Fundraising 101: What is crowdfunding?
Are you looking for fundraising opportunities to boost your charity’s income (for relatively little effort), online? Of course, you are!
Let’s introduce you to crowdfunding.
Crowdfunding is a great way to raise funds in the digital space. What’s more, the online world is vast, providing access to more people than you can connect with in the ‘real world’ – so the pool of potential donors is, well, endless.
Intrigued? Let’s take a walk through the world of crowdfunding to see how it can help your charity with your fundraising efforts.
What is crowdfunding?
Crowdfunding is a way to raise money via individual contributions from a large group of people – a crowd, if you will.
It’s a popular method for entrepreneurs and small businesses to raise capital for new projects and ventures. But it’s not exclusive to profit-led organisations. Many charities have run successful crowdfunding campaigns, and so can yours.
There are 4 types of crowdfunding:
● Rewards: Donors receive something in return for their donations - something to incentivise them to contribute to the cause.
● Equity: Campaign hosts offer a stake in the business/project in exchange for contributions.
● Debt: A form of P2P (peer-to-peer) lending where the money received is repaid with interest.
● Donation: Donors contribute to the campaign expecting nothing in return.
Obviously, when it comes to charity, people donate to support worthy causes, so equity and debt crowdfunding are irrelevant.
Naturally, donation-based crowdfunding is the ideal way to crowdfund but offering an incentive for donations is not a bad idea if the uptake is slow. Rewards can entice bigger donations from a larger number of people.
What do we mean by incentive? Maybe donors are entered into a raffle with the chance to win a prize. This could be anything from a gift voucher to dinner at a fancy restaurant. The prize doesn’t necessarily have to cost either. If you pitch it right and offer the company promotion, you may well find they’re open to donating something to help you raise funds.
Something to think about, right?
Popular Crowdfunding Platforms
Online crowdfunding became mainstream in the late 00’s, and a tidal wave of platforms have sprouted up from the virtual ground since, to make fundraising dreams a reality.
Kickstarter, GoFundMe and Patreon are a few of the big players in the industry. But be cautious when choosing your platforms, as they’re not all suited to charity crowdfunding.
To save you googling, here’s a list of the best options for charities and the advantages of crowdfunding on them:
You can add projects and prize draws
It accepts Nectar points
Zero platform fees
The money raised goes directly to your charity’s bank account
JustGiving Crowdfunding for Good
No cause is too big or small
Zero platform fees
The money is sent directly to your bank account
Fundraising for the social era
Optimised for mobile fundraising
You can raise donations through Facebook directly with integrated forms
You can easily create recurring donations
Collects donations via embeddable forms, fundraising pages and text messaging
Next generation crowdfunding for non-profits looking to make a positive impact
Fast, effective online fundraising with 0% fees
Examples of Successful Charity Crowdfunding
Still need convincing that crowdfunding is a great way to boost donations? Check out these success stories!
Food Bank Aid vs The Cost-of-Living Crisis
North London based charity, Food Bank Aid, launched a 36-hour emergency crowdfunding campaign in March 2022, in support of 20 local food banks that have seen a 25% increase in customer numbers due to the cost of living crisis.
In a matched crowdfunding campaign launched on Charity Extra, the appeal (at the time of writing) has raised 134% of its original goal - smashing the original £600,000 target to the tune of £792,081 and counting. Not too shabby!
Hospice Making Moments that Matter
In 2020, Noah’s Ark Children’s Hospice in London raised nearly a third of its previous year’s income in 36 hours.
The Moments that Matter campaign aimed to raise £1.2m to create special moments for seriously unwell children. They reached this target within 24 hours, and to date have raised over £2m towards their cause.
A shining example of what charity crowdfunding success looks like if there ever was one, don’t you think?
Ready to Crowdfund?
So there you have it. We’ve reached the end of our crowdfunding 101. Let’s recap on what we’ve learned.
We discussed what crowdfunding is. Established the different types of crowdfunding, and which are best suited to your charity’s fundraising efforts.
We looked at the best platforms for non-profits and a couple of successful real-life crowdfunding campaigns that’ve raised thousands for good causes.
If we’ve inspired you to start your own crowdfunding campaign and you’re in need of a fundraising expert to get the ball rolling, we can help. Call us on 0203 750 3111 to talk tactics.