Nonprofits can host crowdfunding and peer-to-peer fundraising campaigns to raise money and share their mission and cause. Crowdfunding for nonprofits is popular with younger donors.
Nonprofits that hold crowdfunding campaigns have a greater chance of raising money from these donors and reaching a larger audience.
In this article, we'll discuss the pros and cons of crowdfunding, common uses, and the steps to host one of your own.
What is Crowdfunding for Nonprofits?
Nonprofit crowdfunding campaigns let organizations raise small amounts of money from many people online. Nonprofits can set a fundraising goal, share a cause, and connect with donors and an entirely new audience who cares about their mission.
Crowdfunding for nonprofits can help build and strengthen donor relationships. Organizations that offer incentives, share updates on campaign projects and programs, and send personalized acknowledgments are starting on the right foot.
Pros and Cons of Crowdfunding for Nonprofits
Global crowdfunding raised $1.41 billion in 2023, and this amount is expected to double by 2030. Clearly, crowdfunding isn't going anywhere. Nonprofits of all shapes and sizes must understand the pros and cons of these fundraising campaigns.
Pros
Reach a larger audience
Crowdfunding campaigns help nonprofits reach more donors and increase their donor base.
More awareness and broader engagement
Smaller nonprofits can use crowdfunding campaigns to connect with potential supporters worldwide.
Cost-effective
Social media donor outreach and fundraising are free, and many online fundraising platforms that offer crowdfunding are more affordable than other marketing options.
Speed
Most successful crowdfunding campaigns last 30 days or less. In that time, nonprofits can raise significant funds.
Donor relationships
Many crowdfunding donors are new to the organization. These campaigns allow nonprofits to share their mission and build strong relationships with new donors.
Cons
Platform fees
Many online fundraising platforms require fees to host crowdfunding campaigns
Highly competitive
The popularity of these campaigns means more of them and a highly competitive environment for nonprofits.
Takes significant effort
Nonprofit crowdfunding campaigns take significant planning, marketing, and management. Volunteer-led organizations may not be able to run such a time-consuming fundraising activity.
Must have a robust online presence
Not all nonprofits will have the same success with these campaigns. Organizations and their volunteer fundraisers must have a solid online presence to get the most out of crowdfunding campaigns.
Common Uses of a Nonprofit Crowdfunding Campaign
While they won't work with every fundraising campaign, there are a few projects and causes that benefit from crowdfunding campaigns, including:
Individual Needs
Crowdfunding and peer-to-peer campaigns have quickly become popular to raise money to cover individuals' medical costs, educational needs, and other debts. Fundraising platforms like GoFundMe have made it easy for anyone to raise funds quickly from their friends and family.
Disaster Relief and Humanitarian Aid
Some of the most successful crowdfunding campaigns raise funds for emergency disaster relief. Events bad enough to end up on the news have increased publicity and inspire more people to get involved. Funds raised from these campaigns can help with emergency response efforts and support communities in need.
Advocacy Campaigns
Nonprofits can hold crowdfunding campaigns to support the organization's advocacy efforts. Organizations can spread awareness to raise funds, encourage more people to support their cause and push for legislative changes.
Scholarship Programs
Another reason to run a crowdfunding campaign is to raise funds for individual scholarships. In addition to raising funds for underprivileged students, nonprofits can raise funds for educational initiatives and materials.
Capacity Building
New nonprofit organizations can hold crowdfunding campaigns to ensure their sustainability. Nonprofits with an online following or missions that address a well-understood issue or cause can raise money for administrative costs and staff salaries.
Capital Campaigns
Nonprofit organizations run capital campaigns to purchase land, develop a new building, or fund other costly items and programs. Organizations running capital campaigns can also use crowdfunding to raise money and spread information to their donor base.
2 Real-Life Examples of Successful Crowdfunding Campaigns
University of Montreal
The University of Montreal's Faculty of Medicine and the Montreal Neurological Institute started a crowdfunding campaign in 2020 to raise funds for research on Multiple Sclerosis. When the COVID pandemic hit Canada, their campaign had to move entirely online. Thanks to Zeffy's 100% free fundraising platform, the campaign was able to surpass its fundraising goal of $70,000 and raised over $320,000.
#YesSheCan Campaign
The #YesSheCan Campaign was founded in 2016 to prepare young people for college with the tools, knowledge, and training. #YesSheCan's leader, Zaniya Lewis, struggled when applying for colleges and finding scholarships and jobs to fund her education. She strives to make sure other young people don't suffer from the same issues.
For years, the #YesSheCan Campaign used GoFundMe to accept donations online. In 2022, they found out about Zeffy's entirely free fundraising platform. They were also happy to use Zeffy to send automatic tax receipts to ensure donors that their data was safe. Today, this organization has raised over $100,000 in donations and grants and continues to use Zeffy's crowdfunding and other nonprofit tools.
