Grab a cup of coffee, take five minutes, and tune in with me to the topic of crowdfunding.
Per Forbes, as of 2013 it’s a $5B worldwide industry. It’s all the latest buzz, and it’s not just a for-profit term. It’s a hip new word and a hip new way that nonprofits either are or should be looking at fundraising. Throw the term out at a conference or a cocktail party and people will go “Oh, yes, yes…that crowdfunding is really taking off. We need to do more of that.” They may be quietly thinking to themselves: “Note: Talk to team on Monday about how we should do more crowdfunding.”
However, it’s not really new. It’s just being adopted in a different way by today’s modern fundraisers. It has a cool new, funky, fresh name. (Yes, I just said funky, fresh). And, that is exciting and enticing.
So, what is it really?
You may be doing it already!
If you are just getting into exploring the world of crowdfunding, I recommend reading this free, brand new paper: Crowdfundamentals: What your nonprofit needs to know about today’s crowdfunding. Written by Amy Braiterman and Andrew Welkley, two experts in the peer-to-peer and crowdfunding space, this pieces offers insight into how to be successful with this model of fundraising . Even if you have a vibrant crowdfunding program underway, I still recommend reading the paper. It’s a quick and delightful read and sheds light on what may feel like an intimidating topic. Because—let’s face it—sometimes buzz words are intimidating.
Here are the 5 key takeaways I gathered from the paper:
1. Crowdfunding isn’t new.
The practice of crowdfunding has been in practice since 1776 with our founding fathers creating a government by the people and for the people. The Statue of Liberty stands today because 125,000 citizens chose to band together and raise funds to complete her pedestal. Long story short: The practice of crowdfunding is the practice of fundraising. As a non-profit, you are already doing this.
2. Technology makes crowdfunding easier.
It is not the practice that is new, but the tools we use to do it. There are online platforms which didn’t once exist. What’s new and shiny and exciting is the ease with which one can start a crowdfunding campaign. There are over 500 crowdfunding platforms today. Wow, that’s a lot!
3. Commercial crowdfunding regulation is not there yet.
This is where non-profits have an advantage in the space. Per the paper, “As a 501(c)3, nonprofits have an advantage over crowdfunding websites; we are audited, regulated, and we provide tax information and other records to our donors. So let’s communicate that.”
4. Passion is key.
Marketing matters and storytelling sells. We’ve seen this with the success of Team in Training which started with one father’s passion around a cause for his child. We saw this with the ALS Ice Bucket challenge. The stories of inspiration and funny videos drove this phenomenon. Memorial Sloan Kettering has seen huge success with their indoor Cycle for Survival events that have a unique and exciting branding element.
5. Think about a stewardship strategy before diving in.
Once you have your campaign site setup and you are raising money, it is important to think about how you are stewarding your donors. How will you say thank you to these often new supporters? And from a staffing perspective, how will you support them? How will you encourage them in their efforts and inspire them to grow as crowdfunders? After all, as a non-profit you want to grow. Your crowdfunders should grow with you.
Now that I’ve given you my five minute digest on the paper, again I encourage you to give it a read. What I would like to leave you with is this big idea and perhaps my favorite quote from the paper:
The next big fundraising idea will come from the crowd. It is true of yesterday; it is true today and will be true tomorrow.