Crowdfunding for NonProfits – the Basics
Crowdfunding is an increasingly popular way to raise funds and awareness for a new venture – movies or books, products, services, or causes. Many nonprofit groups have significant expertise in raising funds to operate their organization, but can be slow to adopt new and trendy fundraising concepts. Seeing the success of crowdfunding campaigns, nonprofits and charities are beginning to take advantage of the enthusiasm and results that a well-organized crowdfunding campaign can generate.
What is crowdfunding?
Crowdfunding is a way for individuals to help finance ideas, products or causes by pledging money to a specific project – from very small amounts such as $1 to large amounts, even exceeding $1,000,000. Typically crowdfunding is conducted primarily on the internet, using websites and social media so the campaign is publicized and shared by supporters. Investors usually receive some kind of unique perk or exclusive benefit for supporting a project. Crowdfunding projects have a specific fundraising goal, and a deadline to achieve that goal. (read more: Crowdfunding 101).
What type of projects can nonprofits crowdfund?
- Capital Campaigns for new services or projects: Dallas-based Cafe Momentum provides culinary training for young men coming out of juvenile detention, and is using crowdfunding for the restaurant’s capital campaign; the nonprofit has raised $140,000 on a $50,000 goal.
- The Arts: Art Fund is a campaign to help museums in the UK fund art projects costing between £10,000 and £25,000, such as re-display and conserve a15th century Flemish altarpiece
- Medical or Healthcare costs for an individual or organization: doctors and researchers from Toronto’s Sunnybrook Hospital, Ryerson University and MaRS Innovation had hoped to raise $96,987 last fall to increase clinical trials of WaveCheck, software that could help better manage breast cancer treatment. While the campaign failed, the publicity from the crowdfunding campaign resulted in a grant that allowed the clinical trials to go forward
- Schools and Museums: The Indiana State Museum and Historic Sites launched an online crowdfunding campaign to raise $10,000 to help cover free admission for all kindergarten through 12th grade Indiana school field trip groups.
Top 5 crowdfunding sites for nonprofits
- Fundly: Tell Your Story And Connect With Donors
- Kickstarter: Explore an eclectic creative universe
- IndieGoGo: empowers people to activate the global community to make ideas happen.
- FundRazr: Raise money for what matters to you.
- Causes: Support the people and causes that inspire you. Campaign to make a difference.
This infographic from FundRazr shares 11 Essential Ingredients Every Crowdfunding Campaign Needs
For More Information on Crowdfunding for NonProfits
HubSpot: 7 Top Crowdfunding Sites for NonProfits and Higher-Ed Institutions
National Council of Nonprofits: Crowdfunding for Nonprofits
CrowdCrux: Top 10 Crowdfunding Sites for Nonprofits