Expert Roundtable: How to Choose the Best Crowdfunding Platform for Your NonprofitJanuary 13, 2014 by Janna Finch
Crowdfunding isn’t new. In fact, one of the earliest crowdfunding campaigns took place in 1884, when Joseph Pulitzer asked New Yorkers to donate funds to complete construction of the Statue of Liberty’s pedestal. In six months, 160,000 donors contributed over $100,000.
Nonprofits were early adopters of crowdfunding—NPR and PBS have hosted pledge drives for decades, and who can forget the Muscular Dystrophy Association’s telethons hosted by Jerry Lewis? But it wasn’t until websites Kickstarter and Indiegogo arrived on the scene that crowdfunding gained widespread popularity. The momentum hasn’t slowed, and today there are hundreds of crowdfunding platforms available.
With all of these choices, it can be difficult to know which will be the most effective for your nonprofit. I conducted a roundtable with six experts to learn their best advice for choosing a crowdfunding platform. Here’s what they had to say.
Ms. Kanter has over 30 years working in the nonprofit sector in technology, training, capacity building, evaluation, fundraising and marketing. She has trained thousands of nonprofits around the world and developed and implemented effective programs that help organizations integrate social media, network building and relationship marketing best practices.
Mr. Shah was named a Young Global Leader by the World Economic Forum and featured on FORTUNE magazine’s “Top 40 under 40″ list. He joined Kiva, a nonprofit dedicated to facilitating microfinance loans, in 2006, which today raises over $1 million each week for the working poor in more than 60 countries.
Ms. Lepore started her career in engineering and business consulting with Andersen Consulting. She transitioned into crowdfunding while in San Francisco, where she worked with industry partners. Since then, her passion for democratizing funding and empowering entrepreneurs has led her to raise thousands of dollars to help people around the world.
Mr. Conkin spends much of his time experimenting and measuring ways FundRazr, a crowdfunding platform, can reach more people. Past roles with P&G, BC Lottery and multiple tech startups have sharpened his instincts on what customers want and how to deliver it.
Mr. Ibberson is an established business writer and a current contributor at CrowdClan. The CrowdClan Blog offers a community of experts tips and tricks to help fundraisers succeed in crowdfunding. Ibberson primarily focuses on equity-crowdfunding, startup investing and campaign management.
In 2011, Mr. Wu launched a crowdfunding campaign that raised over $125,000 in 10 days for disaster relief. His work has been recognized by the Mayor of Austin and featured in the New York Times, CNN, Forbes and the Wall Street Journal.
What should you consider when choosing a platform?
Kanter: The most important factor has nothing to do with the platform. You have to build your network first, have a compelling ask/goal and know your audience. Also, it helps if you have a group of champions ready to leverage and ask their networks on your behalf.
When it comes to using a specific platform, the most important thing is getting access to the contact information of donors so you can easily export their data from the platform and import it into your organization’s database. You also need the ability to measure conversions from different sources.
Wu: Nonprofits starting crowdfunding campaigns should look for six characteristics when selecting a crowdfunding platform:
➔ Easy branding. You need to customize your crowdfunding site so it looks like your organization. This helps build trust and gets you more donations. According to the Online Giving Study, branded donation pages raise 14 percent more donations than unbranded ones.
➔ Auto tracking and management. You want the system to perform administrative tasks for you as much as possible. This can include sending donation receipts, auto-updating the donation counter, etc. The more time you save on administrative tasks, the more time you have to fundraise.
➔ Video storytelling. Eighty percent of the top grossing campaigns on CauseVox (my platform) use some type of video on their fundraising site. You’ll want a way to incorporate video as a centerpiece to your communication.
➔ Personal fundraising pages. These are pages that your supporters and volunteers can create and personalize, which they can then ask friends and family to donate to. This is one of the best ways to engage new donors and reach new people.
➔ Social media integration. You’ll want a highly shareable tool to drive the most traffic to your site.
➔ Reasonable fees. The industry average is around 7 to 8 percent of funds raised, inclusive of credit card fees. Watch out for providers that hide their fees. [Editor’s note: Campaign fees should be clearly outlined in a “pricing” or similar section of the crowdfunding platform’s website. Fees may include listing or setup fees, transaction fees and payment processing.]
