Published by Antoinette Siu on 02 Apr 2012 at 03:00 pm
Last week our Grant Writing Intern sat in on the webinar “Crowdfund the Future!,” presented by Tom Dawkins and organized by NonProfitWebinars.com. Gillian Gurish shares what you should know about crowdfunding.
Tom Dawkins, who co-founded the online fundraising platform for social change StartSomeGood, explained what exactly “crowdfunding” means, how it impacts the world of fundraising, and how non-profit organizations can utilize it to support their mission and build relationships with future allies and donors.
Fundraising has come a long way, Dawkins quickly points out. A mere decade ago, it was somewhat of a challenge for individuals to get truly involved with a cause in which they believed beyond giving a simple donation. A new trend came about with personal fundraising platforms, where people were able to actually run their own campaigns such as running a marathon for a particular cause or charity, thus increasing their involvement levels. The most recent movement–crowdfunding–allows individuals to actually raise the money they need to start an initiative themselves in their own communities. This type of platform takes the focus away from a certain cause’s organizational status and puts it on the vision of a group, 501(c)(3) and unincorporated alike.
As defined by Wikipedia, the term “crowdfunding” refers to the “collective cooperation, attention and trust by people who network and pool their money and resources together to support efforts started by others.”
The only flaw in this definition is the use of the term “crowd.” Dawkins explains that this is a misleading name, because it’s not really a “crowd” that is doing the funding, but a group of peers–hence the other popular name for this platform, “peerfunding.” Where the word “crowd” evokes a picture of a random, unknown group of people with little in common, “peers” or “tribe” speaks to what peerfunding is really about: a group of like-minded individuals coming together to support a cause about which they are all passionate.
The idea behind peerfunding (or tribefunding, if you prefer) is that there are tons of people in the world with innovative ideas and the energy behind them–but without becoming incorporated, they are strictly limited in their ability to raise funds and start their work. With virtual fundraising platforms such as Kickstarter or StartSomeGood, individuals and groups of all kinds can personally raise the needed money for their cause.
The main emphasis and key takeaway of Dawkins’s presentation was that all fundraising, at its core, is about storytelling. It’s not really about the money at all–it’s about becoming part of a story and a vision for the future. With peerfunding, your potential donors are not sitting around on a pile of money donating here and there and everywhere; they are your friends, family, colleagues and everyone else who care about your particular cause and want to make your vision of the future into reality. But first, the fundraiser has to decide how they will tell their story.
Dawkins posits five possible frames to tell it in:
- Issue (the specific problem you are trying to solve, such as youth literacy or organic food)
- Geography (if your cause is specific to a place, like youth literacy in Ghana)
- Team (like a mentor program or a school group)
- Approach/Innovation (perhaps you have created a new app)
- Community/Culture (a local theatre performance, for example)
When you begin a new fundraising campaign, you know that most of your initial donors will be your group’s personal connections. However, when you hit the middle of your campaign, you are going to need to reach out to your peers–those who believe in your cause and want it to succeed as much as you do. Dawkins notes that the majority of people who donate through peerfunding platforms are one-time givers, which means that your main audience is a group of people with their own beliefs and their own stories, but who are connected by their interest in and enthusiasm for your cause.
He also discussed the issue of the reward. It is important to keep in mind that this kind of microphilanthropy is almost solely driven by emotion, and in order to inspire that emotion, you may need to provide some kind of motivation. Typically people donate to a cause because they foresee some kind of financial return, they want something from you, or they want to feel connected to you, your cause, and your community of peers.
The reward you offer should not only reflect their emotional investment, but it should also be the beginning of a mutually fruitful relationship between you and your donor. Rewards can be anything from souvenirs or “schwag” (merchandise like T-shirts, key chain, etc. with your logo), tickets or tangible things created by the funded project, some kind of access (like voting) or acknowledgment (shout-outs and tagging on Twitter/Facebook/WiserEarth or a classic handwritten card), or a unique experience of some sort that would give the donor a special view into the particular project they helped bring to life. Have fun and be creative–think about what you would want to receive. Always keep in mind that each donation is the start of a new and mutually-beneficial relationship.
What has your experience been with crowdfunding/peerfunding platforms? What would you add to the information above? We would love to hear about it in the comments below.
You can watch a replay of the entire 50-minute webinar for free here.
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