Crowdfunding for Nonprofits: Why it Matters

You’ve seen it in an article that your board member forwarded you, in the title of a conference workshop you’re thinking of attending, and your intern won’t stop talking about it. What is crowdfunding and why does it matter for your nonprofit?

Crowdfunding refers to any kind of effort to raise funds from a large number of people. While the practice of crowdfunding isn’t new, the concept has received extra attention in recent years because the development of online crowdfunding platforms have made it easier than ever for individuals and organizations to engage their audiences and hit their funding goals. Today, crowdfunding for a nonprofit generally refers to an online campaign (though sometimes supplemented with offline events and fundraising!) with a specific fundraising goal and purpose, and limited timeline.

Why crowdfunding?

So what does this mean for your organization? Why should your nonprofit add crowdfunding to its fundraising toolkit? Here are a few reasons why crowdfunding matters for you:

Raise funds and raise awareness

While individual donation amounts might be relatively small, collectively the amount can be significant. Need proof? Check out some examples of the latest nonprofit crowdfunding campaigns on SparkRaise to see how your peers are leveraging crowdfunding to fund their cause. Crowdfunding is as much about fundraising as it is about awareness-raising. By reaching out to a large audience, crowdfunding gives you the opportunity to share your message and educate people about your cause.

Reach new audiences

Crowdfunding helps you tap into additional audiences and sources of funding that you wouldn’t normally access. According to this study, 62% of donors that gave to a crowdfunding campaign were new to the nonprofit and 28% of those donors are likely to give again. In addition, crowdfunding is particularly attractive to millennial givers, who prefer collaborative forms of giving that integrate with their favorite social channels.

Build community

As a nonprofit, the core of your work is about building a movement – whether that’s changing attitudes, raising awareness about a pressing issue, or mobilizing people to take action. Movements rely on the power of the people. Crowdfunding is an opportunity to engage your community, invite them to champion your cause and become ambassadors for your organization.

Fund a new project/initiative

Finding funds for a new project or initiative through traditional grants can be hard when you don’t yet have the evidence to prove your concept. Crowdfunding allows you to share your idea with your supporters and raise the seed funding you need to get your project off the ground, in a relatively short amount of time.

What about Peer-to-Peer Fundraising? Is it the same as crowdfunding?

Peer-to-peer (P2P) fundraising is a specific subset of crowdfunding that leverages your existing supporters to start a crowdfunding campaign on your behalf. Chances are, you’ve already interacted with a peer-to-peer fundraising campaign – whether you’ve personally made a donation to support a friend running her first marathon, or your organization has received a check from one of your supporters who collected donations in lieu of gifts at his recent birthday party. P2P fundraising has the added benefits of enabling you to multiply your reach by tapping into your supporters’ networks and raise more money.

Getting started with crowdfunding on SparkRaise

At SparkRaise, we believe that social issues don’t exist in a vacuum and nor should you, which is why the core of our platform is SparknShare, an online community of nonprofits, social entrepreneurs, corporate leaders and donors. Creating a profile for your organization on SparknShare makes it easy, secure, and completely free to set up a crowdfunding campaign. Get set-up now!

There’s no doubt that crowdfunding and peer-to-peer fundraising are an essential part of any nonprofit’s fundraising arsenal, but as with any other fundraising initiative, it takes work to be successful. In the coming few weeks, we’ll be sharing more resources to help you get set up, understand when to use a crowdfunding campaign and when to use peer-to-peer, and learn about best practices from successful crowdfunding campaigns.

Have questions about how to set up your next crowdfunding campaign? Get in touch!