Crowdfunding…Is It Right For Your Nonprofit?

As if things weren’t already challenging enough for most nonprofit organizations, what with government funds being cut off in midstream in desperate budget-balancing attempts, and increased competition for grant dollars, there are also recent reports that revenues from “big events” like golf tournaments and galas are slipping. Even some of the biggest, most venerable efforts like the American Cancer Society’s Relay for Life (- 12%) and the Susan G. Komen Race/Walk for the Cure (-38%) recording distinctive funding drop-offs.

It is becoming clear that a nonprofit interested in sustained progress in mission fulfillment must invest some time and talent in determining ways to diversify their funding sources, and pursuing new pathways to finding the money needed for the future.

With the continuing trend of online Social Media related tools seemingly eating everything alive, it is not unexpected to find that various online tools are moving into the forefront of many organizations’ fundraising methodology. One idea that is being seriously considered and increasingly utilized by nonprofits is crowdfunding. It may be time to consider if this strategy is right for your organization.

In case you have been living in a digital “safe house” for the last few years, here is a short primer on crowdfunding.  In simplest terms, crowdfunding refers to the practice of soliciting, usually via the Internet, smaller donations from large numbers of people, as opposed to looking for “big hitters” who can write fat checks to support or invest in a venture. The principles are generally the same for any effort, and may seem deceptively simple. Have a good idea, determine what type of effort you will mount (examples include reward/premium based campaigns, equity projects, and charity efforts), tell a good story, get people to share the message online, and rake in the cash! Of course, it is far from that easy. Each of the steps just listed has its own challenges and putting them all together may not bring the hoped for results. Kickstarter (see below for more information) notes that about 12% of projects never raise a penny, and most of their successful efforts have brought in under $10,000 – usually by design. The company also notes that nearly 80% of their hosted projects raise more than 20% of their goal amounts.

These concerns aside, crowdfunding has been used successfully by artists, filmmakers, and entrepreneurs of all stripes. A few campaigns have been singularly successful. In 2012, the Pebble Watch attracted more than $10 million in donations, and an online game development company is currently continuing to attract crowdfunded investments which are reportedly in excess of $70 million as of last report.

It does appear that crowdfunding is becoming a well-established means of raising money, and because of this, it is important that nonprofit organizations consider this tool as one which might belong in their toolbox for now and the future. Before you jump in with both feet, here are some considerations.

Evaluate crowdfunding platforms

There are a variety of platforms available for nonprofits to consider using the “host” their fundraising event. The best known of these is probably Kickstarter, which has been the destination for over 80,000 campaigns and has helped raise over $1.6 billion dollars since its establishment in 2009. Other notable platforms include Fundable, Indiegogo, Fundrazr, and SeedInvest, and more platforms are appearing all of the time. Deciding which is right for your nonprofit may require you to do some investigative work, evaluating things like ease of use (for you and your donors), cost, visual appeal, integration with other Social Media platforms and so forth.

Learn the Tricks of Successful Crowdfunding

Telling a good story is crucial to successful crowdfunding, as you may only have one shot at convincing a viewer that your effort is worthy of their contribution. The visitor will want to know what your organization stands for, whether you are viable or not, what you intend to do with the money, and how you will assess and report your successes. Deciding whether, and what you might give out as a premium or reward in exchange for contributions can also be important. Some groups will offer giveaways like t-shirts or ball caps, or written acknowledgment of the contributor, while others rely on the “good feeling” approach that often accompanies charitable donations – the giving of the gift is reward in and of itself.

The biggest contributor to success is attracting eyeballs, since the more visitors to your crowdfunding site, the more likely it is that you will reap rewards. Most organizations will be well advised to insure that they already have an established Social Media plan and presence, including a Twitter account, Facebook page, and LinkedIn presence. Robust email campaigning is also valuable in attracting visitors and ultimately, donors.

