If you run a non-profit organization or are raising money for a charity or non-profit cause, it’s time to ride the wave of the future and learn all there is to know about crowd fundraising (also known as crowdfunding). Harnessing the power of the Internet and the unparalleled reach of social media, crowd fundraising is revolutionizing the way non-profits run their campaigns, with a pointed emphasis on the value of smaller donors as opposed to mega donors.
Under the new scheme, a fundraising campaign begins with the organization or individual running the particular project. Next, supporters of the cause can launch their own online campaign on behalf of the organization, using their personal social media pages to spread the word to their friends, raise awareness, and create an even bigger buzz. Moreover, many of the crowd fundraising platforms allow the masses to set up fundraising pages on their behalf and accept donations directly from the organization’s credit card processor. By tapping into the already popular 21st century social media craze, non-profits are benefiting from significant increases in publicity and donations.
The beauty of these ‘branching campaigns’ – as they are formally known – is that they are both effortless and limitless. People are already spending more of their time in social media (Facebook, Twitter, Pinterest, and more), and there can be a branch campaign within a branch campaign with a branch campaign – to infinity. Moreover, the system allows the public to use their social media connections to become involved in a cause they believe in or that is important to someone they know.
Statistically, according to digital engagement strategists, online donations as a whole are showing a 10-20% annual increase, while crowd fundraising popularity and niche donation portals have been steadily climbing over the last few years. Moreover, by recognizing the value of small donations – rather than waiting for support from larger funding bodies, the government, or banks – non-profits are able to reach goals which otherwise may have been impossible via traditional methods.
Another aspect of crowd fundraising has proponents singing its praise and opponents pointing out its pitfalls. It has been found that when potential donors are approached by friends and relatives, donations tend to be larger than if the donors had been approached directly by the non-profit. Using this grassroots approach, even if a friend or relative has never heard of the non-profit, they are more likely to contribute and lend their support to the cause. In fact, the success of crowd fundraising relies upon the power of personal connections and the ‘crowd’ of ambassadors who become involved in the campaign.
Yet at the same time, some experts caution that relying on personal connections is short-sighted, pointing out that the new online platforms do not take into consideration the lifetime value of a donor. While friends or relatives may initially give because they are asked to, they are not necessarily invested in the cause – an element most traditional fundraising bodies pay close attention to.
From the viewpoint of traditionalists, another issue with crowd fundraising is the restriction of having to use the money raised towards a specific purpose or goal, rather than the organization being able to allocate it freely for whatever is needed. While most non-profits are interested in general support, crowdfunding platforms are not set up that way. Furthermore, fundraising institutions claim that they have more expertise in handling large sums, in allocating funds according to need, and in overall administration.
Despite the naysayers, however, it is clear that in this digitally hands-on generation, crowd fundraising is picking up steam and allowing artists, innovators, charities, organizations, and anyone at all to easily launch an online fundraising campaign and to gather support from a growing number of fans who in turn help raise money for the cause.