The non-profit guide to successful crowdfunding

If you’re reading this, chances are you’re already familiar with some of the obstacles non-profit and NGO organizations are facing today. There is a consistent push towards social innovation, social enterprise and alternative fundraising methods – coming from all corners of the stakeholder universe. While their definitions are still firming up, one thing is clear: Funding is a consistent challenge for many organizations today.

Touted as a game-changer by pundits, the idea of crowd-funding has created a wave of disruption across industries. For this article, I’d like us to explore how to utilize these platforms intelligently in a non-profit environment.

 

Community before Audience

One thing that gets everyone all hot and bothered about crowdfunding is access to thousands of people who are just waiting give money to a worthy cause or project. What are the chances someone (and a significant enough number of someones at that) will stumble across your project amongst thousands, if not millions of other  ideas competing for their attention and dollars? Pretty slim.

Unfortunately, that’s a common misconception that often results in failed campaigns. Fact is, you have to have a community BEFORE you have an audience that will fund your project. Seth Godin, for example, recently funded his book, The Icarus Deception, through Kickstarter. He raised over $250,000 in 30 days. Sounds impressive, doesn’t it? However, in a candid podcast, he shared that 96% of those funds came from his existing community. So… NOT from kickstarter itself, but rather from his regular readers and newsletter subscribers.

That is our first important idea – much like Seth Godin – we have to build a community of people who trust us and who gave us their permission to connect. Community building takes considerable time and strictly speaking in digital terms, it means focusing on growing your e-mail newsletter subscription list, your Facebook audience, Twitter followers, blog subscribers and so on. We’ll talk more about community building in upcoming posts, but for now – I just need you to be aware of the fact that you need a community before you can execute a successful crowd-funding campaign.

 

Framing your project for success

Much like an annual fundraising event, a crowdfunding project needs to have a clear goal – but in order to fully utilize these platforms, we need to sharpen that goal and make it very specific. So, instead of “We’re looking to raise $10,000 for our charity” – we need to propose something like “$10,000 to help 12 underprivileged families buy groceries”. One trick you may employ here would be thinking about your headline design. Is the title of your project tweetable? Actionable? Attention grabbing?

Crafting your title will help frame the rest of the project and also guide the content used to explain and promote it.  Some other questions that will help you design your project include:

  • What are we going to achieve, if successful?
  • How, specifically, will these funds be used?
  • What date and time does the project begin and end?
  • How will the funder know their money has been put to good use?

In fact, answering that last question is an incredible authority booster. If you think about most fundraisers, it’s very rare to see the effects of the money raised in a highly-public, transparent manner. Social media and crowdfunding platforms allow you to do just that. Show those who decided to support your project what THEY achieved. You can do this with followup videos, updates or blog posts, providing an incredible opportunity to build your own community at the same time. Here’s an example for victims of hurricane Sandy.

One more thought before we wrap this section up… if this is your first time experimenting with these platforms, consider starting small. Maybe you only raise $1000 the first time for a smaller project. If you follow up with your funders and create collateral content (videos, posts, etc), it will give you an opportunity to build trust and repute and also learn what works for you specifically.

 

Power of Story

The crux of a successful crowd-funding project lies in the story. A dull story yields poor results and often, failure to reach project goals. A good story, on the other hand can elicit a viral response, increase the reach of your organization and produce better-then-expected results.

While we all think our story is the most amazing piece of narrative on the planet and once they see it, people will flock at the opportunity to donate – the real world is much more competitive then that. Not only do you have to compete with other organizations who also have amazing stories, but you also have to overcome the extremely short attention span of an average user.

Your story will likely be told in a video format along with some accompanying text – and most of the time you only have 2 or 3 minutes to capture and hold someone’s attention and then elicit an emotional response resulting in a donation. Sounds hard just thinking about it… However, there have been hundreds if not thousands of successful examples for you to learn from. If you are not a videographer or don’t have the funds available to hire one (which may be a smart move in the first place), you may want to consider crafting a compelling story using a proven framework… The Hero’s Journey. I’ll let you research that on your own, but in the meantime, check out a great example from Charity:Water to draw inspiration from:

 

What’s in it for me?