If you have access to traditional local media, such as newspapers,  or radio and television outlets, use these as well to announce your fundraising efforts and provide the information consumers need to link to your crowdfunding site. The vast majority of fundraising for most nonprofits is still local despite the ubiquity and universality of the Internet.

Consider Using External Resources

A crowdfunding effort requires a certain level of investment of time, and some funding. One thing many organizations will need to consider is the available resources, particularly human capital, they currently dedicate to fundraising. If you choose to try crowdfunding, who is going to do the work and – more importantly – what will they NOT be doing because of the time commitment to the crowdfunding effort. It might be in a nonprofit’s best interests to outsource the work to a consulting organization rather than divert their in-house experts from other critical tasks.

Of course, nonprofits should stay alert to the seductiveness of fundraising fads. One-off ideas like the “ice bucket challenge” or the Livestrong rubber bracelets are fun and can even make some significant revenue, but these strategies – and crowdfunding may be one of them – do not result in a sustainable funding strategy – and sustainability is a very important part of any nonprofits strategic planning.

If you need to know more, please contact us at Innovaision, and we will be happy to talk to you about the “fitness” of crowdfunding for your nonprofit.

Things You May Not Know About Fundraising (But Probably Should)

Hello non-profit world. By now, if you indulged, your “end-of-the-year fundraising efforts” are probably in the history books. Whether you chose a strategy that appealed to tax ramifications for the giver, or proposed that a donation to your enterprise would make a nifty holiday gift, or just relied on the fact that we all seem to think that people are in a more giving mood around this time of year, you may be sitting back, assessing the results, and thinking “Now what?”.

What better way to kick off your fund-raising strategies for 2015 than to think a bit outside the box? And, when I consider outside the box thinking, I often turn to Freakonomics. If you are unfamiliar with that word, I would be surprised. Starting with their first book, the eponymous Freakonomics which was published in 2005, Steven J. Dubner, a writer and sometime raconteur, and Steven D. Levitt, a well-respected economist on the faculty at the University of Chicago attempt to explain what they call “the hidden side of everything”.  5+ million copies later, the duo published SuperFreakonomics in 2009, and the books and the buzz have spawned a movie, a blog, and an extremely popular podcast. You can find out more about all of these at the Freakonomics website.

I tend to consume podcasts like I do television, by which I mean I rarely listen or view at the time a program is first aired, but I binge on several in a row. My latest TV gluttony occurred with Netflix’s Bojack Horseman which I highly recommend to anyone who is not easily offended by cartoons that are intended for grown-ups. In the car, though, I have been listening to back episodes of Freakonomics Radio. One episode I listened to recently was all about fundraising, and in its inimitable way, the podcast brought to light some interesting information that isn’t necessarily discussed in traditional articles about raising money for a cause or institution. You might find some of these ideas interesting, or controversial, but hopefully useful as well.

A featured guest on this episode was economist John List, who is a fellow faculty member, with Levitt, at the U. of Chicago. One of Dr. List’s interests is charitable giving, and he has an impressive array of research projects and articles on the topic. Whatever else you may think about the good doctor by the time you have finished reading this piece, you can’t say he isn’t well informed, nor thoughtful about this important subject.

Here are a few insights List provided during his on-air conversation for Freakonomics. If you are interested (and I suggest you should be) you can listen to the entire episode right here.

Americans give about 2.2 percent of their personal income to charitable causes each year.

Over the past 40 years, that percentage has increased about twelvefold.

Appealing to altruism (“You can help these poor unfortunate people”) is less likely to help you raise money than appealing to the donor’s self-interest. In other words, people are more likely to give if they are told that doing so will make them feel good about THEMSELVES, or even that they might LOSE something if they don’t donate.

Social pressure and guilt are actually powerful drivers of donation.

When someone sees that a friend, or someone you consider an influential person, has supported a cause, they are more likely to also want to support that cause.

