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Intro to Crowdfunding for Nonprofits


Crowdfunding has grown increasingly popular in the nonprofit sector over the past few years, thanks to the Internet and crowdfunding platforms like Kickstarter and Indiegogo. The question on every non-profit, charity and fundraiser’s mind is “can crowdfunding really raise a lot of money for my cause?” The answer is yes - if you do it properly.

Christopher Charlesworth, co-creator of the CSI Catalyst crowdfunding platform for social good, and Whelena Sainsbury, volunteer and creator of Not Far From the Tree’s crowdfunding campaign, lead a workshop on crowdfunding at Toronto Net Tuesday on October 8th, 2013. They shared tips and strategies on how your nonprofit can be successful in your crowdfunding campaign.

This post summarizes the key takeaways from the event: crowdfunding basics, planning your crowdfunding campaign, managing your campaign and what to do after the campaign. You can also watch the recording on TechSoup Canada’s YouTube channel, and view Christopher's & Whelena's slides on SlideShare.

Crowdfunding Basics

What is Crowdfunding?
Chris explains crowdfunding as “the aggregation of small amounts of capital from a large group of people in order to fund a business, project or organization”. He elaborates further on this point in his guest blog post, “What Nonprofits Need to Know About Crowdfunding”.

What about Crowdsourcing?
Crowdsourcing is the completion of a task by a large group of individuals, typically online.  An early example of crowdsourcing would be nonprofits posting questions on a discussion board seeking answers from the community.

For more information on crowdsourcing, Idealware wrote a helpful article on “How Crowdsourcing Helps Your Nonprofit”.

Why Should I Crowdfund?
Crowdfunding is a great way to access capital your nonprofit normally wouldn’t have access to, and build your social network. If your nonprofit is thinking of ways to acquire new donors, consider reaching new demographics through crowdfunding.

As for Whelena and Not Far From the Tree, the answer was simple: They need money. Whelena wanted to tap into the excitement and buzz around crowdfunding, as well as capitalize on the timing of the campaign (which went hand-in-hand with their busy fruit picking season).

Planning Your Crowdfunding Campaign

Short Campaigns Aren’t Easy
Don't wait until your campaign is up and running to figure things out - plan ahead of time

Whelena recommends at least 3 months of planning and preparations before you launch your campaign. For Whelena, creation of the video was the most complicated part as it represents the organization in a short amount of time (3 mins is the recommended length). Planning, filming, editing and obtaining approvals can be a long-winded process. Whelena also recommends writing marketing content ahead of time (such as blogs and social media posts), so you’re not in a bind once your campaign is live.

Have a good quality pitch/idea
As with any fundraising campaign, your idea or pitch has to resonate with your supporters and inspire them to give within a set time frame. Raising money for a generic mission service (e.g, donate to medical research) isn’t going to cut it in crowdfunding. People don’t really connect with your overall mission - they connect right away to timely projects. Think about the value your project will give to your supporters if your campaign is successful, and whether that value is enticing enough for immediate action.

Marketing. Marketing. Marketing
Marketing and promotion is just as important as the funds you’re raising. Chris describes crowdfunding as the “monetization of your social capital”, so make sure people are aware of your campaign. Always start with your current network - because you have an existing relationship, they are the most likely to contribute and to grow the campaign by sharing it with their own networks.

As well, remember the power of influence. If at all possible, getting endorsement from an influential person or organization goes a long way. A great place to start would be to tap into existing communities that are relevant to your cause. For example, if you’re launching a campaign for an environmental cause, consider reaching out to as their audience is likely to share similar values.

Offer Valuable Rewards
Value does not necessarily mean expensive. The best nonprofit crowdfunding rewards are novel, creative and most importantly connected to the cause, so try to think outside the box.

Whelena shares how Not Far From the Tree’s top reward was cherry beer, picked and brewed locally.  This reward was an instant hit because it tied directly into their mission and it was creative.

Pick a Platform
There are many to choose from and each has its own advantages and disadvantages that may work for your nonprofit. The key is to focus your campaign on one platform. Don’t water down your support or confuse your social network.

Not sure about your options? Check out our post on “Which Crowdfunding Platform is Best for Your Nonprofit?”.

Consider Offering Charitable Receipts
It’s natural for donors to ask for receipts when they’re giving to a charity, so why not offer receipts for their crowdfunding donations? This involves additional steps, such as CRA approving the value of tax-deductible amounts for each reward level and tax receipt fulfillment, however it would encourage more people to give and build your nonprofit’s reputation.

Plan Past Your Goal
If you plan on raising past your goal, be transparent from the start! As nonprofits, we’re in the reputation economy so you should plan and communicate what you will do with your money if you pass your goal. Crowdfunding donors appreciate authenticity and will more likely renew their support if you build trust.

Managing Your Live Campaign

Don’t Drag it Out
Chris shared that “the longer the crowdfunding campaign, the worst the results”. A duration of 30-35 days seems to be the sweet spot. 

Dedicate Time to Communicate
Whelena spent 2-3 hours every day (sometimes weekends) developing content, following up with donors, publishing blogs and tweeting about their crowdfunding campaign. Chris adds that it’s not uncommon for nonprofits to spend more time on their crowdfunding campaign in order to build momentum and maintain it.

Involve Your Colleagues
You may be the only one managing your nonprofit’s crowdfunding campaign, so take all the help you can get! Whelena made sure everyone at Not Far From The Tree knew about their crowdfunding campaign. The results? Staff, volunteers, committees and Boards were reaching out to their friends and family.

After the Campaign

Budget time for reward redemption
Coordinating with the donors and couriering packages may take longer than you anticipate. The last thing you want is a donor’s experience spoiled by a drawn out reward fulfillment process. Ensure your donors have a great experience from the moment they give to the moment they receive their reward.

Continue Relationships
Just because your campaign is over, doesn’t mean the experience has to end. Keep in touch with your donors and celebrate your successes together – especially if you raised past your goal.