How to Use Crowd-Funding Sites to Raise Money for Your Non-Profit

by Joe Garecht

Crowd Funding

Of all the innovative advances in online fundraising over the past decade, one of the most impressive has to be the rise of crowd-funding websites.

Some of these sites, like Fundraise.com, CauseVox, DoJiggy’s Pledge software and Fundly were set up specifically to help non-profits raise money to support their causes.  Others, like Kickstarter and indiegogo, aren’t non-profit specific but have been used by charities to raise money to support their mission.  Today, let’s talk about crowd-funding websites for non-profits: what they are, and how your organization can use them to raise more money quickly and efficiently.

What Crowd-Funding Sites Are

While features differ from site to site, at their most basic crowd-funding sites are websites that allow your non-profit to set up an online fundraising campaign based around a fundraising page, and accept money directly from that page using the website’s own credit card processor.

Many of these sites will also allow individuals to set up fundraising pages on behalf of charities they want to support, and others will allow your non-profit to set up a master page for your campaign and then allow your supporters to set up tangential pages that they can use to get their friends and colleagues to donate a portion of the goal of your master campaign.

Some of the sites (like Kickstarter) are geared more towards producing tangible products, and thus are best used by charities like arts organizations working to fund a play or art exhibition.  Others (like CauseVox) are specifically for non-profits and thus can be used to support a wide-range of organizations.

Crowd-funding sites work best for funding specific projects or campaigns, and do not work well for general fundraising or things like annual giving.  Some of the above listed sites work well for raising money through events, as do event-specific websites such as EventBrite.

What Crowd-Funding Sites Are Not

Many non-profits that find out about crowd-funding websites get very excited and make the mistake of thinking that these sites are magical cures for all of their revenue woes.  Crowd-funding sites can be a huge help, but they are not a fundraising panacea.

For example, one of the great things about these websites is that once you get some traction on your campaign, other people from around the world may decide to donate solely based on the strength of your project.  That being said, don’t expect to slap up a fundraising campaign, go away for three weeks, then come back to find that you’ve raise $1 million.  It doesn’t work that way.  You’ll need to get the word our first, get some traction from your own supporters, and then you may get some unexpected help.

The best way to see what crowd-funding sites are all about is to go visit a few of the sites listed above, poke around and kick the tires.  Check out projects that are currently listed, and see what types of projects are getting funded, and which aren’t.  Doing so will give you a good insight into whether or not your fundraising campaign has a good chance of being funded through that site.

Which Crowd-Funding Site will Work For You?

If you’re interested in using a crowd-funding site for your next fundraising campaign, be sure to shop around.  Each site offers different features, costs, and benefits.  Here are some of the key things to watch out for:

1.  Look and Feel

What do the fundraising pages look like?  Are they appealing?  Will they be appealing to your donors?  How easily can you present your project given each site’s constraints and customs?  (For example, at KickStarter, a video is required for fundraising success.  At Fundraise.com, you’ll want compelling pictures, but won’t need a video).

2.  Ease of Use

How easy is it to set up a fundraising page?  Do you need to know HTML or have other technical skills to make your page look great?

3.  Payment Processing

What payment methods can donors use to make donations to your organization?  Do they take all major credit cards?  How about e-checks?  How long does it  take for donations made on the site to reach your organization’s bank account?

4.  Fees

What is the total cost of using this fundraising platform?  Is there a monthly fee? Set-up fees?  Credit card processing fees?  Fees for sending you a check or a statement?

5.  Marketing and Social Networking Capabilities

What tools does the site provide to help you spread the word about your fundraiser?  How easily is it to link and promote your fundraising page on social networking sites?  Can your supporters set up their own pages to support your cause, and have the money funneled back to you and apply to your overall fundraising goals?

6.  Traction

Does this site have traction?  (In other words, are people using this site to make donations, and are non-profits successfully raising money through this platform?)  You want to use a site that at least has a decent amount of traction and traffic.  Ideally, people come to the site to browse for causes to support… that way, you may get donations from folks who you don’t know, and who simply find you on the site.

Tips for Making the Most from Your Crowd-Fundraising Campaign

In order to maximize revenue from your crowd-funding campaign, be sure your non-profit does the following three things:

#1 – Create a Compelling Page

The best way to get new donors to support your cause through crowd-funding sites is by creating an emotional, compelling fundraising page.  Use pictures and videos where possible, tell an amazing story, and explain to people exactly how much you need and what the money will be used for.

#2 – Start With Your Own Network

It’s imperative to launch your online fundraising effort by reaching out to your own network.  Tell everyone you know about your campaign – including your donors, supporters, staff, volunteers, board, etc.  Ask them to e-mail out the campaign to everyone they know, and to ask their entire network to donate to the cause.  You won’t get donations from others on a crowd-funding site until you have a good amount of traction from your own network showing that you are serious.

