Non Profits are Thinking About Crowdfunding All Wrong

The Thinker Rodin Art

We don’t do crowdfunding.

I can’t tell you how often I hear these words, spoken with such confidence, by the head of a major non-profit. I’ve come to realize there are many reasons for this initial hesitation, and it’s a combination of many things, but mostly fear. Fear of innovation. Fear of really putting yourself out there.

Fear of failure.

failThe reality is many non-profits, even those who achieve their campaign goal amounts, are still failing at crowdfunding.

When you crowdfund for a creative project…it’s disappointing no one wants your smartwatch. But you get through the mourning period with a box of kleenex and a Game of Thrones binge, then move on. When you put yourself out there as a nonprofit, there can be a great deal of negative PR in the aftermath of such failure.

So you throw in the towel. You wave the white flag. You “don’t do crowdfunding”.

Slooooow down. Crowdfunding is no new kid on the block.

Although popularized by Indiegogo in 2008, it’s been around for hundreds of years, and successfully so. From door to door solicitations to today’s peer to peer appeal for the next marathon, it has kept religious institutions, schools, orphanages, newspapers, publishing houses (you get the idea), in business for centuries.

But today, the general perception of crowdfunding, that I’ve seen, is this almost magical, mythical tool, a unicorn’s horn, that will draw out these funds from an otherworldly realm of new donors.

ben-franklin-money-large-face-100-dollarsAnd when people view it that way, they get very disappointed.

Because they’ll say, you know, let’s try it. We’ll squeeze it in somewhere between plans for this year’s gala and next week’s breakfast meeting. But since we’re just “trying it out,” we’ll shoot for $50,000. $100,000. A meager sum for well-established organizations with the donors and potential to bring in millions.

When it comes to crowdfunding, many are in a state of confusion.

Rather than developing and utilizing it to its full potential, crowdfunding is often treated as a side project we’d toss to the new intern on the first day of the job.

And, because of this, it’s almost become a dirty word.

We need to shift our perception. Instead of approaching crowdfunding as an external experiment, we should be asking ourselves, how can we make it an integral part of our fundraising agenda? And if we start viewing it in this way, I believe it can be the absolute solution to the future of fundraising.

Instead of asking how can we raise a little extra money on “Giving Tuesday”, we should be asking how can we raise 10%, 20%, even 50% of our budget? How can we use crowdfunding to raise more than we raised at last year’s dinner? How can we use crowdfunding to achieve major impact for our organization? To get that next project done. To build that new building.

Success is not just about riding the hashtag.

In laying the groundwork for success, consider the following cardinal guidelines.

Input Equals Output

Ask yourself how much effort are you putting into your campaign. If you only put in a few weeks, the results will equal your input. But if you focus a quarter of your time, dedicate the necessary resources, talent, and manpower, you will think bigger. Go bigger. And when there is more at stake, you cannot, will not, let yourself fail. You’ll do everything in your power to ensure the goal is met.

Who are you engaging?

If you’re planning on doing it all alone behind your desk, you can’t organize a gala dinner that way, neither can you organize a crowdfunding campaign that way. To do it successfully, you need to engage ALL levels of your organization. Start at the bottom, start with the people who will be giving those donations at the bottom, and work all the way up to your board members. How are they being approached and engaged?

Consider the Audience

Who is your target audience? If you’re just targeting your $50, $100 givers, then those will be your results. We all know the 80-20 rule– we know 80% of our donations comes from 20% of our donors, and vice versa– so if we only target the modest givers, then we’re going to raise only 20% of our capacity. The key is brainstorm some creative ways to bring in these mega gifts, and inspire involvement across all levels of givers, so that we can achieve something truly impactful for the entire organization.

white-flower-plant-green-natureWhen we prioritize crowdfunding in this way, it becomes an essential component of how we fundraise as an organization.

And the benefits? Ultimately it comes down to, like all other technological advancements, with less we can do more.

Before the era of social media, if you wanted to write 100 letters to 100 friends, you’d have to sit there for week and painstakingly craft each one (remember those days of ink-stained fingers?). Now, you can reach thousands with one message. One post.

Instead of excessive overhead costs for a dinner and six months of interviewing musicians, smelling flowers, hiring a caterer, and comparing whether taupe is better than maroon, crowdfunding achieves more with less. We don’t kill any animals. PETA loves crowdfunding. Because, comparatively, very little expenses go into crowdfunding.

The question we need to keep asking ourselves is how can we raise ambitiously. Think in the box. And do more with less.


moshe-hecht-2Moshe Hecht is Partner, COO & Chief Fundraising Specialist of Charidy, a global donations-based crowdfunding platform. Charidy provides guidance and expert advice for non-profits and other projects raising money on their platform. Moshe was previously Master Hatcher & Creative Director for the Brooklyn-based boutique marketing agency Hatch Group. Moshe is also a Hasidic indie-folk artist who has performed internationally.

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