Beautiful women, and more particularly attractive blonde women raise more money (maybe as much as twice as much) than others when they are the ones soliciting money for you. Most of this effect came from donations from men (surprise!) and there was not any observed reverse effect – women giving more money to good-looking men.

Matching gifts are powerful motivators, but a 1:1 match is as good as any other, so there is no need to make it 2:1 or 3:1.

Donors like lotteries, in which their donations in some way may qualify them to win a desirable prize. Think “For every dollar you give us, your name will be entered in a drawing for this big-screen TV”. List, by the way, recommends that you consult an authority on gambling rules in your state before trying this approach, but if it can work for you, offering a prize might boost giving.

As already mentioned, these conclusions are supported by data from rigorous academic research. So, what do you think? Did any of this surprise you? More importantly, does consideration of these research results give you any good ideas for some new ways you might consider boosting donations to your cause in the year to come? As Steven Dubner says about John List “We’d be fools to not follow his advice”. Let us know if you do, and how it works out for you.

The End is Near! 10 Great Year-End Fundraising Ideas

Appropriately, this article is being published on the last day of summer, 2014. So the end of a season is imminent, the end of the month is about one week away, and the end of the year is — well we may have a calendar quarter left, but if you are planning serious fundraising efforts around the upcoming holiday season (and you should) it’s time to get in gear.

It is a pretty well-established fact that people tend to donate more around the holidays. Obviously there are a lot of reasons for this, including tradition (it’s the giving season), awareness (those Salvation Army kettles attract donations, but also serve to remind people to think about giving), special “pushes” in communities and churches, and of course tax considerations. When people in your local or extended community think about giving this year, will they think about your nonprofit? You can have a say in that decision if you make the right moves, and now is the time to start.

Here are 10 good ideas you might want to consider to boost the success of your year-end fundraising campaign.

Work from back to front

The people you should be contacting RIGHT NOW are all of the donors from last year. Remind them of their generosity, thank them again, and underscore the challenges you still have that they can help you solve. Tell them what you were able to do in the past year, thanks to their philanthropy. Donors need to know that they are important to you, and that the money they give you makes a difference.

Have a theme or message

Think about your end of the year fundraising as a “brand”, and support it accordingly. Can you come up with a catchy phrase to describe your mission (e.g., “Not everyone will have a Merry Christmas this year!”)? Could you create a custom logo for this enterprise (maybe something as simple as putting a snowy landscape behind your standard logo, or perching a Santa hat on one of the letters in your organization’s name)? Pay attention to design concepts and color schemes and make sure your message is expressed consistently wherever it shows up.

Don’t ask just once

Make sure that you distribute you “ask message” to your community or mailing list more than just once. Your prospective donors are probably busy people, and a single email request or letter in traditional mail is easy to overlook – even more so at the end of the year when many people are calling on them to help out. By sending two or three messages, you increase the chances that at least one will be read. Also, the first message from you might just remind your donors of who you are and what you do. Follow up notes will be read more thoroughly and are more likely to elicit a response. Don’t forget the very last week of the year usually sees an increase in donation, so have one of your messages ready to get out around December 20.

Use a multi-platform approach

Are you active on Twitter, Facebook, Instagram and/or other social media platforms? If your project has a theme or brand, make sure it is spread across all of these platforms. You will reinforce the message among those who follow you on multiple social sites and will broaden your reach overall if you have donors who only read your Twitter feeds, or only follow your organization’s Facebook page.

Use multi-media

Visuals work, plain and simple. Adding pictures to your appeal letters that illustrate your work and the results of the generosity of others may set you apart from a lot of the other groups who are asking at the same time. Using online approaches allows you to embed videos and other digital surprises in with your appeal as well. Did we say “visuals work”. Yes we did!

Tie the gift to results

Even with a good theme and a message about your mission, a lot of donors want to think that the money they donate to you has a real relationship to specific benefits to the community. There is a big difference between stating “We need $50,000 by the end of the year to help us keep doing good work” and giving details about the use of the funds like “Your $100 donation will allow us to serve 45 hungry children a nutritious dinner” or “$50 means a family of four can spend a winter’s night in a safe and warm environment”.

