Is crowdfunding an option for your nonprofit?

Crowdfunding, a means of getting people to pool their money to raise capital, is no longer just for business startups and artists. Sites like, CauseVox and Fundly now attract hundreds of nonprofits raising money for their causes.

Crowdfunding was inspired by crowdsourcing—networking to build collective cooperation and trust for a shared effort. Crowdfunding has long been a popular model for disaster relief, international microenterprise, and political campaigns.

But with the rise of social media, opportunities are soaring for nonprofits to crowdfund to raise dollars and visibility. Even sites like Kickstarter and indiegogo, which aren’t non-profit specific, are used more and more for organizational fundraising.

Crowdfunding sites let your nonprofit set up an online campaign based on a fundraising page, and you can accept funds directly from that page using the website’s credit card processor. The sites are designed so supporters can get their colleagues and friends to donate too, either by setting up their own fundraising pages or those that link to your “master” campaign page.

Some sites like Kickstarter are geared more toward tangible products like films and art exhibitions, and their nonprofit users tend to be arts organizations promoting such products. Others, like CauseVox, are more broadly geared toward nonprofits. But all crowdfunding sites work best for specific projects or campaigns, rather than general fundraising such as annual giving.

But crowdfunding is not a magic cure for all fundraising woes. It takes strategic effort to get traction on your campaign from your inner circle of supporters, and to create the compelling messages that will spread the word beyond that circle. The sites provide you with the tools to report and thank donors, but someone needs to manage the process. And crowdfunding works best for quick turnarounds—the money comes in and you need to use it for what you promised, without delay.

Crowdfunding sites vary in costs and features. Make sure you choose one that’s visually appealing, easy to use, and fits your needs. For instance, some sites like KickStarter require a video, while you only need pictures for others like Check out the total cost of the fundraising platform—some have set-up fees, monthly fees, credit card processing fees, fees for sending you a check, etc. Don’t forget to investigate what payment methods donors can use, including e-checks.

Also look at the actual networking capabilities. How easy will it be to link to and promote your fundraising page on social networking sites?  Can your supporters set up their own pages and have donations funneled through them back to you?

Most importantly, check out the site’s stats and success stories, and ask around. There are more crowdfunding sites hitting the web every day, but not all of them are widely attracting people to browse for causes and make donations. Pick a site that people are using!

You’ll learn much more about crowdfunding and its potential for your nonprofit, the Alliance’s upcoming conference Powerful Networks: Nonprofits, Social Media, & Community in just a week—register now! 


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