#3 – Publicize the Effort

You also want to publicize your crowd-funding campaign as much as possible.  Put it on the front page of your website.  Link to it on your Facebook page, through Twitter, etc.  Try to get your local media involved by suggesting story angles.  Take every opportunity to spread the word and get people talking about your project.

 

Photo Credit: ausnahmezustand

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{ 11 comments… read them below or add one }

Joe Garecht January 4, 2016 at 10:09 am

Larry,

Thanks for your question. Honestly, I think you could be successful on any of the larger non-profit crowdfunding platforms. The key for you will be getting your existing donor and support base involved, getting them signed up to help spread the word, getting them to donate… your volunteers should be able to help you generate significant visibility and buzz for your campaign, which in turn will help generate donations…

Good luck with your campaign!

Joe

normand January 20, 2016 at 3:24 pm

Good day Joe

Me and partners are trying to launch a non profit chain of use material store with average of 8000sqf that will hires disabled,handicap, overage worker. We need 125k to settle the opening, so far we got 30k but were far from opening.

The initial project is to open 1 store a year on a basis of 5 years what
What platform would you recommanded and what style of presentation would you base the project

Joe Garecht January 21, 2016 at 2:59 pm

Normand, thanks for your question.

The first step is to build support offline, before you run a crowdfunding campaign.

Have you put together a board that is helping you fundraise? Have you asked for donations in person? Have you cultivated supporters and donors? If not, start there, before you launch a crowdfunding effort.

Joe

Debbie January 24, 2016 at 9:51 am

Joe, this site is really great! I love all the wonderful advise for those of us not schooled in fund raising. I also have a question I am hoping you can help me with. I am starting in a non profit program in my area. It has been started in other places in the US but I am the start up person for my county. We will supply a bag with books, plushes, activity books with crayons packed into individual string bags to first responder vehicles in my area. The first responder will hand these bags out as needed to children involved in various high stress situations like domestic disputes, accidents ect to help keep them calm and distract them for a bit. What would you consider the best avenue to use in order to raise donations for this program?

Joe Garecht January 25, 2016 at 1:53 pm

Debbie,

Thanks for your question, and congrats on your new program. For all non-profit organizations, no matter how small or where they are located, the fundraising start-up is always the same: start with individual fundraising. Put together a board, get the board to donate and to introduce you to their network. Start doing non-ask events and fundraising meetings. Raise money from individual donors, focused on major and mid-level donors. Only after you have a base of support set up should you move to things like direct mail and crowdfunding.

Hope this helps – let me know if you have any other questions.

Joe

Rebekah April 1, 2016 at 4:16 pm

I can’t find an answer about whether donations made to a 501c3 through Kickstarter are still tax deductible. Do you happen to know where I can find this information? Thanks!

Joe Garecht April 4, 2016 at 10:19 am

Rebekah,

You should check with your accountant. The rules vary, depending on the type of project, the person / organization receiving the money, and what the backers receive in return for their donation or purchase. For more, see:

https://www.kickstarter.com/help/taxes

https://support.indiegogo.com/hc/en-us/articles/526806-How-to-Check-if-Your-Contribution-is-Tax-Deductible

Thanks again,
Joe

Judy April 7, 2016 at 1:05 pm

Hi Joe,
I am a novice board member for a small non-profit half day K-8 school for children with learning differences like dyslexia, dysgraphia, ADHD, language processing etc. The program has a one to four teacher to student ratio and has been very successful helping these children transition back into public schooling. The costs to run this school make it very expensive and out of reach of many children. I would like to start a crowd funding to provide financial aid to the families of struggling children but cannot afford the tuition. Is there any particular crowd funding site that would help us reach more potential donors and keep the tax deductible status of the donations?

Joe Garecht April 9, 2016 at 2:40 pm

Hi Judy,

Thanks for your question. There are lots of great crowdfunding sites out there, and we just don’t have the time to stay on top of all of them, so we don’t provide recommendations on individual services. Your best bet is to use the guidelines in this post to make sure the sites you are thinking of using would be a good fit for your individual organization’s needs.

Thanks again,
Joe

Nathan Tarbet May 13, 2016 at 7:45 pm

This is a great article! I never really considered crowdfunding resources as a viable form of income, but with the article highlighting how crowdfunding should be approached I’m able to consider it more seriously as a supplementary source of income.
Are you familiar with how the laws around crowdfunding work? For particular states, I know there are different solicitation laws, but would those laws impact online crowdfunding campaigns?

Joe Garecht May 14, 2016 at 10:06 pm

Nathan,

Great question. You’ll need to check with your lawyer and/or accountant to determine the appropriate rules for things like charitable organization registration and solicitation rules for online crowdfunding.

Thanks,
Joe

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