Create an internal goal

How will you measure the success of your fundraising effort? Equally important, how will you know if the time and effort you invest in it really pays off? Not every organization can answer these questions but they are critical to both your current and future efforts. Setting a goal for your campaign helps in so many ways, including creating some parameters on what you can spend in time and real money on the project and helping you set benchmarks over the coming months to decide if you need to ramp up your efforts a little or a lot towards the end of the year. It can also serve as a way to publicly show your donors how you are doing (the oft-used “giving thermometer”) which in turn might stimulate some supporters to help boost you “over the top”.

Call on outside experts

You don’t have to do everything yourself, nor should you. If you have an accountant or tax attorney on your board or in your community of supporters, why not ask her to write a description of the tax ramifications of charitable donations to include with your appeal? Do you know a graphic designer? Maybe he would craft your initiatives logo or color scheme. Advertising exec? Ask for help in creating a simple message. Professional photographer? It’s obvious that you could get a ton of really expert help from your supporters. And, in the spirit of the effort, they could donate their work for you as
in-kind support and join the giving party!

Send a thank you note

Once the end of the year effort is over, remember that your efforts for next year have just begun. A heartfelt thank you note for a recent donation is a great way to ensure that there will be another gift next year. Make a commitment to thank everyone you have solicited – not just those who actually gave. You’ll thank yourself next year at this time!

25 Ways to Thank Your Donors

If you are a nonprofit organization, chances are that at least some – and perhaps a considerable amount – of your operating budget each year comes from donations. Philanthropy is on the rise, In 2013, total giving in the United States added up to over $330 billion dollars, and 72% of that represented gifts from individual, as opposed to corporate or foundation donors.

So, what are you doing to let your donors know how grateful you are for their support? The philosopher William James said “The deepest craving of human nature is the need to be appreciated.” This is something to keep in mind if you want to keep your supporters on your side, get more support from them in the future, and best of all enlist them in helping you attract others of like mind.

Here are 25 great – and simple, and relatively inexpensive ways to let your donors know how much you appreciate their support.

  1. Send a handwritten note.
  2. Be sure to spell their name right.
  3. Have an executive or board member call to say “thanks”.
  4. Tell a story so that the donor knows how their gift benefitted someone.
  5. Make your thanks personal and specific (“your gift of $100” not “your recent donation”).
  6. Invite donors to a luncheon or dinner to recognize their gifts.
  7. Give a personal tour of your operation.
  8. Invite them to sign up for your newsletter, or visit your website to learn more.
  9. Recognize donors in your newsletter.
  10. Highlight a specific donor in your newsletter, and talk about their accomplishments.
  11. Include a simple inexpensive gift with your acknowledgment, e.g. a drawing from a client.
  12. Tell them how many other people are in THEIR community (of donors).
  13. Respond quickly to any donation, no matter how large or small.
  14. Send a follow up 30 days after your first acknowledgement.
  15. Share progress reports throughout the year.
  16. Record a video thank you and direct donors to where it is posted.
  17. Use video or written testimonials from people who were helped by the gift.
  18. Use Twitter, Facebook or other social media platforms to thank and recognize supporters.
  19. Include a photograph with your thank you, relevant to your mission.
  20. Send an “end of year” statement for tax preparation.
  21. Mail a news story relating to the program the donation supported.
  22. Endorse donors on their LinkedIn profiles for “philanthropy”.
  23. Send a Thanksgiving card in November – “We’re thankful for YOU”.
  24. Post names on a donor wall in your public lobby.
  25. Send all donors an annual report and highlight the importance of donations to your group.

If you are already employing some of these ideas, good for you! Now, add a few more. If you have been searching for meaningful ways to say thank you to supporters, try a handful of these suggestions and just see how much of an impact they make.

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