9 Steps to Start Your Own Nonprofit Crowdfunding Campaign
Crowdfunding can take knowledge and hard work, but the following steps will help your organization stay ahead of the game.
1. Determine your Fundraising Goals and Timeline
At the beginning of any fundraising campaign, deciding on a fundraising goal and timeline is crucial. In many cases, organizations can use past campaigns to set realistic fundraising goals. If your organization has never hosted a crowdfunding campaign, you can also look at other organization's crowdfunding efforts.
Before deciding on your campaign's goals and timelines, there are a few things to go over, including:
- Clearly outline your cause and fundraising strategy
- Understand your donor base and potential online audience
2. Choose the Best Structure
No two crowdfunding campaigns are the same. Your organization's fundraising success will depend on the purpose and structure of your campaign. The following examples are ways your organization can raise more funds online.
Donations only
Most crowdfunding campaigns rely on individual donations. Your nonprofit must create a fundraising page and convince supporters to create donation pages of their own. Your fundraising page can focus on one-time donations or recurring donors. You can also double the impact of these donations by including ways to find matching funds.
Once you've created your fundraising page, you can start a peer-to-peer campaign and encourage other donors to spread the word about your campaign.
Item Sales
Another way your nonprofit can crowdfund is by selling branded t-shirts. Your organization can share a cause or a well-known slogan, design, print t-shirts, and sell them on Zeffy. You can also use an online tool like Bonfire to print them for you.
Fundraising Event
Fundraising events like 5Ks and other sports activities are excellent opportunities to use a crowdfunding campaign. New and existing supporters can participate in your event and share your mission and campaign on social media to collect pledges and donations. You can use Zeffy as an event registration platform and add a peer-to-peer fundraising form for your campaign.
3. Choose a Crowdfunding Platform
After you choose a fundraising structure, you must find a fundraising platform that offers what you need. When researching online fundraising platforms for your crowdfunding campaign, there are a few items to keep in mind:
- Do they offer crowdfunding or peer-to-peer fundraising?
- What other fundraising tools do they have?
- What are their payment processing fees?
- Do they have a way to collect donor details?
- Can you integrate with other third-party fundraising tools?
- Can you collect recurring donations?
Read our expert insights on the most effective online fundraising platforms here →
4. Craft a Compelling Story
Storytelling is a nonprofit's greatest fundraising tool. If you can share a compelling story with new and existing donors, you'll have a greater chance of finding success with your crowdfunding campaign. Keep these things in mind when crafting your nonprofit's story:
- Share personal beneficiary stories
- Include photos and videos
- Clearly show the campaign's impact
- Show how donor funds will be utilized
5. Create your nonprofit crowdfunding page
Your nonprofit's story should be added to your crowdfunding page along with the following details:
- Details about your mission and the impact of the campaign
- Amount needed and how funds will be used
- A clear call to action
- A fundraising thermometer
Make sure you keep these details simple and tangible for the donor.
6. Form a Fundraising Team
Once you have a crowdfunding page for the organization, it's time to find a few volunteers willing to create their own fundraising page and share it with their friends and family. This way, you'll have a more extensive reach on social media.
Here are a few ways to encourage more campaign ownership from your supporters:
- Find a few followers with a substantial online following
- Start a competition and offer incentives to encourage more participation
- Train them on how to crowdfund
- Provide detailed program and campaign information
7. Marketing Promotion
Crowdfunding campaigns are only as successful as the nonprofit organization's marketing strategy. Nonprofits must use Various marketing channels to promote the campaign and find more fundraisers. The organization's marketing efforts must also include regular updates on the campaign. When running a crowdfunding campaign, there are several ways to market and promote your campaign, including:
- Social media platforms
- Website banners
- Text-to-give messages
- Flyers and posters with QR codes
8. Monitor and Adjust
Remember to track your crowdfunding campaign's performance as the campaign continues and adjust your strategy based on response.
- If you're having difficulty raising money, decide if a contest is necessary to entice more supporters to raise funds with their own fundraising pages.
- Send regular updates and monitor your social media posts to see which have received the most comments.
- Respond to all comments and questions online.
9. Send Appreciation and Follow-up
Before, during, and after your crowdfunding campaign, it's vital to show that your organization appreciates volunteers' and donors' participation.
There are several ways to do this, including:
- Automatic tax receipts when donors give
- Sending personal acknowledgments
- Share the impact of their crowdfunding efforts online
- Send regular updates
- Thank fundraising volunteers publicly
- Continue to build donor relationships with emails, phone calls, and personal contact
3 Common Pitfalls to Avoid
In addition to following the above steps, there are three common pitfalls you must avoid.
