Five Best Practices in Nonprofit Crowdfunding | Beth’s Blog

Five Best Practices in Nonprofit Crowdfunding

Fundraising

Flickr Photo by Lendingmemo

 

Note from Beth: Last year, 30% of the $5 billion crowdfunded went to social causes according the “Cracking the Crowd Funding Code“.  Nonprofit’s use of crowdfunding is growing at an exponential rate with many nonprofits jumping on the crowfunding bandwagon attracted by the potential of finding new supporters.   Robert Wu offers a great set of best practices in this guest post below.   As crowdfunding practices mature and become an valuable part of the nonprofit fundraising toolkit, there is a need to set standards and expectations.  David Neff and colleagues have launched a “Crowdfunding Bill of Rights” to get the discussion going.  You can help create the Bill of Rights here.

Five Best Practices in Nonprofit Crowdfunding by Robert Wu

At CauseVox, We’ve helped thousands of people and nonprofits all over the world crowdfund for nonprofits and social good projects. In the early crowdfunding days, I helped launch a crowdfunding campaign with the American Red Cross and SXSW that raised $120,000 in 10 days.

Nonprofit crowdfunding is changing the landscape in online fundraising. As more and more donors are being exposed to crowdfunding for products and services, they’ll expect your fundraising to shift towards those approaches as well.

Here are five best practices that I’ve learned along the way that you need to follow in order to crowdfund successfully for your nonprofit.

1.  Start with a measurable goal

Your goal aligns your team and supporters with your crowdfunding campaign. You have to find a balance between what is within reach and what is an aspiration. If you’ve fundraised online before, ask yourself a few questions to get a baseline of what is achievable.

  • How much have we raised online in the past year?

  • What is the average amount that we have raised in a campaign or event?

  • What is the average donation amount online for us? (it’s $88 for in crowdfunding)

If this is your first time with crowdfunding, you can ask yourself:

  • How much do I need to make an impact?

  • How much does the product or service that I want to create cost?

  • How much did similar crowdfunding campaigns raise?

After you think through these questions, create a well defined goal that follows the SMART framework: specific, measurable, attainable, relevant, and timely.

2.  Rethink Rewards and Donation Tiers

Rewards are items, recognition, or a service that you’ll get for contributing a crowdfunding campaign. They are also known as perks or gifts, and are used as incentives to motivate people to support a campaign.

But studies have shown that rewards for donations may actually reduce giving.

The Yale researchers George Newman and Jeremy Shen, found that contrary to expectations, rewarding donors cut donations in most situations. In a nutshell, donors that received a gift, felt selfish, which in turn reduced the motivation for giving.

Instead, you should focus on impact-focused rewards.

An example of impact-driven fundraising gifts are hand-sewn scarves from a family who started a local business as a result of your donor’s micro-finance loan or a personal letter from a child who you sponsored for her education.

Impact-driven fundraising gifts are an all-around win-win because it matches both the donor’s motivations to give and the tangible impact on the one who received it.

3. Create a sexy story

You know that compelling stories get you donations, sharing, and publicity, but you’re probably thinking — “I don’t have a sexy story” or “I don’t know how to tell a compelling story”. It’s actually easier than you think to create one that works.

You have all the ingredients for a sexy story, but how do you get the recipe? Just look at Hollywood, and think back to all those movies and TV shows you’ve watched.

There are four classic storylines that perform really well with nonprofit crowdfunding:

  • Overcoming the monster – Similar to James Bond, Batman, or the Avengers, you can show your organization overcoming a villain or some form of adversity. For example, Earthrights International fights against corporate human rights abuse. They raised $20,000 with this storyline.

  • Rags to riches - Like Chris Gardner in Pursuit of Happiness, showcase your organization or individual(s) transitioning from a low to a much better place. For example, Project Renewal helps homeless people get off the streets. They showed Harry Dickerson reclaim his life from homelessness on their Giving Tuesday campaign and  raised over $70,000 with this storyline.

  • Quest - Like Lord of the Rings, tales of a dedicated group of people who encounter perils along the way to reach an ambitious goal can be highly engaging! This storyline is best used as a part of peer-to-peer fundraising, where the individual can share their story. For example, a group of friends shared stories of their beard-growing journey to raise funds for breast cancer research. They raised $28,000.

  • Tragedy - In Breaking Bad, Walter White dives into the world of making meth. He falls into something bad and gets more and more evil each day. You can focus on the negative as part of your storyline. For example, I raised $120,000 for Japan disaster relief by showing how the tsunami destroyed cities and displaced communities.

You can use these storylines to frame your story and get your crowdfunding campaign the attention it deserves. At the end of your story, put in a call-to-action so that the reader/viewer can know how to help.

4.  Build a tribe of champions

Contrary to what you may assume, you can’t launch a crowdfunding campaign by relying on the crowd. You’ll need to cultivate a tribe. Start with a list of 100 people that you know and would be willing to take action and put them in three buckets:

  • Promoters - People that will share your campaign and updates via email, social media, etc. They’ll amplify your reach. Think of them as your own publicity team.

  • Fundraisers - People that will help solicit for donations via peer-to-peer fundraising. They’ll create a mini-crowdfunding campaign through personal fundraising pages. On average, we see about 50% of crowdfunding campaign funds come in this way.

  • Donors – People that will contribute to your campaign.

