Why should a not for profit be diving head first into crowd funding? Three big reasons.
Crowd funding for cash
First, well of course, money. New money that you wouldn’t have got otherwise, that is unlikely to cannibalise your existing income streams. Money that is independent of government and its strings.
Crowd funding to reach Gen Y Millennials
Appealing as that may sound, it’s not the main benefit. The real benefit is that crowd funding puts charities in touch with Gen Y Millennials.
Most charities, their supporter base is primarily middle-aged to older people. These are people who grew up in a tradition of organised community self help. They commit to organisations and tend to stay with them. They join.
But the people coming to adulthood now have a very different view. They do things spontaneously. They go for events that appeal to them. They support causes and especially outcomes. They don’t join. They are less likely to commit long term.
Like this or not, charities wanting a future have to engage and learn how to work in ways that attract Gen Y support. But many charities are seeing the average age of their supporters creeping up, a year every few years. They are staying with the same democratic cohort, moving through. To have a future, or even just to reach more of their potential audience, they have to learn how engage.
Crowd funding is an ideal way to get started. Gen Y Millennials get crowd funding. It’s once off, cause related, it’s about outcomes. It’s personal and involving.
This is the big payback for getting into crowd funding now. Engagement with hard-to-reach but essential-to-your future Gen Y Millennials.
Crowd funding to expand your database
Oh, and third? Most successful crowd funding projects are built around social media and rely on generating multiple generations of contact: people you know tell people they know, they tell people they know…
A good crowd funding campaign can significantly expand your database of potential donors, beyond your normal reach.
Time to reconsider crowd funding
We’ve been recommending for the past year that NFPs take a serious look at crowdfunding, but most have been held back by a degree of doubt and uncertainty.
Two new pieces of information and a recent announcement should encourage a re-evaluation.
Australians for Mental Health, a newly formed national body, announced October 8th that its launch appeal had raised more than $43,000 in a few weeks, from direct donations and via (Australian) crowd funding platform Chuffed. Australians for Mental Health is backed by some big hitters, but the point is: crowd funding for NFPs works in Australia right now.
Earlier this week the leading Australian crowdfunding platform, Pozible, which has half a million supporters, released a detailed report based around the milestone of its 10,000th project – just a week after it topped $40 million in pledges.
Pozible raises for business and personal projects as well as charities and these projects typically offer rewards for donations (for example, a music project may offer a free copy of the eventual CD), but Pozible reported that one donor in three chose no reward.
“We’ve found crowdfunding in Australia is still more about giving than getting,” project advisor Elliot Chapple is quoted as saying. “Especially when there’s a really compelling story involved.”
Pozible reported surveying hundreds of supporters asking why they gave, with the top response by a wide margin being “I love supporting people and their stories.”
And recently Prime Minister Malcolm Turnbull delivered on his promise to legalise crowdfunding via sale of shares, bringing Australia in line with recent US changes. This is a very significant shift that will see a big increase in local activity.
Getting started in crowd funding
Convinced? Good. But I’d like to close with a couple of points that are really important.
Crowd funding is not like ordinary fundraising moved online. The emotions are quite different. The motivations are different.
Crowd funding campaigns are traditionally short, 4 to 8 weeks. But planning for them is long, at least as long again if you want to get it right. An 8 week wind up is good.
If you’d like to learn a little more about crowdfunding, contact me. contact me. If you’re an NFP, you get a free initial consult.