New to crowdfunding? This article will help you decide if it is a good option for you.
Often, news stories focus on big, successful crowdfunding campaigns. Captain Tom Moore paced his garden 100 times and raised £32 million during the first wave of the COVID-19 crisis for the UK National Health Service (NHS). Other stories abound from modest campaigns that sprung into movements, and that is when they got picked up by the media. From the outside, it can seem like crowdfunding is an easy way to raise funds.
However, the wildly successful campaigns showcased in the media are the outliers. They are far from the norm, and organisations should think twice about counting on a wildly successful crowdfunding campaign as a central component of their fundraising strategy. Like any other funding path (institutional grants, impact investing, support from high net worth individuals, etc.), crowdfunding has its positives and negatives, and it may suit some organisations but not others. Even if the organisation is doing great work on the ground, it might not be well-positioned to launch a crowdfunding campaign successfully.
In the wake of the COVID-19 crisis, I worked on a crowdfunding campaign run by an international NGO. At the end of the eight weeks campaign, we raised over $800,000 to send emergency ventilators to hospitals in areas with overburdened healthcare systems. This was the first crowdfunding campaign of this size I’d been a part of, and I needed to learn fast. The project met an urgent need, and there wasn’t much time to get it right. Fortunately for those affected by COVID-19, it was fully funded.
This experience was a crash course in crowdfunding. It gave me a new appreciation for the opportunities and potential pitfalls when launching a crowdfunding campaign. This form of fundraising can be another tool in an NGO’s arsenal, but it’s not right for every organisation.
That leads me to the question of the day: What does a crowdfunding campaign require?
#1: A strong network
A strong network is critical to a crowdfunding campaign. The formula is simple: a large network will yield big results, and a limited network will yield small results.
But what do I mean by ‘network’? There are two potential pitfalls here. A common mistake is that people underestimate the size and reach of their network. They think they don’t have the right connections or don’t have enough connections even when they have a wide range of people willing to support them. So, they give up before even starting.
On the other hand, another potential pitfall is that people often overestimate the size of their network. They might think their friends, family, and acquaintances will be as passionate about a specific cause as they are, which leads to disappointment and frustration when the donations don’t come pouring in.
The reality is probably somewhere in the middle. Everyone has a network, and the people in that network are generally friendly and helpful, but it doesn’t guarantee they will donate to your cause or that they will share information with their networks.
#2: A targeted message
These days, everyone is continuously bombarded with places to spend their money. Your cause, even as important and meaningful as it is, might be perceived by others as just another voice in the never-ending chorus.
As crass as it might seem, you are selling a product just like anyone else. Companies are trying to convince people to buy the latest smartphone, designer handbag, or buy a vacation in the Maldives—and you’re trying to convince people to buy into your vision of creating positive social impact.
To show potential donors why they should give $5 to you, especially over the thousands of worthy causes out there, you need to compel them with the right message. This requires a combination of using the right words, images, and connecting donors to the cause and showing them why they should care. This is a larger topic, which is covered in detail in the Step change: a roadmap for new fundraisers series.
#3: Access to appropriate channels
The channel(s) through which you deliver your messages also matter. Whatever platform you use needs to reach the people who would be most likely to donate to your cause.
For example, Baby Boomers are more likely to see campaigns on traditional media and Facebook, while Gen X and Millennial audiences may be better targeted via Instagram, and Gen Z prefers platforms like Tik Tok and Snapchat. Baby Boomers more often trust and click on paid advertisements, while Millennials and Gen Z are more likely to skip the ad. Still, they will respond to product placement or endorsements from their favourite influencers. Depending on which group you want to reach, you will have to use a different channel and, of course, tailor the message accordingly.
#4: A mailing list
While social media is good for promoting a crowdfunding campaign, there is a lot of noise on these platforms. Sending an email is still a relatively more consistent way to make sure people see your message, and it feels more personal than a social media broadcast. Recipients are also less likely to flick past it like they would on social media.
However, it can be challenging to get people to agree to be on a mailing list (and you should get their consent for both legal and ethical reasons) because the inbox is sacred space. I recommend starting a mailing list as soon as possible and asking people to sign up. It will take a while to build a healthy list of people who are genuinely interested in what you do and want to support you, but that list could very well be the difference between a successful fundraising campaign and a total failure. Plus, you can keep the list for future campaigns and media outreach. (Be sure not to spam people… Monthly updates are more than enough!)
#5: Champions, influencers and/or advisors
A huge part of successful crowdfunding is maintaining the human touch while scaling up to reach a broad audience. However, most of us don’t have a massive audience, nor do we have the time or inclination to build one.
Some people already have built-in audiences and who can be considered ‘influencers’ (apologies for the overused word, but it does seem most appropriate here). Typically, we think of influencers like social media personalities, but influencers could also be religious or community leaders, or teachers who can mobilise other teachers, parents, and students. Due to their role in the community, these people have more connections than the average person, and a relatively large number of people know about that person (and trust them).
These people, whether they support you as champion, influencers, or advisors, will broadcast your message to more people and build trust in ways that you might not be able to do on your own. Therefore, it makes sense to put in the effort to identify, connect with, and mobilise these people.
Knowing this, are you still interested in moving forward with crowdfunding? If so, check my blog or follow my mailing list for more advanced advice. For now, I’ll leave you with a few points of encouragement and advice:
Set reasonable goals: While it’s tempting to want to raise all the funds your organisation will need, it’s simply not realistic. Convincing potential donors to reach for their wallets isn’t easy; it requires establishing a relationship and building long-term trust. They may not donate right away. In fact, many people may not donate until the second, third, or even tenth campaign. But you shouldn’t give up on them just because they are reluctant to donate right now.
Every time you launch a campaign, you will improve your messaging, reach, and efficiency. By setting reasonable goals for the current campaign, you are less likely to become discouraged or seem desperate.
Prepare for a marathon, not a sprint: Expect to do multiple fundraising campaigns, perhaps one every year, or once every couple of years. That means you shouldn’t push so hard that you burn out and get frustrated during the first campaign, and you also shouldn’t burn bridges with potential donors by being too pushy. Keep gathering ideas, pay attention to what works, and be patient.
Don’t put too much emphasis on the money: It’s important to remember that a crowdfunding campaign has nonmonetary benefits including mobilising support, publicising information about your organisation, and spreading awareness about the cause.
Crowdfunding is some combination of art, a science, and a lot of patience. These tips are just the start of what will surely be a challenging but hopefully, ulitimately productive process.
Want to see examples of successful crowdfunding campaigns? This page does a deep dive on eight case studies.
Have you tried crowdfunding? What were the successes and failures of your campaigns? Do you have questions about crowdfunding you’d like to see addressed? Leave a comment below.