Crowdfunding for nonprofits: Harnessing the power of people for good online

Erin Todd

Erin Todd

Inbound Marketing Specialist

Crowdfunding is a term that refers to funding a project or venture by raising small amounts of money from a large number of people. Nonprofits have used crowdfunding for many years, through many channels. These days it’s typically accomplished via the internet.

Websites like Kickstarter, IndeGoGo and GoFundMe made crowdfunding trendy and fairly easy to set up. Since their origin, startups, entrepreneurs, creative projects and even individuals have used crowdfunding to fund their dreams or escape poverty. With all the money flowing through these sites it would be tempting to find a way for nonprofits to tap into this trend. However, these sites were not really designed with charities in mind. While crowdfunding sites are appealing for building momentum and reaching a large, diverse audience quickly; they don’t provide for a few key needs of nonprofits:

  1. Branding and control of messaging for the nonprofit can be unruly
  2. Donated money transfer to nonprofit is clunky or indirect
  3. High transaction and platform fees
  4. Information about fundraisers and donors is limited or lost

Nonprofit organizations quickly discovered these flaws and had to find or create solutions that mirrored the crowdfunding experience without any of the drawbacks. In response to this in 2009, DonorDrive developed the ability for nonprofits to let supporters create "personal campaigns" eventually the result was coined “DIY Fundraising.”

What is DIY Fundraising?

Do-It-Yourself Fundraising or DIY fundraising empowers supporters to create a fundraiser whenever they want, with whatever style of fundraiser they want to do for your cause. It could be a birthday fundraiser, a memorial fundraiser, a livestream dedicated to the organization or something even more creative or challenging. The DIY campaigner has the freedom to choose what they want to do and they plan, execute and promote everything. The nonprofit simply provides the vehicle and platform for them to create a fundraising page and accept donations.

DIY is built around and relies on an online platform that allows individuals to make donations easily when they encounter a fundraiser by someone they know and wish to support.

The average DIY campaigner generates five times what an event participant does.

Organizations must have the ability to capture the passion of self-motivated fundraisers and to build relationships with these high performing supporters.

Nonprofits need to make it easy for a person to set up their DIY fundraiser quickly when they decide they want to “crowdfund” for your cause. The less friction there is for the campaigner, the better. If there is a long and complicated process to get started the DIYer will get discouraged, and the more time they spend configuring the less time they will spend promoting and soliciting donations.

For nonprofits, the biggest task is teaching staff and supporters what DIY is and how it can be used. Once constituents know they can create their own DIY campaign they will run with it from there.

The nonprofit also needs the ability to communicate, encourage and thank their fundraisers and donors in a unified voice and simple workflow. A complete picture showing the data in an actionable is key for year-after-year performance. The information of the campaign, campaigner, and their donors synced to the nonprofits CRM is a powerful tool that can’t be neglected. This provides value for the nonprofit in a variety of ways:

  • Viewing successful campaigns can direct nonprofit staff on how to coach future DIY campaigners
  • Be able to communicate and encourage DIY campaigners during their active campaigns.
  • Thank donors and obtain enough information to invite them to fundraise themselves or donate again in another way.

Finally, the nonprofit needs complete control over the dollars donated from the fundraising platform. A DIY fundraiser should never be handling funds themselves and the nonprofit should receive the donations the day they were made, not receive a lump check by the end of the fundraising period. 

Does DIY Work?

Absolutely, DIY is a great mechanism to future-proof your nonprofit fundraising. The most successful DIY programs don't just set up a DIY page and turn supporters loose. Organizations should look through their fundraiser data and position their DIY program to fit the interests, desires and tendencies of their supporters.

Covenant House  is a great example of this success. They've used their DIY program on DonorDrive to say yes to thousands supporters who wanted to fundraise and create their own campaigns that couldn't be handled in the signature event software they were using. This included a ride created by employees of Macallan Scotch that raised $150,000.

Ready to learn more about how DonorDrive can help you?