How crowdfunding can improve nonprofit fundraising efforts

Many nonprofits are turning to crowdfunding sites to help raise money.
Date Published
03/23/2015

Nonprofit fundraising is seemingly a round-the-clock endeavor. Before one campaign ends, charitable organizations are already preparing for the next one to keep donors engaged, interested and of course, lending their financial support. As is the case with a wide range of business areas, nonprofits can use technology to improve campaigns and drive an increased amount of donations.

Crowdfunding strategies have become increasingly common inside of nonprofits. This method provides a modernized way of raising money, while appealing to both technically savvy and more traditional donors. According to The Fundraising Authority crowdfunding websites allow nonprofits to launch online fundraising campaigns and link them to their own hosted websites that allow constituents to make contributions over the Internet.

Not only does this streamline the giving process, but 501(c)(3) organizations don’t have to worry about enlisting the help of a third-party company to process donations made using a credit or debit card. The crowdfunding site automates this process, allowing nonprofits to receive the money directly.

In an infographic created by Craig Newmark of craigconnects, in 2013, crowdfunding sites raised $5.1 billion worldwide. In addition, peer-to-peer fundraising donations increased 50 percent, while P2P giving grew by 60 percent. Since the average donation made via crowdfunding is $88.22, it makes sense for nonprofits to tap into this new revenue stream.

In essence, crowdfunding offers a win-win scenario for both digital donors and the charitable organizations they engage with.

Helpful tips for choosing a crowdfunding platform
For nonprofits looking to launch a digital campaign using a crowdfunding website, there are a number of helpful tips to ensure that this process goes smoothly. The Fundraising Authority wrote that charitable organizations should select a platform that is easy to use and integrates seamlessly into an already established donation page.

It’s also important to consider whether the crowdfunding site supports social media sharing. This allows 501(c)(3) groups to spread the word about their campaigns to help raise awareness and of course, funnel in more donations.

Lastly, it may be wise for nonprofits to use crowdfunding as a way to elicit a sense of urgency in donors, Frogloop wrote. Because campaigns of this kind usually only have a short run, this can spur people to give before the opportunity expires.

Although still in its infancy regarding use, it is not unreasonable to assume that crowdfunding will become a major part of nonprofit fundraising efforts in the future. 

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