Crowdfunding for nonprofits is an incredible opportunity to rally support and raise funds for specific causes. In recent years, it’s become a powerful way to connect with donors worldwide, making a big difference even with small contributions. For example, in 2023, nonprofits in the U.S. raised an average of $9,237.55 per campaign, proving just how powerful crowdfunding can be.
The global crowdfunding market is growing rapidly and is expected to hit $1.20 billion in 2024. With an average of $8,150 raised per campaign, who says crowdfunding won’t be the trend of the decade?
This guide covers everything you need to know about crowdfunding for nonprofits:
- A simple introduction to crowdfunding and how it works;
- Top strategies for scaling up your fundraising initiatives;
- The best donation platforms to use;
- Helpful tips for engaging your supporters.
How Does Crowdfunding Work?
Crowdfunding, as the term suggests, is the process of raising funds from a group of people, usually through online platforms. If you’re a community leader wondering, “how does crowdfunding work?” you’ve already taken the first important step.
As online fundraising continues to grow, crowdfunding for nonprofits is expected to be a major trend in the next decades, attracting not only organizations but also individuals and corporations.
Before you get started, you’ll need to decide between crowdfunding and peer-to-peer fundraising. While they have similarities, they differ in many ways. We’ll be looking at these differences and asking five important questions:
1. What are Peer-to-Peer and Crowdfunding campaigns?
Both are methods of fundraising that use personal networks and social media sharing.
Peer-to-Peer: Volunteers create their own fundraising pages and ask their friends and family to donate. The funds collected go to the nonprofit.
Crowdfunding: An organization or individual sets up a single page for a specific project, and all donations are made through this page.
2. Who Uses Each Type of Campaign?
Organizations can run both types of campaigns, and so can individuals.
Peer-to-Peer: Typically run by organizations due to the need for more resources and volunteers.
Crowdfunding: Can be run by both organizations and individuals for one-time projects or expenses.
3. How Do They Work?
Both types of campaigns involve setting a fundraising goal and creating a central page that explains the cause.
Peer-to-peer: This requires creating individual participant pages, recruiting and training volunteers, and encouraging them to reach out to their networks. It involves more upfront work but can attract more donors.
Crowdfunding: This method focuses on promoting a single donation page through social media and other channels. It requires less pre-planning but requires consistent promotion to keep the campaign active.
4. What Do You Need to Get Started?
Crowdfunding: Only a fundraising page on a suitable platform is required.
Peer-to-Peer: More software, planning, and staff to manage the campaign and train volunteers.
5. Which Should You Choose?
It depends on your organization’s size, resources, and goals:
Peer-to-Peer: Best for larger organizations with enough staff and engaged supporters, especially if you’re planning a complex, ongoing campaign.
Crowdfunding: Ideal for smaller organizations or individuals, especially for one-time projects or expenses.
You might find that both methods work well for different needs. Crowdfunding is perfect for quick, one-time fundraisers, especially if you have a small team, a big audience, and need a simple solution. It’s ideal for community leaders working on specific projects, like education or youth programs, offering an easy way to get the funds you need and connect with supporters.
Crowdfunding addresses frustrations like limited access to grants and complex application processes, providing a straightforward path to reaching fundraising goals. Remember to thank your donors and participants to keep them engaged and motivated.
This method helps address frustrations like limited grant access and complex applications, providing a clear path to reaching your fundraising goals. Remember: always show appreciation to donors and participants to keep them supportive.
Ready to make a difference? Start your crowdfunding campaign today and help us build a brighter future for Miami County. Your support matters!
Crowdfunding Strategies and a Look at the Best Donation Platforms for Nonprofits
Finding the best donation platforms can help your organization reach more individuals and raise more funds through campaigns. That’s why choosing the right site is a top strategy for crowdfunding for nonprofits. These tips will help you learn crowdfunding techniques and hit your fundraising goals.
A. Get clear on your goals.
The first step in a successful crowdfunding campaign is to plan ahead. Decide exactly what you want to accomplish. How much money do you hope to raise? How many donors do you want? Do you want one-time donors or recurring supporters?
Without these answers, you might get overwhelmed by small details once your campaign starts. One useful tip is to create a shared document that everyone on your team can edit. This helps avoid mix-ups and ensures no important details are missed.
For community leaders in Miami County, KS, aiming to fund education and youth programs, set realistic, specific goals. For example, aim to raise $10,000 to support 100 students in an after-school program.
B. Videos in your crowdfunding campaign? Absolutely.
Campaigns with personal videos raise 150% more than those without. Start by sharing a striking fact, then introduce the people or causes you’re supporting. Explain why you need the funds. This approach helps build an emotional connection with potential donors.
