I have watched with wonder this month as the RAICES crowdfunding campaign has gone viral across Facebook and Twitter. RAICES, a nonprofit in San Antonio that provides services to refugees and immigrants, has raised an astonishing $20 million dollars since June 16th to help reunite families separated at the Mexican-American border. They have channeled the interest in their mission into real support for their work.
The power of many of people making small contributions to create change is part of the fabric of America. So, it is not surprising that innovation is now being democratized through crowdfunding, a movement of many individuals pooling small amounts of money to finance projects they favor to bring to fruition.
Crowdfunding is a great way to build brand awareness, and has become a popular way to fundraise among nonprofits, for-profits and even individuals. And, many of these efforts have gone viral, including the Ice Bucket Challenge. In fact, the industry has grown from $2.7 billion in 2013 to $16.2 billion today and is expected to hit more than $100 billion by 2025. However, we have found that success like the recent RAICES campaign does not happen without a thoughtful campaign strategy.
Based on our review of many campaigns, here are some tips that will help your crowdfunding campaign stand out:
DO select a tangible project with viral potential:
Successful crowdfunding projects have a tangible end product – like building a library of books for elementary students in an impoverished neighborhood or producing a thought-provoking documentary on an untold story. Investors want to see the end result of their contributions. While the RAICES campaign isn’t a perfect example for tangibility, it was connected to a timely issue, which made it more likely to be successful. It also had a clear ask. RAICES expertly connected their value proposition as a nonprofit with a relevant, time-sensitive project that is currently part of a national conversation. Crowdfunding has a short window of time, so creating buzz quickly is key.
DON’T expect to build momentum without your existing advocates:
One of the best parts of crowdfunding is the opportunity to give your advocates the microphone. The most influential voices in a campaign will be those most impacted by or familiar with your work. Leveraging advocates amplifies their voices and channels your work into ancillary networks. The American Cancer Society has always done a great job of using storytelling to lift up the voices of survivors and their loved ones. Now, crowdfunding initiatives allow their supporters to play a more active role in their fundraising efforts. In fact, there are hundreds of active campaigns on Facebook right now for the American Cancer Society in honor of birthdays of those with a personal connection to their work.
DO pay attention to the feedback:
Crowdfunding gives you immediate feedback from the market. Projects that fill unmet needs of the community and speak to the ethos of your audience take off, and those that do not fail. While it is disappointing to fall short of a fundraising goal, in crowdfunding failure may indicate that the organization should focus its efforts elsewhere or reconsider its marketing message.
DON’T launch a campaign without planning to communicate impact:
Investors want to know how their contribution helped you make an impact. Before launching your campaign, a plan needs to be in place to communicate with investors along the way. DonorsChoose.org is a crowdfunding website where public school teachers can post their students’ needs (e.g., field trips to the science museum or lab equipment) that are funded by many individual investors. In return, investors are promised photos of the outcome, a letter from the teacher and letters from the students. This is a great way to connect your investors to the direct results of their donations.
Crowdfunding is unlikely to replace your other fundraising efforts, but it’s a smart way to diversify your revenue streams and get exposure to new networks. If this is an idea you’d like to further explore, we enjoyed this step-by-step guide and think you will, too. If you have tried crowdfunding, please share your do’s and don’ts with our TrendSpotters.