PhilanthroTech: How Nonprofits Are Using Crowdfunding | Beth’s Blog

PhilanthroTech: How Nonprofits Are Using Crowdfunding

Crowdsourcing, Fundraising, Guest Post

Flickr Photo by Toddy

Note from Beth: I’m headed down to Austin, TX for SXSW where I will have the pleasure of facilitating a workshop on measuring social media with KD Paine with case studies by David Neff and Carie Lewis.   David is based on Austin — wanted to share with you a post about crowdfunding to celebrate Austin Giving Day #AmplifyAtx that raised over $2 million earlier this week.

PhilanthroTech: How Nonprofits Are Using Crowdfunding – guest post by David Neff

Crowdfunding. Crowdfunding. Crowdfunding. The word is ringing in the ears of nonprofit fundraisers and executive directors this year. So why is this buzzword suddenly all over the place in the nonprofit world?

There was a lot of buzz about crowdfunding in 2012: a video game called Star Citizen raised more than $7 million, Kickstarter banned nonprofits from using its platform (see #3 on that page), and a Tumblr popped up that takes aim at suspicious crowdfunding projects. For nonprofit leaders who are paying attention, the crowdfunding trend is hard to miss.

But crowdfunding isn’t new to nonprofits; it’s something they have been doing for years. They build up an online and offline community, create great projects, and then ask the community to fund them through donations. However, there is a new way that nonprofits are using crowdfunding: giving days. I foresee that 2013 will be the year that this strategy really takes off.

Giving days are 24-hour online fundraising competitions that combine gamification and deep social interaction to bring communities together for local causes. In November 2012, the giving day platform Razoo partnered with GiveMN, an organization that aims to grow online giving in Minnesota, to break a world record by raising $16.3 million for Minnesota charities in just 24 hours. More than 53,000 individuals contributed to that giving day, and as a result, 4,300 nonprofits and schools received critical funding.

How can we test this this theory, and how can you be a part of it at SXSW this year? I’m so glad you asked. Austin is hosting its own giving day, called Amplify Austin, on March 4, 2013. The goal is to get more than 200 nonprofits to participate and then raise at least $1 million for them. (Full disclosure: I’m on the planning committee for this event.) You can also learn more about crowdfunding from a variety of presenters at SXSW—check out the speakers from CrowdfunderTechShop, and a group of four speakers including those from Citizinvestor and CivicSponsor, Inc.

I’m one of the PhilanthroTech bloggers posting here on the Groupon Grassroots blog as we prepare to head to the 2013 SXSW Interactive Festival in March. Stay tuned for more conversations about topics ranging from microvolunteering to disaster response. We are looking forward to engaging in these conversations with you over the next couple of months.

How do you think offline or online crowdfunding will affect your favorite causes in 2013? Add your comments below.

David J. Neff is author of The Future of Nonprofits: Innovate and Thrive, The creator of the npo Lights. Camera. Help., and a Digital Strategist at PwC in Austin, Texas. He has more than 14 years of experience driving innovation and change in the nonprofit sector. Check him out on Twitter @daveiam.

16 Responses

  1. David says:

    Thanks for posting this Beth. We ended up raising 2.7 million in 24 hours!

  2. We’re excited to try our first-ever day of giving here in Idaho on May 2nd!

  3. Beth says:

    Crystal – that is awesome. Do you have a link? Can you tell me more about it?

  4. Sahaja says:

    this is truly awesome – for a long time I have been mulling over how to get the charities in need on the same wavelength so as not to have to reinvent all the systems needed. This is inspirational.

  5. Dan S says:

    This is a great article because non-profits have such a strong role in communities that they must be able receive funding through different mediums in order to get their many projects funded. We (www.funderhut.com) are a community-oriented crowdfunding platform and we embrace non-profits and charities because they deserve the funds just as much as any other organization or business. Let the contributors decide where their contributions go! We also help them through the crowdfunding process to ensure that their project will be successful.

    Thanks for the post!

  6. [...] Kanter (an expert in the nonprofit sector and also a speaker at SXSW Interactive) shared PhilanthroTech: How Nonprofits Are Using Crowdfunding, a guest post by David Neff.  Neff, an Austinite and author of The Future of Nonprofits, was on [...]

  7. [...] How Nonprofits Are Using Crowdfunding–Crowdfunding–getting donations to support specific projects–is one of the latest ways nonprofits are dealing with a loss of philanthropic and government dollars. Here’s how some nonprofits are doing it. [...]

  8. Greg Mullen says:

    I am concerned about commissions that are paid to “crowd funding websites”. Like kickstarter. Do we need organizations who are going to take a cut? Can we raise funds without them? Isn’t the point of crowd funding to de-centralize power?

  9. Greg Mullen says:

    New to this. Need a little direction.

  10. [...] Kanter, the blogger behind "Beth's Blog: How Nonprofits Can Use Social Media," explained that while crowdfunding [...]

  11. [...] Source: PhilanthroTech: How Nonprofits Are Using Crowdfunding Did you like this? Share it:Tweet [...]

  12. Kathleen B says:

    This is a great article but if Kickstarter and Crowdfunder don’t allow non-profits to use their services, the other services are aligned with community efforts. What are the best options you recommend for a small start-up non-profit. I’m on the board of a new equine assisted therapy riding center in Northern Texas.

  13. Beth says:

    Kathleen: Check out Razoo – it’s a terrific social fundraising platform. I’ve used it for a number of campaigns, most recently to raise $5K for ocean conservation in memory of my Dad. Here’s the post with some tips http://www.bethkanter.org/ocean-love-earl-thanks/

  14. [...] 1. Do you know a platform that uses crowd-sourcing and crowd- funding at the same time ?  Ooh, good question. What have you found via searching? Look at the blog of Beth Kanter who has really specialised in this! http://www.bethkanter.org/crowdfunding/ [...]

  15. Rob Wu says:

    Kathleen: Hey Kathleen check out our site http://www.causevox.com

    Our crowdfunding platform is designed specifically with nonprofits in mind.
    We would be happy to have you come and join our family of members!

    Feel free to take a look at some of the progress our other members have had using our site http://www.causevox.com/case-studies/