Over the past couple of years, crowdfunding has gained recognition as an effective way to raise funds for various causes which many have benefitted from, NGOs included. Crowdfunding websites such as GoFundMe, Fundly, and Double Donation have raised funds by reaching out to numerous people who are to give the specific amounts they desire. This is effective because no one feels forced to provide donations.
Previously, nonprofits such as NGOs would only reach out to philanthropists who give to individuals hoping to receive a huge sum. But not everyone they reach out to are willing to invest in the initiatives nonprofits have chosen. Also, this is normally a long process in which NGOs may have a number of competitors. Philanthropic organizations aren’t known to be donating small amounts – and hence a long decision making process needs to take place.
Crowdfunding methods are effective because the people you reach out to will not be limited. The process of donating funds is simple and is something which can be comprehended by almost everyone. Through the amount of money people donate, crowdfunding has a way of making people feel as if it is their way of giving back if they are not able to volunteer. With crowdfunding, it is also easy to promote the initiative through various marketing efforts such as email marketing and on social media.
Furthermore, this can also serve as a stepping stone to reach out to potential investors. If you are able to successfully market your initiative, it will reach potential investors. Failure to reach out to investors may indicate that there is something lacking in the projects set out or the delivery of the crowdfunding campaign.
There are the different types of crowdfunding methods your organization can choose from. These methods include donation-based crowdfunding, rewards-based crowdfunding, and equity-based crowdfunding. Equity-based crowdfunding is not a method used by nonprofits as nonprofit shares are not for sale.
Donation-based crowdfunding is the most commonly used crowdfunding method for nonprofits. In this method, people who participate will not be expecting anything in return from their donations.
At times, the rewards-based crowdfunding method is also used by NGOs. How it works involves NGOs having to come up with a reward to those who have decided to donate. This reward can come as either material objects or services offered. For businesses, it can mean selling portions of the shares owned. But for NGOs, and other nonprofits, rewards offered usually come in material things. Common rewards are T-Shirts, eco bags, food items such as chocolates, or tickets to an upcoming fund-raising event. Rewards-based crowdfunding is similar to online shopping. Rewards are mostly offered if a particular amount is reached.
Although a wide reach is something NGOs desire, it’s not impossible to reach philanthropic foundations through this initiative. Philanthropic foundations can very well still be your target market while also reaching out to other individuals. To successfully reach out to philanthropic foundations, the captions and descriptions in your crowdfunding platform must be accurate and worthy of their time. Some captions in crowdfunding platforms may only mention the need for help and not the relevant details needed. Relevant details such as where the donations are going, and the legitimacy of your NGO. Hence, in doing this, always remember that you have other audiences as well. Other audiences might not donate if they do not understand your descriptions or if your descriptions are simply too long.
The thing you target to achieve will be receiving double the grants. This means many individuals will donate while philanthropic organizations will contact you for more details on the initiatives you wish to support. In some cases, they will invite you to send them proposals which will be beneficiary to your NGO.