Give each bucket a role and goal so that they know how and when to help. Some people can take on multiple roles if they’re high up on the engagement ladder.

In my crowdfunding campaign at SXSW, we were able to get the campaign into CNN, WSJ, NYTimes, and dozens of other press and media outlets.

 

Even though this drove an incredible amount of traffic and donations, not all crowdfunding campaigns should invest their time in trying to find press coverage. Here’s why:

 

  • Finding the right journalists can be hard. If you don’t have a relationship with them already, then the chances of them writing about you are lower.

  • Your campaign or cause has to be newsworthy. Journalists look for stories that follow a broader trend or that are in their beat.

  • Getting publicity may not yield significant donations. Even though you can get tons of awareness and traffic, they may not be the right audience that will fund your campaign.

Now, if you do decide to go the publicity route, here are the three steps to getting press.

  1. Target - Use free tools like Twitter Search to find journalists that have an interest in your area. Jot down their contact info (Twitter handle and email address).

  2. Prepare – Ask yourself, why is this newsworthy? Why would the journalist want to write about me? Why would her audience want to read the article? Come up with a press release and pitch materials based on your newsworthy story.

  3. Pitch - Contact the journalists that you’ve identified, tell them your story, and give them more info about your campaign.

Additional Best Practices

Getting started with crowdfunding is easy, but doing it right can be a challenge. You can learn more details on how to launch a nonprofit crowdfunding campaign. Download our free ebook on planning a crowdfunding campaign today!

Rob Wu is the CEO of CauseVox, a crowdfunding and peer-to-peer fundraising platform for nonprofits.

 

 

 

17 Responses

  1. Rob Wu says:

    Thanks Beth for having me on your blog today!

  2. Hey Beth,
    Thanks for the love for our crowdfunding Bill of Rights! Love to see more feedback and comments!

  3. Adam Weinger says:

    Hi Rob,
    I especially love the evidence-based conclusions of #2 (rethink reward-based donations). It’s really interesting that rewards discourage donations, but telling potential donors what their money will do for others increases them. That certainly speaks well about humanity!
    Adam


    Adam Weinger
    President, Double the Donation

  4. Love the specific questions to get a nonprofit thinking about their campaign. How big of a list do you think an organization needs to have to conduct a successful campaign, and what crowdfunding companies/programs do you recommend?

  5. Rob Wu says:

    Adam — rewards for charitable donations are all about preserving the motivation for giving. Once you dilute it with an exterior motive, then that hijacks the intrinsic nature of a charitable gift. It’s something to keep in mind as nonprofits plan their campaigns and set their rewards.

  6. Rob Wu says:

    Amy — Good questions. In terms of crowdfunding, let’s not have list envy. The size of your list doesn’t matter, but instead it is the depth of the relationships you have with that list. For example, celebrities matched with giving campaigns don’t make the impact that you’d think with their large fanbases. I’ve seen groups of friends outperform established nonprofits because they focus on raising funds via a small community of personal relationships. That being said, having a large list is great to amplify your campaign via social sharing or donations once the campaign is off to a solid start.

    In terms of fundraising platforms, I’m biased and have to recommend the one that I help lead (www.causevox.com). We’ve helped thousands of nonprofits and individuals all over the world with social good crowdfunding campaigns.

  7. [...] Wu, CEO of CauseVox, made a guest appearance on Beth Kanter’s blog to share the Five Best Practices in Nonprofit Crowdfunding. As crowdfunding continues to reshape the fundraising landscape as we know it, it’s [...]

  8. [...] “Flickr Photo by Lendingmemo Note from Beth: Last year, 30% of the $5 billion crowdfunded went to social causes according the “Cracking the Crowd Funding Code“.”  [...]

  9. [...] This article on Beth’s Blog shares some of the in and outs of crowdfunding and how it can be applied to nonprofits. The tips are broken down into fairly simple and digestible steps and there are some really great ideas in the article. Two of the tips that stood out to me (something that all crowdfunded projects should be mindful of) is how to set reasonable goals and reward tiers. [...]

  10. Peter Altuch says:

    “Tribe of Champions” or “Army of Followers” they amount to the same thing and will help create the momentum for fundraising success.

  11. [...] Note from Beth: Last year, 30% of the $5 billion crowdfunded went to social causes according the "Cracking the Crowd Funding Code". Nonprofit's use of crowdfunding is growing at an exponential rate with many nonprofits jumping on the crowfunding bandwagon attracted by th  [...]

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  13. [...] one just missed being in the blog last Friday. Beth Kanter shares five tips to help your [...]

  14. [...] Note from Beth: Last year, 30% of the $5 billion crowdfunded went to social causes according the “Cracking the Crowd Funding Code“. Nonprofit's use of crowdfunding is growing at an exponential rate with many nonprofits …  [...]

  15. [...] 1. Don’t rely on the crowd, cultivate a tribe of champions [...]

  16. [...] Non profits have a 45-percent success rate with crowd funding endeavors, according to Euro Money. Additionally, what is liberating about crowd funding is it reduces the burden of government support. Just by turning to crowd funding platforms, non profits can raise a significant amount of money in a short period of time. Beth Kanter, a non profit expert, said she helped launch the crowd funding campaign with the American Red Cross and SXSW. That campaign raised $120,000 in just 10 days.  [...]

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