Were you recently invited to donate to a friend’s Gofundme account, or have you participated in a colleague’s Kickstarter campaign? If so, you are not alone. Crowdfunding, the process of raising small contributions from a large number of people for a specific project facilitated through websites, has exploded over the years. And websites like Indiegogo, Crowdrise and Start Some Good, as well as Gofundme and Kickstarter are the leading conduits to helping people get more money.

According to Crowdsourcing.org, an estimated $34 billion world-wide was raised in 2015 alone through sites like those mentioned above. You can only imagine how that amount has risen in the past three years. But did you know that your not-for-profit organization could benefit from crowdfunding?

crowdfunding 2015

Source: Massolution/Crowdsourcing.org 2015CF Crowdfunding Industry Report

Not-for-profits are jumping on the crowdfunding bandwagon as a way to increase fundraising for a variety of program initiatives. Because the crowdfunding sites allow organizations to set up an online fundraising page and accept money directly from that page, it works best for specific projects or campaigns and not general fundraising like annual drives.

To get the most out of your crowdfunding campaign start by doing the following:

  1. Create a compelling page. Attract new donors by explaining why your mission is necessary. With lots of competition for donor dollars, selling is the key and you need your project to stand out. Use pictures and videos to tell a story that pulls at the donor’s heartstrings and immediately grabs their attention. State exactly how much you need and how the money will be used.
  2. Leverage your own network. Reach out to everyone you know and tell them about your campaign! Ask those contacts who you already know, including current donors, volunteers, staff, board members, and stakeholders, to add a personal invitation and invite others to contribute! You won’t get donations from outsiders until you show that you have traction from your own network.
  3. Promote the campaign. Publicize your crowdfunding campaign as much as possible! Make sure you promote the campaign on social media channels and on the home page of your website. You can also share the reason why you are doing the campaign with the local media in hopes of them covering your organization as a human interest story to show how your organization has touched the lives of others in your community. Take every opportunity to spread the word about your crowdfunding campaign and get people talking about your project.

Crowdfunding can really help not-for-profits raise capital. Before you kick-start your campaign, check out projects currently listed to see what types are getting funded and which ones are not. Doing so will give you an idea whether or not your fundraising campaign has a good chance of getting funded through crowdfunding.

For more information, contact our nonprofit specialist, Edward Yoder, CPA, MSA.