Shah: Another important thing to reflect on before starting a campaign is your anticipated source of contributors. A common misconception with crowdfunding is that once your campaign goes live, people will flock to your page to contribute. The reality is, the significant majority of crowdfunded monetary support comes from an organization’s pre-existing network and people reached through dedicated marketing efforts.
In other words, most crowdfunding sites simply offer the platform, but organizations must tap their own networks, social media channels and marketing resources if they expect to successfully reach their fundraising goal.
What are some successful crowdfunding campaigns?
Ibberson: Due to the volume of its success, I have to acknowledge Operation Sharecraft 2012, which used FundRazr to raise over $1 million in humanitarian aid to benefit Save the Children. This project attracted backers by using an online gaming module where participants could compete for prizes and raise money.
In this sense, Operation Sharecraft departed from the standard video/rewards protocol, adding new level of ingenuity and creativity that supporters could really connect with. As a model for other nonprofits, it goes to show what that extra step can do.
Conkin: What made Operation Sharecraft 2012 special was that the donors were all video gamers. A leaderboard tracked the results of peer-to-peer sub-campaigns and Razer, which makes gaming hardware, software and systems, sponsored cash prizes to maintain interest.
To promote the campaign and thank donors, the campaign founder, Bachir Boumaaza (aka Athene, a professional gamer and YouTube personality) produced nightly live webcasts [for his followers] streaming appeals and shout-outs to donors. Operation Sharecraft’s goal was to raise $1 million in 100 days, and it was achieved in only 84 days. (Additional details can be found in media coverage on Techvibes.)
A key to success was the platform’s ability to build a community behind the campaign by creating optimal visibility across gamers’ social networks every time a comment, share, donation or interaction took place.
[Editor’s note: FundRazr features a sub-fundraiser function, which allows campaign supporters to create their own sub-campaign to promote on their networks. The funds collected through the sub-fundraiser benefit the umbrella campaign.]
Lepore: A campaign called Restore the Shore raised $1.5 million on Indiegogo in 2013. The campaign was to fund the rebuilding of Seaside Heights, a part of the New Jersey shore destroyed by Hurricane Sandy. The funds were raised by the nonprofit Architecture for Humanity, which partnered with MTV for the campaign.
MTV was a great choice because Indiegogo’s primary demographic is young adults. It is also one of the top platforms for music campaigns, which means the platform’s brand resonates with MTV viewers.
Architecture for Humanity’s campaign was successful because they had an effective strategy in place from the start. Specifically, they:
- Chose a platform that connected with their target audience;
- Partnered with a popular brand to expand their reach with their audience;
- Held a fundraising event at the launch of the campaign;
- Offered rewards vs. solely tax deductions to incentivize pledgers; and
- Engaged a number of significant and relevant influencers to Tweet, post, create videos and fundraise.
The result was the highest grossing nonprofit campaign on Indiegogo thus far, by over $300K. Most nonprofits will not be able to engage a partner as influential as MTV. However, finding a partner that compliments your capabilities is certainly possible, provided you create and execute a thoughtful strategy.
What campaigns work best on these platforms?
Wu: We’ve found that the types of campaigns that work best have four key characteristics:
- Narrow scope;
- Short and fixed duration;
- Target a specific audience that will resonate with the campaign; and
- A quantifiable unit of impact (e.g. $50 = 1 day of housing for a homeless person).
What doesn’t work are capital campaigns [campaigns intended to raise funds for construction projects], campaign appeals for general funds [i.e. operating funds] and anything that doesn’t connect a donor dollar amount to a specific outcome.
Kanter: The best types of projects or campaigns are those that have a personal story attached—in other words, they’re not “branded logo talking.” Those campaigns that have a sense of urgency and a matching grant system in place also tend to be successful. The most powerful types of campaigns on these platforms are those that leverage champions who tap into their own networks. SurfRider Foundation is an example of one that I’ve done as a champion.
