, too. By collecting donations from supporters, campaigns of all sizes can grow funds, awareness and momentum. But while crowdfunding may be the future of fundraising, many nonprofits are uncertain about how to use this strategy in their campaigns.

That’s where Purpose’s Strategy Director, Erin Gore, can help. Erin is no stranger to the social sector, with experience in youth services, philanthropy, education, advocacy and veterans’ issues. In a piece she recently co-wrote in the Stanford Social Innovation Review with Breanna DiGiammarino, a Cause Director at Indiegogo, Erin draws on her expertise to answer five common questions nonprofits face when considering crowdfunding.

When should my organization run a crowdfunding campaign?

Crowdfunding is a building tool, not a foundation. Erin warns against using crowdfunding to kick off a campaign, instead advocating for targeting an existing network first. She recommends giving campaigns a pre-launch socialization period, appointing a host committee to a campaign team and setting a realistic fundraising goal. She believes the key is to refrain from targeting a new audience before 30 percent of the campaign’s goal has already been funded by current donors. 

What role should existing donors play?

Beyond funding, existing donors contribute to a campaign’s credibility and prominence. Their support attracts new audiences and encourages donors within their personal networks to get involved. 

How can I motivate new donors to give via crowdfunding?

Erin believes people contribute to a campaign for four reasons. Donors believe in the campaign’s goals, trust in the people running the campaign, seek involvement in something bigger than themselves and expect a reward in return. Erin suggests integrating each of the motivating factors into a campaign to garner support.

Are there benefits to crowdfunding beyond raising money?

Crowdfunding broadens outreach and provides opportunities to test what motivates diverse groups to donate. It facilitates communication, allowing campaigners and donors to connect over the positive impact of donations. Erin believes that successful crowdfunding campaigns also demonstrate demand to foundations and philanthropists.

How do I get started with a crowdfunding campaign?

To get started, Erin suggests tapping into resources like Indiegogo’s Campaign Field Guide and Cause Handbook or speaking to nonprofits that have run successful crowdfunding campaigns such as the Parkinson’s Institute and Clinical Center or Save the Children. Crowdfunding organizations such as IndiegogoCrowdrise and Causes offer feedback on campaign drafts.

New ventures, growing programs and established organizations can all benefit from crowdfunding, as long as time and effort are invested. Nonprofits that reap the most out of this tool focus on doing their homework and achieving attainable goals.

Crowdfunding isn’t a quick fix, but when employed correctly, it can vitalize campaigns and lead to powerful and successful social change.

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