Crowdfunding for Nonprofits

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Crowdfunding for Nonprofits

Crowdfunding programs like Kickstarter are all the rage right now. From video games to documentaries and even new inventions, people can use crowdfunding to create all sorts of different products or goods. However, crowdfunding can also be used by nonprofits to fund their activities. But how financially viable is crowdfunding? Is it actually an efficient way for nonprofits to generate funds?


According to Give Local America, the answer is yes. Give Local America is a crowdfunding campaign that helps to gather funds for nonprofits, and the folks organizing it recently broke down some data about their crowd funding process to better understand who gave and if they gave a substantial amount. Last year, Give Local raised more than $53.7 million for nearly 8,000 nonprofits. Most of the donors who were involved in the crowdfunding process were female, college-educated, use smartphones regularly and were most likely homeowners. Forty two percent were between the ages of 55 and 74, and 62 percent had a net worth of $250,000. Many of the donors were very generous, and it was typical for the average donor to support multiple charity programs. For example, over 19 percent gave more than one financial gift, and the largest maximum value of donations by one donor totaled $63,000, and the largest single online donation totaled $50,000.


Crowdfunding programs can help a nonprofit appeal to large segments of the population who are tech-friendly and who are also eager to give. Furthermore, because many crowdfunding programs offer rewards to donors who give certain amounts, these types of programs can actively attract larger groups of individuals then traditional donation programs alone. While crowdfunding programs probably should not be used in lieu of traditional charity programs, crowdfunding can be used to supplement a nonprofit’s income and pull in additional working cash. Additionally, crowd-based platforms don’t have to be used to solely gather financial donations—they can also be used to gather product donations. Good360’s Wishlist platform allows a nonprofit to create a wish list of products or items that they could use to support their programs and mission. The nonprofit can then promote the list on social media, which gives donors both large and small a chance to chip in and provide the funding needed to ship the items on the list to the nonprofit.


Crowdfunding can be extremely useful for a nonprofit with a tight budget. Aside from helping them to gather additional funds, crowdfunding can also act as a very efficient public relations tool. Here are a few tips from Miratel Solutions Inc. on how crowdfunding can be used in order to boost a nonprofit’s public relation image.


Firstly, crowdfunding can be an excellent means for a nonprofit to increase engagement with its supporters and donors. For example, most crowdfunding programs require its organizers to stay in touch with supporters, post alerts and updates to social media, relay news about rewards, and also spread the word in order to pull in additional donors. Because of this, crowdfunding allows nonprofits to further engage with its supporters on a more advanced level aside from the occasional social media post or website article.


Crowdfunding can also help a nonprofit to spread awareness about its brand and objectives. In order to pull in more donors for a crowdfunding program, organizers often blast news and updates about the program on all of their organization’s social media channels, which helps to build total awareness. Furthermore, if the program is particularly noteworthy, it’s entirely possible for it to go viral, which can really help to spread awareness about a nonprofit and its overall mission. Remember the ALS Ice Bucket Challenge?  According to the ALS Association, more than 17 million people around the globe uploaded a challenge to Facebook, the videos were watched by more than 440 million people and the best part, over $100 million dollars was donated in support of ALS.


Lastly, crowdfunding can be used as a networking tool. The best crowdfunding programs pull in hundreds, and sometimes thousands of supporters from across the world. Since most programs require a heavy amount of engagement via updates and comments, crowdfunding can serve as an excellent way for a nonprofit to connect with new donors or notable supporters.


Though the main goal of crowdfunding will always be to help a nonprofit generate additional funds, it can also serve as an excellent media and public relations tool. If you belong to a nonprofit, and you’re looking to increase your supporters, then consider starting a crowdfunding program today.

Shabab Gruberg is the CEO and President of Good360. He developed the largest online product philanthropy platform, GivingPlace, connecting charities, companies, and people who care. Think 4 million diapers, 10,000 mattresses, and 8,000 cartons of apparel in 2014 alone. His passion is solving problems, and there is no problem too big or small. He has consulted over 150 nonprofits, optimizing their business development, developed a system and process to take off-line medical offices online over a weekend, and spent years teaching community college students Linux.
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