Is crowdfunding for your charity? Heloisa Righetto talks about this digital fundraising trend
Crowdfunding came to the fore around 10 years ago: it was mostly used by artists, musicians, writers and creatives as a way to fund their work without relying on contracts or compromising their content or product. Crowdfunding means funding a project by getting donations from a large group of people through a system of pledges and rewards, and it is predominantly done online. Although it is not a novelty, it is still an underused tool for charities.
Why, as a charity leader, you should pay attention to crowdfunding?
Charity Digital News recently classified crowdfunding as an ‘on the horizon’ fundraising trend for small charities, mentioning a report by Nesta from 2016, which shows that it makes up less than 0.5% of giving the UK. Although this number might have gone up since then, it still can be perceived as a huge potential for charities that are trying to find ways to diversify their income, especially because 65% of charities are worried a lack of skills means they will miss out on opportunities for digital funding.
However, crowdfunding should not be considered as just a fundraising project. As the name states, crowdfunding is all about the crowd. Not only the ‘external’ crowd, those that will back it but also, and more importantly, the ‘internal’ crowd: your staff, volunteers and trustees. That’s why crowdfunding is a community project. For a small charity, apart from the obvious objective of raising funds and awareness towards your cause or campaign, crowdfunding is an excellent way to bring your community together and highlight the sense of belonging, of being part of a team with a common purpose. As CharityComms recently reported, creating community emphasises that success requires everyone to play a part.
What resources do you need?
Crowdfunding is different to a donation drive or someone’s personal fundraising. Behind a successful crowdfunding campaign, there is a project, just as there is in any bidding for grants. The main difference of the crowdfunding is the pledge/reward system: the ‘donor’ gets something back from their donation. This can be tricky, as charities do not crowdfund to create or produce a tangible product that will be sold afterwards (which is usually what crowdfunding is used for). And this is where the community makes a difference: think about how to make people feel they are part of a greater good, of the project you are building. Participation in a closed Facebook discussion group? A private Q&A session with sector specialists? Their names on your website? Subscription to a newsletter with first-hand news of the project?
You also need to be clear about what will be done with each pledge, and that you offer a range of pledges that will make people feel they are an important part of the project way if they are pledging £10 or £100.
A vital step of the crowdfunding project is choosing a platform that will give you all the necessary tools to build a personalised page. Here it is important to highlight that a crowdfunding platform is not the same as a fundraising website such as JustGiving or MyDonate. Although there are plenty of well-known crowdfunding platforms such as Kickstarter and Indiegogo, it might be better – at least for your first crowdfunding project – to work with a platform specialised in charities, such as GlobalGiving. Although GlobalGiving requires an application to join, once you are in you will have access to a plethora of information, from training webinars to project and planning templates. As in any other crowdfunding platform, you need to create all the content for your project, but you will have personalised guidance at a reasonable pace.
Important: most crowdfunding platforms charge administrative fees, make sure you know the additional costs to your project, so you can calculate your pledges and rewards accordingly.
Launching the crowdfunding campaign does not mean that the work is done. A common mistake is to launch the campaign and leave it there, awaiting backers. It sounds like basic advice, but as we are so involved with a project and/or a cause, we tend to think that everyone else will ‘get it’ too and automatically back it. It is crucial to have a communications strategy to promote it, and here you will need the support of you ‘internal’ crowd. Everyone on your staff and board needs to get involved. You need to enable them to be crowdfunding ambassadors, be it providing digital materials (such as images and cards to be shared on social media and messaging apps, email templates to be sent to family and friends) or organising a friendly competition to see who gets the most backers.
During the campaign, make sure you send regular updates to backers. Remember the keyword: community! Engaging with backers by providing useful information enhances the idea of community and encourages them not only to become ambassadors of your campaign but also to back more than once. Once the campaign is finished, this communication must go on. Send updates about the project and make your backers know the difference their pledge made. And, of course, make sure the rewards are delivered.
Key takeaways:
- Have a project
- Find a suitable platform
- Treat is as a community project
- Prepare a communications strategy
- Engage staff and board
- Engage with your backers
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