Is Crowdfunding a Good Fundraising Fit for Your Nonprofit?

Posted on March 18, 2015 by | 4 comments
crowdfunding drawing

Making waves with her March 2013  TED Talk, Amanda Palmer advocated crowdfunding in music. Since then crowdfunding has practically become a household word. The rise of Kickstarter, Indiegogo, and GoFundMe changed the way people look at fundraising in the digital age. While the biggest or most popular crowdfunding projects are for profit, there is undeniable potential for the nonprofit community to tap.

 

Rich Dietz predicted five important fundraising trends for non-profits in 2015, but crowdfunding is curiously absent. Dr. Richard Swart predicts that nonprofits will use crowdfunding more because of their ability to “directly connect [foundations] to recipients of aid.” Bill Clerico of WePay agrees, stating that its “an extremely efficient way to solicit and manage donations” while boosting awareness of causes through its social and viral potential.

 

Perhaps the reason Dietz omits crowdfunding from his predictions is because the nature of crowdfunding for nonprofits is still being figured out. Nell Edgington expresses skepticism, asserting: “We need to get smarter about what crowdfunding is, and what it isn’t. A Kickstarter campaign makes sense for startup and other capital needs, but not for ongoing revenue (emphasis hers).”

 

Despite Edgington’s wariness of crowdfunding, some nonprofits have made astounding use of crowdfunding platforms. Just one month ago, John and Hank Green’s Foundation to Decrease Worldsuck raised over $1.2 million through Indiegogo for the 2014 Project for Awesome. All of that money, minus the cost of perk manufacturing and shipping and other fees, will go to fund other foundations focused on social change.

 

While such uses of crowdfunding platforms have proven effective for nonprofits, such examples could be considered niche. It is unclear if a similar approach would yield similar success for other organizations. But crowdfunding makes connections between some of Dietz’s predictions for the new year. Crowdfunding allows organizations to show their donors exactly where their money is going and reward engagement, building transparency and trust. It allows nonprofits to harness multichannel social methods of awareness, tapping the power of millennials on social media and mobile web traffic.

 

Do you think these predictions are accurate? How can your organizations use crowdfunding? Will crowdfunding’s role in nonprofit fundraising grow or pass? Let us know in the comments!

 

Other TST stories on crowdfunding:

Podcast Nonprofit Storytelling with Video, featuring award-winning filmmaker Genevieve Castlino-Merchant

The New Way to Raise: Crowdfunding

From Fantasy to Funds to Finale: Indiegogo Rolls Reality

Crowdfunding Saves Pets

 

Joseph NelisAbout the Author:  Joseph Nelis is a writer living and working in Pittsburgh. He earned an M.A. in Literature from Indiana University of Pennsylvania, writes for New Place Collaborations, and enjoys telling stories with friends in the city’s East End.

 

 

  • Sayydah Garrett

    Our nonprofit, Pastoralist Child Foundation, had a few campaigns on Indiegogo, Fundrazr, and GlobalGiving. We never reached our goals. I was told by an expert networking friend that we didn’t do well because “we don’t have a crowd.” So true!! We’re relatively new (founded in 2012). We’ll probably try again…never give up!

    • http://www.thirdsectortoday.com/ Amy DeVita

      I know you’ll not give up, Sayydah! Good for you.
      While every org has different needs and characteristics, generally speaking, my opinion is that crowdfunding can be an additional helpful “tool” in one’s “fundraising tool kit”- but that it (like any other tool) isn’t a quick fix- nor is it a stand-alone. I think that if you have a very clear understanding of “Who” you are appealing to and “where” you can meet them— that will serve as the best guide for your efforts.

  • http://www.nonprofitrd.com/ Rich Dietz

    I figured I would jump in here since I was mentioned above, and very happy to see this conversation forming around crowdfunding. I have a workshop session I have presented a few times discussing crowdfunding and Peer-to-Peer Fundraising that compares and contrasts, and teaches some best practices around each platform.

    In the end, I don’t see too much of a difference between crowdfunding and any other good online fundraising campaign. You still need a compelling message/need, an amazing story that hooks people in, a sense of urgency and a strong vision of the impact the donations will make. Most importantly, as Sayydah and Amy mentioned, you also need to get eyeballs and visitors to your campaign (you need a “crowd” whether its on Kickstarter or a campaign on your own website).

    In the end, I see crowdfunding as more of a platform or tool and not really a different “type” of fundraising. If you create an amazing online fundraising campaign using the tactics I mentioned above it will be successful no matter where you host the content or send folks to donate. I think the real power comes when you add more “peer-to-peer” elements to your campaigns…. but that’s a story for another time/article.

    Thanks, Rich

  • Niki Kalmus

    Our nonprofit, Survivors of Torture, International, is considering running a crowdfunding campaign to help our clients with transportation costs of getting around San Diego, CA on public transit. Sometimes something as little as a bus pass is the difference between treatment and no treatment for torture survivors. We’re currently in the research stage - but we think when you have something concrete people are more likely to donate! We just don’t want it to take away from our regular donations. Thoughts?

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