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Nonprofit Management: Crowdfunding

Crowdfunding

Crowdfunding Books

Articles and Guides on Crowdfunding

What is Crowdfunding?

Crowdfunding: A strategy where an individual, nonprofit, or business runs a campaign to reach a pre-determined funding goal from a large group of people through an online platform such as Kickstarter, Indiegogo, or others.  The campaign is usually to fund a specific project, program or venture, and the funding period tends to be very short, from two weeks to three months.  Although most crowdfunding platforms are similar in terms of fee structure, available features, and payment dispersal, the actual cost, rules, and criteria for nonprofits vary greatly from platform to platform. 

Peer-to-peer fundraising: A type of crowdfunding where volunteers raise money and solicit donations from their own network of friends, family, and contacts on behalf of a charitable organization.  Many walk-a-thons and fundraising challenges operate using peer-to-peer fundraising.  Some, though not all, crowdfunding platforms have options for peer-to-peer fundraising.

All or nothing: Some crowdfunding platforms require projects to meet their fundraising goal in order to receive any of their funds.  If the goal is not reached, all of the raised funds are returned to the investors.  All-or-nothing campaigns create a sense of urgency for investors and donors to reach the fundraising goal, but there is a high risk that the fundraising effort will not yield any funding.

Keep what you earn: Most crowdfunding platforms will allow campaigns to keep all of the funding that they receive, regardless of reaching the fundraising goal.  However, some platforms tack on higher fees if the goal is not reached.

Crowdfunding Platforms

Note: Details for the crowdfunding platforms are subject to change.  Please check the platform website for the most up to date information.

Questions to Ask

  • Is crowdfunding the best strategy? 
    Other fundraising strategies may be better suited for your goals.
  • Will this be a single campaign or part of an ongoing fundraising strategy?
    Some platforms include monthly or annual fees that may be unnecessary if you are only running a crowdfunding campaign once.
  • What platform is best for you? 
    Make sure to look at all of the terms, fees, support, and features before committing.
  • Will your campaign be all or nothing or do you want to keep what you raise? 
    All-or-nothing campaigns increase the urgency of your call to action, but you may wind up empty handed at the end.  Keep what you raise will guarantee you some funds, but fees may be higher if you don’t reach your goal. 
  • What will the campaign support? 
    Some platforms, such as Kickstarter, require you to create something rather than just fundraise. 
  • What are your upfront costs? 
    Some platforms have fees for setting up a campaign. 
  • How many people will be involved in the campaign? 
    Individual pages for peer-to-peer fundraising are not available in every platform.

Additional Crowdfunding Resources

It's Better with a Crowd: The Basics of Crowdfunding

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