Posted by Dana Ostomel


With the rise of crowdfunding in the nonprofit world over the past few years, it’s important to understand exactly what it is, where it fits within a nonprofit’s overall fundraising strategy and how your organization may be able to benefit from it.

Here's a quick look at the basics of crowdfunding and answers to some of the most commonly asked questions.

What is crowdfunding?

Crowdfunding is basically what it sounds like: It’s the process of funding a project or campaign by raising small amounts of money from a large number of people, particularly online. It’s quickly becoming an essential tool for online fundraising. Another way to describe it is “online social fundraising.” The innovative part of crowdfunding is not necessarily in accepting donations online—it’s in doing it in such a way that allows you to leverage your community, not just for giving but for sharing. It’s about leveraging and accessing social capital.

How can nonprofits use crowdfunding to reach their fundraising goals?

It’s a tool that’s best used for funding specific projects or campaigns and not for general fundraising. Giving Tuesday is a great example of a time when a nonprofit could really benefit from a crowdfunding campaign. It has an obvious beginning and end, it lends itself to a campaign that’s easily shareable and consumers are becoming familiar with that day/initiative as it rolls around each year. But mainly, crowdfunding is a great tool for a mission-specific project, campaign or venture that shows a tangible, urgent need and would appeal to a wide audience.

Is there a downside to crowdfunding?

The only downside is when nonprofits make the mistake of thinking that it can be some kind of magical cure for their fundraising woes. Crowdfunding campaigns can provide a nice boost to your revenue, but they won’t be a cure-all. Some people think they can launch a crowdfunding campaign, go away for a month, then come back to find that they’ve met their goal. But it doesn’t work that way.

In order for a crowdfunding campaign to be effective, you have to first get some traction from your own supporters, and then you may get some unexpected help from others outside your base as your campaign gains strength and awareness. But like any form of fundraising, it requires work.

What’s key to running a successful crowdfunding campaign?

One of the most difficult parts of crowdfunding is getting off zero. Donors tend to follow the masses, and many donors may feel uncomfortable donating to a campaign with a lofty goal if it looks like next to nothing has been raised. There are some things you can do to avoid this.

Before your campaign launches, reach out to your “online street team”—your closest friends and family, biggest advocates, longtime supporters and board members that you know will both support and share your fundraiser with their social networks. Tell them about the campaign and request that they donate when it launches (or even before with a “soft launch”) and begin sharing it with their networks to get the word out. You need to have that team of brand advocates behind you who are committed to making it successful, or you’ll have a tough time getting it off the ground. This is not an “if you build it, they will come” kind of thing. Successful crowdfunding requires planning and strategy.

Another important key to success: Set up your crowdfunding page the right way. It should be personable with a sense of urgency. Include engaging images of people, maybe a captivating video that tells your story. These things will tug at heartstrings, which is exactly what you need. Also, cut right to the heart of the campaign in your messaging: Why do you need money? This isn’t the place to launch a full-blown description of your nonprofit’s mission. This page is all about the campaign’s mission. Just include a few specific sentences about why you’re raising money and what it will be used for—that’s all people want or need to know.

Ready to get your online street team prepped and launch your first campaign? Learn more about how Firespring can set you up for crowdfunding success.


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