Are You Leaving Donations in the Cloud?

A GoFundMe campaign for victims of the Orlando nightclub attack has become the fastest campaign to reach $1-million.  As charities look to for more revenue, perhaps it is time to consider crowdfunding as development tool.

What is Crowdfunding?

Crowdfunding is simple. If many people contribute small sums of money, costly projects can happen. Unlike traditional fundraising, however, crowdfunding raises money for specific projects. This means donors have a clear sense of how a charity will use their money.

One of the most cited examples is the campaign for the Statue of Liberty and its pedestal. People donated $125,000 between 1877 and 1884. In today’s dollars, it was a $2.92-million campaign.

Using the Internet’s global reach today, crowdfunding can raise similar sums in mere weeks.

How Can Crowdfunding Help Good Causes?

The Crowd won’t always fund projects that an organization would like to support. To improve their odds, charities should identify projects that have urgency and measurable outcomes.

Opportunities

Many charities perform services for state agencies, such as daycare or childhood nutrition. In Illinois, charities struggle because the state cannot reimburse them. This is a perfect opportunity for the Crowd.

Crowdfunding can subsidize publically funded activities because they are project-based, time sensitive, and measurable.

Challenges

Funding core costs will always be a challenge for charities. The Crowd will not donate to pay rent or buy supplies. But it is not difficult to crowdfund core costs, if there is transparency.

One way to fund core costs is to say that a percentage of money raised on a project will pay overhead. The percentage should low enough to “feel” like overhead to donors.

What Can You Do to Promote Crowdfunding?

Don’t leave donations in the cloud. Crowdfunding raised $34-billion in 2015. It is on pace to raise more this year than Venture Capital.

Begin identifying three or four projects that are urgent and measurable. Start small so your development team can notch wins by crowdfunding. Once you overcome inertia, crowdfunding can be part of your organization’s future development program.