Crowdfunding will change the nonprofit fundraising model
Donations will inevitably be done online and not at galas
The traditional fundraising tools local nonprofits use are the galas, the walkathons, and the community volunteer events. Offline events will always be powerful for bonding donors to the cause with a real handshake, but they are resource intensive, often costly to produce, and generally don’t have reach beyond the locality. Marketing guru Seth Godin goes as far to say:
(Galas are) a ridiculous way to efficiently raise money for a good cause… Attendees are usually driven by social and selfish motivations to attend, and thus the philanthropic element of giving—just to give—is removed.
Online fundraising is usually relegated to a static website, with the call to action limited to a “donate” button that sits on the website like a banner ad. Nonprofits need to focus on developing online marketing that extends their visibility beyond their brochureware websites and into the social fabric of the community.
Crowdfunding as Content Marketing
Crowdfunding is the new mediaspeak for the practice of online project fundraising made popular by sites like Kickstarter. It adds personality to the donate box; think of crowdfunding campaigns as a series of blog posts highlighting new funding opportunities instead of a static web page. Nonprofits and small business need to think about incorporating crowdfund campaigns because, like all net-based transactional systems, it is more resource efficient than producing offline events, and can be easily programmed between these offline events. The success of the crowdfund movement has spawned a number of niche platforms that focus on raising funds for local businesses (Kiva Zip, Lucky Ant), and nonprofits (Razoo, Crowdrise). In the long run, nonprofits may not need to use these platforms, there are third party white label apps that provide plug and play functionality to conduct crowdfunding on their own site.
Crowdfunding add tangible value to the three tenets of cause marketing- telling the story, building the advocate base, and finally, remaining relevant. Small business can also use the same methodology to crowdfund business needs, like adding a coffee bar, that can be positioned as a community service.
Crowdfunding campaigns use video to share stories of the cause’s benefactors, the most impactful media to connect donors with the cause. The campaigns are strikingly similar to TV commercials in that both are eliciting a “purchase”. The difference is in the marketing; whereas commercials are bought media, campaigns are promoted primarily through email lists and social media, and reinforced by donor testimonials and online share referrals. Because developing crowdfunding campaigns is like creating commercials, I expect a new agency class to develop to support campaign strategy and production.
People want their causes to be success stories. Once or twice a year galas celebrate achievement, but there’s too much down time between events. Causes stay relevant when they can continually update their constituents with involving stories that demonstrate results, not another blanket solicitation. Crowdfunding projects are a form of content marketing, a way to uplift or inform a reader without the explicit sales pitch. It fits in with what donors now want from the causes they support — more results and less solicitation.
Nonprofit crowdfunding needs new channels for localized marketing
Nonprofit fundraising is inherently based on personal relationships; people donate when they either connected to the cause’s mission or are asked by close friends and family to support a cause. One hurdle local nonprofits face is making a tangible appeal beyond their existing donor email list or geography. Crowdfunding’s innovation as a nonprofit marketing vehicle is its viral capabilities to expand reach to new donors. That’s why high profile crowdfunding projects choose Kickstarter or IndieGoGo in the hopes that their lead dog status will translate into greater visibility and likelihood of success from pulling in their national donor / investor base. But local nonprofits don’t need the national reach of a Kickstarter for their campaigns, they simply need to reach their target donor base: locals. By leveraging the viral nature of the crowdfund campaign, their local advocate base can expand donor reach beyond their locality.
All the “How to Crowdfund” tutorials point to leveraging established social media like Twitter and Facebook to engage their advocates and spread the word beyond their advocate base. The marketing keywords here are media and reach. Before social media, nonprofits used traditional media, like newsprint and radio, to publish or announce their “PSA’s” — public service announcements. Crowdfunding sites aren’t set up to market campaigns at the local level, they aren’t the media.
Four years ago, I saw the need for a community media service that would broadcast “PSA’s” as tweets from civic groups, nonprofits and performing arts organizations within the construct of a community news platform. It wouldn’t rely on the tedious resource intensive editor submission model where organizations would have to manually send their PSAs to the media for submission. Publication would be performed in real time via social media, as if the organization were a news correspondent instead of a supplicant to the media.
The end result is the Media Amplification Program we set up over 18 months ago within The Breaking News Network, our hyperlocal media network for social good. Through the program, we amplify the social media feeds of mayors and city councils, local museums and performing arts organizations, nonprofit news networks, local newscasters, indie filmmakers, and good causes. In fact, anybody who needs a community voice.
We’ve opened up our Media Amplification Program to support community focused crowdfunding campaigns in over 350 cities across the Network. We support not only the civic groups, foundations and nonprofits who are directly involved in community service, but also the filmmakers who document their cities, the performing arts organizations who enrich daily lives, and small businesses who are making a positive commercial impact. It’s our unique contribution to those entrepreneurs who want to make their communities better.
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