Crowdfunding is projected to become a $90 billion to $96 billion industry by 2025, according to the World Bank. Online fundraising through crowdfunding tools garnered around $6 billion in 2015 for cause- or mission-driven fundraising.
The Philanthropy 2017-2018 Outlook, a report put together by researchers from Purdue University, shows online giving continues as a trend for donors, and research from the Pew Research Center shows about one in five Americans say that they have contributed to an online fundraising project,
Nonprofits need strategies on crowdfunding and other digital fundraising methods to stand out in the crowd. Here are seven ways your nonprofit can take advantage of this growing trend:
1. Use nonprofit social-media crowdfunding platforms.
It is a new era where the crowd is your donor and biggest advocate; therefore, you need to have the best crowdfunding platform for social-media engagement. Here are a few to consider:
2. Understand the law.
States are enacting stronger regulations and laws regarding social media and online crowdfunding. Laws around fundraising, tax-exempt status, and other related regulations can vary from state to state. Staying updated with laws and regulations related to crowdfunding is important to the success of your campaign.
3. Improve your technology.
According to the Philanthropy Outlook, nearly eight in 10 nonprofits could improve their technology. Potential donors connect with your organization and spread information about your mission mainly through social media. Keep up with the latest trends related to fundraising and technology by reading trade journals and sites such as the Philanthropy Outlook.
4. Know how algorithms work.
Nonprofits that use social media to spark their crowdfunding efforts need to learn platform algorithms and create a social-media advertising budget for their organization. Recent changes in Facebook, Twitter, and Instagram algorithms make it necessary for nonprofits to understand how those formulas affect what fundraising content will reach the intended audiences and potential donors.
5. Create a distinctive #hashtag for crowdfunding.
Have a short, simple, and consistent hashtag that aligns with the brand of your organization. Hashtags that are distinctive, branded, and unused by other crowdfunding campaigns allow your organization to stand out. In southwest Missouri, many nonprofits participate in #GiveOzarks, a one-day event dedicated to online giving put together by the Community Foundation of the Ozarks.
6. Think mobile.
A 2016 Dunham & Company study estimated that online giving via smartphones increased 80% between 2013 and 2015. However, 80% of fundraising web pages have not been formatted for smartphone viewing. Create your online crowdfunding campaign’s Web page and social-media sites to be friendly to donors who use smartphones.
7. Remember to thank your donors.
The most important thing to do is to say thank you. This is a great way to build relationships with donors and empowers them to be the advocate of the organization’s mission. Long-term, it could even encourage that donor’s network to give to your next crowdfunding event.