C. Share successful stories and testimonials.
Personal accounts are your greatest selling points. Here are some tips to make the most of testimonials:
- Highlight personal stories: Have the people you’ve helped share their struggles and how your nonprofit has positively impacted their lives.
- Show your impact: Share before-and-after stories to demonstrate the real difference your nonprofit makes, whether you’re helping people, animals, or communities.
- Include volunteer voices: If your nonprofit doesn’t directly serve people, ask volunteers to share their firsthand experiences.
You can also include testimonials in the videos to add a personal touch and create a strong emotional connection and trust.
D. Make every dollar count with matching funds.
Guess what? According to The Big-Give Research Initiative, 84% of donors are more likely to give if their donation is matched, and one in three donors would give a larger donation if matching is applied.
Identify regular donors who make large contributions and ask them to match donations for your campaign. To create urgency, announce that all donations up to a certain amount will be matched dollar-for-dollar within a specific time frame. You can also mention large donors in your campaign to give them visibility and encourage participation.
E. Show the real impact of donations, preferably in figures.
When donors see exactly how their contributions are making a difference, they’re more likely to give—and give more. Clearly specify how different donation amounts will be used. For example, $25 can supply school supplies for a semester, and $150 can fund a month of after-school programs for a child.
Add these suggested amounts to your donation form to highlight the impact of each contribution and turn one-time donors into recurring supporters.
F. Consistent Promotion: Keep Your Campaign Top of Mind
Use social media to spread the word. Posting once or twice isn’t enough. Aim for a regular schedule with diverse content. Tweet 1-2 times a day. Post on Instagram 4-5 times a week and mention the campaign in your stories. Do the same on Facebook.
Do you offer rewards for donors? Highlight these in your posts. While many donors are driven by the mission, some appreciate tangible benefits like a t-shirt or other perks.
Mention your campaign in each newsletter and email you send. It doesn’t need to be flashy, but it should be noticeable. Plan at least three dedicated emails: one to kick off the campaign, another halfway through as a reminder, and a final urgent call to action towards the end.
G. Choose the right donation platform.
If you’ve made it this far and understood the answer to the question, ‘how does crowdfunding work,’ you also know the importance of choosing the right crowdfunding platforms. Take your time to select one that fits your needs and resources. Here are the top 5 crowdfunding platforms we recommend for every nonprofit and community leader.
Fundly
Fundly is great for nonprofits, individuals, companies, and school groups. Setting up a campaign page is easy – you can customize it to match your brand and share it on social media. Features include mobile optimization, customizable donation pages, and fast payment processing. Fundly is free to set up, with a 0% platform fee and processing fees through Stripe.
Classy
Classy offers a fully customizable platform with lots of fundraising tools, including crowdfunding. You can create campaign pages without any coding knowledge. Key features include branded receipts, fundraising emails, impact blocks to showcase donor contributions, and a campaign activity wall. Pricing starts at $199 per month plus processing fees.
Fundrazr
Fundrazr makes it quick and easy for individuals and nonprofits to set up crowdfunding campaigns. You can add pictures, videos, and stories to your page and start raising funds right away. Features include personalized tips to improve your campaign, live analytics, wishlists for specific needs, and donor perks like t-shirts. Fundrazr has no setup or monthly fees, with plans ranging from 0% to 5% platform fees plus processing fees.
GoFundMe
GoFundMe is a very popular platform, having raised over $9 billion worldwide. Nonprofits can create campaigns with features like in-platform email and text messages, social sharing, no minimum amount required to keep funds, no time limit, and the ability to withdraw funds anytime. There’s a 2.9% + $0.30 processing fee per donation.
CauseVox
CauseVox helps nonprofits create targeted appeals with featured videos and images. You can share crowdfunding campaigns on Facebook, Twitter, and by email while tracking donations. Features include campaign goal meters, recurring donation options, automatic email updates, personalized messaging, and daily activity summaries. CauseVox offers a basic plan with unlimited crowdfunding pages for a 0% platform fee, with more features in higher-tier packages.
Crowdfunding for Nonprofits: Conclusion
Still think crowdfunding for nonprofits isn’t essential? Crowdfunding has become an essential part of fundraising for nonprofit organizations. It has reorganized the way organizations connect with supporters, raise funds, and create genuine impact.
By following the principles, strategies, and best practices described in this guide, Miami County, Kansas, nonprofits can use crowdfunding to advance their missions, involve their communities, and promote sustainable change. Whether funding educational initiatives, youth programs, or other community projects, crowdfunding offers a simple and effective way to reach their goals and a wider audience.
Interested in learning more or contributing to our cause? Contact us with any questions you may have. With just a few clicks, you can transform the lives of our community. Join us in making Miami County a better place for everyone.