Crowdfunding is one of the fastest growing trends in fundraising. Estimates from Blackbaud, Goldman Sachs and The World Bank forecast that donations from individual based crowdfunding efforts will reach approximately $8 billion by the year 2020. Additional data also supports this forecast, especially when considering the following trends:
- $300 million has been raised on Facebook via “Donate Your Birthday”
- 62% of donors who give to crowdfunding campaigns are new to crowdfunding
- Just Giving is the second most visited website in the U.K (Facebook is number 1)
- 70% of millennials believe they can impact a cause without relying on a traditional institution
Crowdfunding has been defined by Merriam Webster as “the practice of funding a project or venture by raising small amounts of money from a large number of people, typically via the Internet”. Devin Thorpe makes the following clarification in his Forbes article titled What is Crowdfunding: “In the non-profit sector Crowdfunding is often defined as “online fundraising,” “social media fundraising” or “peer-to-peer fundraising.”” Popular types of crowdfunding in the nonprofit sector include traditional “Run, Walk, Ride” (RWR) events and newer categories such as capital campaigns and tributes.
Many healthcare organizations have started to explore the possibility of adding a crowdfunding strategy to their existing fundraising programs. The main benefits of launching a crowdfunding strategy include flexibility and portfolio resiliency (as crowdfunding helps reduce dependency on major donors, corporate partners and RWR events.) Additional benefits include donor acquisition and the opportunity to steward grateful patients who might not fall under the major donor category. If your organization is starting to think about launching a crowdfunding strategy, it is important to start by evaluating your current set up:
- Think about your constituent database and evaluate their receptiveness to crowdfunding. Ask yourself:
- Can you leverage grateful patient programs to get people to fundraise on your behalf?
- Do you have corporate partners or employees who would like to fundraise on your behalf?
- Are your doctors and/or clinicians fundraising?
- Do you have third parties looking to run events on your behalf?
- Next, assess your existing technology and consider the following questions:
- Have you tried to use your donation technology from a mobile device? Is it mobile responsive?
- Does your technology integrate with other donor management tools?
- Is the technology scalable, intuitive, flexible and secure?
Pro tip: Forrester reports that 62% of adults are never away from a mobile device.
After your organization considers the above questions the next step is to start thinking about the type of crowdfunding campaign that would be right for your organization. Most fundraising campaigns fall under the following categories:
- Project-Based Campaigns: Project-based campaigns can help fund a very specific project for your institution. They are limited to a specific time frame to help generate a sense of urgency and are allocated as a restricted gift. Examples of project-based crowdfunding campaigns include:
- Capital campaigns (crowdfunding can help you expand beyond major donors)
- Board appeals
- Clinical research funding
- DIY Fundraising (a.k.a: Third Party Fundraising): With the advancement of crowdfunding technology, more and more individuals feel empowered to fundraise on their own terms. A DIY campaign will offer those individuals or community partners the technology that they need to fundraise on your behalf. DIY fundraising campaigns are typically set up as an evergreen campaign that helps your organization raise unrestricted funds. Examples of DIY crowdfunding campaigns include:
- Celebration campaigns or memorials
- Third party events
- Create your own event (i.e.: gaming marathon)
- Event-based campaigns: Many organizations are adding a virtual or crowdfunding component to their RWR events. This type of event has been made possible by the increased availability of wearable technology. Other organizations are leveraging crowdfunding technology to galvanize their communities around fun activities such as dance contests, incentive based fundraising challenges or giving days. Examples of event-based crowdfunding campaigns include:
- Virtual 5Ks or races
- Dance-a-thon or anything-‘a-thon
Pro Tip: Individuals who connect their fitness devices to their fundraising page raise 40% more funds per event.
All of the above considerations are important in order to ensure that your organization can support your crowdfunding events. Before you launch your first campaign the following considerations are also important:
- User Journey and Experience: Think about how your fundraisers will interact with your fundraising campaign. Your organization can create a single hub that ties all campaigns together or deploy each campaign option independently.
- Marketing: It is important to have a marketing and activation plan in place to drive people to your crowdfunding campaigns. Leverage resources such as newsletters, social media, local news stations or newspapers and email programs
- Data Flow: It is important to capture donor data, and have a plan that ensures it seamlessly flows into your CRM or donor management system
Once all the pieces of the crowdfunding puzzle are in place, your organization will be very well positioned to start benefiting from the flow of donations generated from this strategy. Most importantly, you will be aligning your strategy with the set of expectations that modern donors have. I wrote about these new expectations in a recent article called Giving in the Digital Age. In a world where individuals are increasingly becoming more influential change agents, it is now imperative for healthcare organizations to start thinking about how to respond to individual expectations, preferences and demands. A crowdfunding strategy is one of the keys to unlock the power, influence and funds of individual fundraisers that want to support your organization.
Join Maria Carolina Simon for her bbcon session, “Crowdfunding for Healthcare Organizations,” to learn how crowdfunding can help increase digital fundraising and help your healthcare organization acquire new major gift prospects. Register today!