Crowd-funding did not begin with non-profits in mind. Rather, it was oriented towards innovators and craftsman to showcase their cool ideas and products in hopes of making them a reality (Pebble watch for example). In order to elicit response, these innovators would offer rewards for each level of investment. For example, you may receive a plain-jane product for $50, but for $100 you may get a signed certificate and a limited-edition version of the product.

So, funders are conditioned to receive something in return for their donation. So, you have to ask yourself – what’s in it for them?

To answer this question I spoke to Ben Lamson, co-founder of WeDid.it platform who also specializes in consulting with non-profits and helping them build successful crowdfunding campaigns. Ben argues that going down the promotional product route is safe – but incredibly uninspiring and boring. In fact, calling it in on the rewards will likely result in lower levels of engagement and donations. So, you have to get creative.

One suggestion Ben had was to look at your own assets. Things that an average person would never really have access to, like experiences only you can offer. For example, rather then offering a branded pen or a cup (blah), you may consider offering a dinner with the executive director. Of course, you won’t be able to offer 1000 dinners, in which case you can also think about recording a thank you video from the person who benefited from the donations, or sourcing hand-made, sustainable products as rewards (another aspect Ben specializes in).

 

Now, I’d love to hear from you – Do you have plans to run a crowdfunding project? Have you ran one already? What made it successful or what could you have done better?

I hope this was a useful read for you – and if someone you know may benefit from these ideas, please forward or share this article :)

– Ernest // Follow me on Twitter

4 thoughts on “The non-profit guide to successful crowdfunding

  1. Great post! At StartSomeGood.com – a crowdfunding platform focused exclusively on nonprofits and causes – we have seen these lessons play out over and over again. Bringing people into the campaign – before the campaign even launches – is crucial to success. We always advise those planning on crowdfunding to think of it as, at minimum, a 2 month project: one month to create hype and get people ready beforehand and one month when the crowdfunding campaign is actually live.

    Not focusing on the why, assuming that all the funders are just a crowd “out there” or that the platform itself ensures the success of your campaign (as opposed to your own efforts) and failing to leverage and thank your early supporters are all mistakes we’ve seen. Here’s a post we wrote up on the “Top 10 crowdfunding mistakes” http://startsomegood.tumblr.com/post/33752121563/the-top-10-crowdfunding-mistakes.

    And, more optimistically, here’s 5 successful crowdfunders sharing what worked for them! http://startsomegood.tumblr.com/post/43105418440/whats-your-secret-to-crowdfunding-success

    Cheers!

    Tom
    Co-founder, StartSomeGood

  2. Ernest, I have some questions for you. I get how crowdfunding works and your advice and tips are clear and make perfect sense. However, I work at a large non-profit where we are not sure if we need to change to crowdfunding. We still get a 7% return on our direct mail, have a large email database (and continues to grow).
    How will crowdfunding work better than our current website (where you can donate)?
    Water services does crowdfunding provide that I can’t have on my own website?
    Can you collect the donors contact information when you crowdfund?
    Thanks for taking the time to repsond.
    Jamie

    • Hi Jamie – thank you for stopping by :)

      Unfortunately, I can not offer specific recommendations to your situation. I would suggest connecting with some other organizations who have successfully used crowdfunding in order to get better details.

      In my opinion, crowdfunding doesn’t replace your normal fund-raising activities, but rather it complements them. Starting small, you can get an idea of how successful it may be for your specific organization, and tune it from there. Which means testing the message, the timing, the campaign, the rewards, the title, the number of people needed and all other components.

      Crowdfunding is also time-bound and limited, so it will not replace a donation button. But it does allow you to have a neutral, fun presence which may lead to more exposure and new funders.

      Each service is different, so you would have to do some investigation of your own in regards to collecting contact information and specific advantages or disadvantages.

      I am advising a public health group which does work in Tanzania on incorporating crowdfunding into their model – and in their case, that will likely be the main fundraising device. So, again – it depends on your situation and strategy.

      Hope that helps.

      – ernest

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