1. You've Chosen the Wrong Time for Your Campaign
A nonprofit crowdfunding campaign's success greatly depends on reaching a larger audience online. The time of year you run a campaign may significantly affect how many people you can reach.
International Giving Days
International giving days like #Giving Tuesday have many followers, but there is also increased competition for followers' attention.
At the same time, days like International Women's Day have a specific cause that followers feel strongly about. You can gain more new donors if your organization's mission matches this cause. Ultimately, you must decide if the opportunity outweighs the risk of overstimulation.
Major News Stories
The same can be said for stories that gain attention from the media. Disaster relief campaigns can use the publicity from the news to raise more funds, but many organizations will do the same thing.
2. Your Campaign Doesn't Give Them a Reason to Share
A significant part of crowdfunding marketing is encouraging supporters to share your campaign.
Create a Sense of Urgency
Donors are more likely to give when there is a time limit, whether naturally imposed or created by your nonprofit. Nonprofits can create a sense of urgency with deadline clocks and fundraising thermometers. They can also add matching gifts and competitions to offer greater rewards for reaching the fundraising goal in time.
Matching Gift Programs
Adding matching funds to your campaign can double the impact of each gift. Matching employer gifts is one of the easiest ways to do this. Companies, like Double the Donation, provide updated lists of companies that match employee gifts.
Another type of matching gift campaign can raise even more funds. Nonprofits can find a major donor or sponsor willing to pledge a significant amount if they can raise the same from new and existing donors. Not only do organizations benefit financially from this type of matching gift, but also excite donors into sharing your story.
Fundraising Competitions
Fundraising competitions are another way to inspire more participation in your campaign. Before sharing your fundraising page on social media, you can find a prize to entice supporters to participate. Make the competition public to gain more volunteer fundraisers.
You must also regularly share updates on how much each volunteer has raised and who is currently winning the competition. Volunteers can add a fundraising thermometer to their crowdfunding pages to make it easier for you to monitor the contest.
3. Donation Form is Too Complicated
Keep your fundraising page simple to ensure you don't drive donors away. The best way to inspire higher conversion rates is to:
- avoid asking too many questions on donation forms
- make it easy to find on your website
- include donations amounts that match donors' interests and ability to give
3 Best Nonprofit Crowdfunding Platforms
One of the steps needed to start a crowdfunding campaign is finding the right crowdfunding platform. The following three crowdfunding platforms are best for various nonprofit needs and financial abilities.
Zeffy
Zeffy is the only 100% free online fundraising and donor management platform. US and Canadian nonprofit organizations can use this tool to collect online donations, run peer-to-peer campaigns, and sell tickets and products.
Key Features:
- Peer-to-peer campaigns
- No sign-up, monthly, platform, and processing fees
- Automated tax receipts
- Accepts credit cards, ACH, Apple Pay, Google Pay, and cheques
- Event and raffle tickets with scannable QR codes
- Customizable donation forms with pre-filled donation amounts
- Recurring donations
- Member management
- Accept all payment types from your iPhone
Pricing:
100% free
Best for:
Nonprofits that want to convert website visitors into donors with no platform processing fees.
Fundrazr
Fundrazr is a multi-purpose crowdfunding platform for organization and individual fundraising campaigns. Users can create campaigns in minutes and reach more people on social media in one click.
Key Features:
- Peer-to-peer campaigns
- Mobile giving
- Recurring giving/subscription billing
- Easy social sharing
- Third-party integrations
- Membership management
- Donation tracking
- Automated tax receipts
Pricing:
2.9% + $0.30 credit card processing fee
Best for:
Individuals and organizations with a strong social media presence
Classy
Classy is a comprehensive online crowdfunding platform that enables nonprofits to connect with donors and raise funds. Classy makes it easy for supporters to see their donation history to manage their contact information, recurring donations, receipts, and more. GoFundMe purchased Classy in 2021 to help connect individual donors with nonprofit giving opportunities.
Key Features:
- Peer-to-Peer campaigns
- Donor Dashboards
- Recurring Giving
- Virtual and Hybrid Fundraising Events
- Gift Matching Management
- Membership Management
- Mobile Giving
- Pledge Management
- Third-Party Integrations
- Event live stream, chat, polls, and breakout rooms
Price:
Organizations must contact Classy for custom pricing
Best for:
The Classy and GoFundMe combination makes it easy for donors to support individuals in need and nonprofits that address underlying causes.
In Conclusion
Crowdfunding for nonprofits is a powerful fundraising method that turns supporters into campaign owners.
Whether your organization raises funds for emergency relief, scholarship programs, or a capital campaign, nonprofit crowdfunding efforts can raise significant amounts and reach more potential donors.
Start your next crowdfunding campaign 100% free with Zeffy.
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