NPA 030: How to Start a Crowdfunding Campaign for your Nonprofit

The Nonprofit Ally Podcast

As crowdfunding has exploded in popularity, rapidly evolving into a 5.1 billion dollar industry, the diversity of crowdfunding platforms has likewise ballooned. While this is excellent news for hopeful crowdfunders in terms of the choices and options available, it also makes the question of how to choose the right crowdfunding site a rather overwhelming one. By following the tips outlined below, however, you can begin to navigate these teeming waters and avoid choosing the wrong platform for your campaign:

1. Know which platforms are suited to which campaign types.

Different crowdfunding sites tend to cater to different campaign goals; there are crowdfunding sites which are, for example, intended for nonprofits and social causes:

• Crowdrise
• Rockethub
• Causes
• Gofundme

…And there are crowdfunding sites which cater to independent artists and people spearheading creative (and/or technological) projects, such as:

• Kickstarter
• Indiegogo
• Pubslush

There are also a few crowdfunding sites which may be used for either personal causes or creative/business ventures, such as Fundly and Fundrazr, and a smaller number of platforms oriented more toward attracting business investors, e.g. AngelList and Fundable.

Note that some of these platforms, like Kickstarter, will require your campaign to go through an approval process, so you will need to research what that process entails before designing your campaign.

2. Know the basic types of crowdfunding.

Your backers need some kind of incentive to invest in your campaign; that incentive might be:

Equity-based – Backers get a stake in your company.
Donation-based – Backers will be able to write their donation off on their taxes, as they would when donating to a conventional charity.
Lending-based – Backers are lending you money, and that money will be repaid over time, perhaps with interest.
Rewards-based – Backers will receive a tangible product if they fund your campaign, such as a copy of the book or CD you plan to produce.

As nonprofits, we are “donation based”.

3. Understand the fee structure and how underfunded campaigns are handled.

Not only do different platforms have a range of initial fees (anywhere from 2-12%), you will also need to look into what your platform of choice allows if your campaign does not meet its funding goal. Some, such as Kickstarter, will not allow you to keep the money you have raised (it will all be refunded to the backers) while others, like Indiegogo, will allow you to keep the money, but will raise the fee so that they take a larger cut of your profits.

4. Examine the extra features offered by those platforms that best suit your campaign type.

Once you have narrowed down your options to those platforms which suit the mission of your campaign and have an appealing fee and incentive structure, you should make your final choice based on relevant additional features. Think about how you want to design and promote your campaign:

Do you want to focus on visual presentation, such as by changing the color scheme and background of your campaign page?

Do you want to have your own URL or a custom domain name?

What about social sharing—will you be marketing primarily through email (if so, look for a platform that integrates with your mailing list) or social media sharing?

How will you get news and updates to your backers—is there a blog/news section?

Is there any way to get information about the demographic(s) backing your campaign (e.g. a donor database or tracking system)?

Does the platform allow you to offer perk awards as incentives for donating?

As a final note, if you begin to feel a bit lost while assessing the aforementioned, take a step back and research successful campaigns with a purpose similar to your own. Then ask yourself, what did they do, and why did it work for them?