[Editor’s note: The SurfRider Foundation campaign raised $5,563 in two weeks to benefit ocean conservation programs. About 85 percent of donations were converted from Kanter’s Facebook page and 92 percent of donors had an online and/or offline relationship with Kanter. This is evidence of the effectiveness of leveraging your social network in a crowdfunding campaign.]
Conkin: The campaigns that work best for crowdfunding are project-based (one-time projects with a specific goal). Donors need to feel that their contribution makes a difference for that project campaign.
Crowdfunding campaigns have an emotional component that is best leveraged by focusing on specific beneficiary stories or a focused story around the project. Make your campaign about people or a unique project that you can attach perks to. Tell an emotionally compelling story and then provide ongoing updates and news to maintain engagement and visibility.
Crowdfunding campaigns also feature real-time stats and social sharing that creates visibility and momentum to realize the goal. Crowdfunding is not as well suited to general ask campaigns that are not directed to a specific project. Research is also harder to crowdfund for, as it’s harder for donor prospects to connect to.
That said, one of the most successful FundRazr campaigns ever is American Gut, a science research project on the human microbiome that has now raised over $380,000 [from over 6,000 donors]. I think the success of American Gut can be attributed to three things:
- The compelling nature of the research. Charting new ground on what’s in our guts is something everyone can relate to and be interested in. What amazing insights could be discovered on our diets, environments or health? How can you make your research compelling?
- The unique ability to participate. Successful crowdfunding is often marked by contributions providing unique access to participate in a project, for example visiting a movie set or front-of-line access to cool new technology. In the case of American Gut, the campaign also crowdsourced the research itself by providing donors with home sample kits and their personal results in exchange for contributions.
- Strong campaign marketing. Media outreach, regular updates and the utilization of FundRazr platform widgets, playful use of perks and social network integration created high social visibility and sustained momentum. Everyone can connect with the tagline, “What’s in your gut?”
Ibberson: It’s hard to say that one type of nonprofit campaign will work on one portal and not another. Take Ushahidi for example, a nonprofit tech company that funded an Internet connectivity device through Kickstarter. Launch this project elsewhere and the success may not be the same.
For FundRazr in particular, large nonprofits may fit best, considering the size of the portal. Having the ability to fully utilize some of the portal’s big incentives (e.g. embedding a campaign on a website or blog and embedding a donation button on a Facebook page) is an asset.
This is why portals like CauseVox attract many smaller projects through their assistance offerings (such as free trials, low transaction fees and waived setup fees). In the end, however, it boils down to research—finding portals where similar projects have experienced success.
Should you run a campaign on several platforms?
Lepore: I don’t recommend running simultaneous campaigns on platforms. One campaign is a significant amount of work. Plus, having a single campaign provides for a cleaner message, more simplified process and one place to point donors. Also, some platforms have policies against running duplicate campaigns simultaneously on other platforms.
Shah: If you are considering using multiple crowdfunding platforms, keep in mind that most people underestimate how reliant their campaigns will inevitably be on tapping their pre-existing networks. It could become confusing for people if they are being pointed in multiple directions and could even hurt your efforts if you have multiple active “all or nothing” campaigns that are effectively competing for funds.
Kanter: I would pick one platform for your crowdfunding campaign—running it on different platforms is extra work and makes it hard to measure and track results. Select your crowdfunding platform, but don’t forget to use different channels, e.g. email and social, to point people to the campaign.
Wu: Generally no, but it depends on the timeframe and your audience. It doesn’t makes sense to run the same campaign on different platforms at the same time because it dilutes marketing and communication efforts, dilutes donation tracking against the goal and you have to manage more tools.
If you’re thinking more broadly in terms of a nonprofit or cause focus, it may make sense to utilize different crowdfunding platforms for different projects, audiences or campaigns.
For example, let’s say you’re a charity that provides clean water in Africa. One month you may want to use Kickstarter to fund a film project that shows how clean water affects the lives of communities. A few months later, you may want to rally your supporters to create personal crowdfunding campaigns on CauseVox in response to that film.
All of our experts agree: the success of a crowdfunding campaign is not necessarily dependent on which platform you choose. The platform is secondary to how well you market and share your campaign with your pre-existing network. It’s important to choose a single platform that supports your nonprofit’s unique requirements, goals and available resources.