3 Mistakes Nonprofits Make When Crowdfunding

Crowdfunding is becoming increasingly common in organizations’ strategic planning. When crowdfunding campaigns are run correctly, nonprofits can realize incredible returns versus traditional fundraising methods. However, don’t expect the “if you build it they will come” result. Crowdfunding campaigns involve more than just setting up a page so you can sit back and watch the donations pour in. Like anything that has great revenue potential, if it’s worth doing, it’s worth doing right.

So, what is crowdfunding? Crowdfunding is built around and relies on an online platform that allows individuals to make donations with a simple click of the mouse. Some crowdfunding platforms allow organizations to create fundraising teams, set up giving levels and offer t-shirts or other “gifts” at various donation levels. But before you build your first campaign or ditch the one that isn’t working, here are some mistakes and solutions that might help get your campaign on the right path.

1. No Clear Goals

Nonprofits that are new to crowdfunding can sometimes get caught up in magical thinking and believe that they will raise millions of dollars in just a few hours or days. Although there are always exceptions, this probably won’t happen and the last thing you want to do is set false expectations for the organization and donors. Stay grounded in your planning by taking the time to estimate a reasonable goal at the onset.

Similarly, if all you tell donors is that you want money, they are unlikely to provide the level of resources that you are seeking. Instead, state a clear monetary goal, a clear time frame for achieving that goal and the specific items or projects that the funds will go to support.

2. Failing to Rally the Troops

Setting up a crowdfunding campaign couldn’t be simpler, but as I mentioned earlier, it is by no means a set it and forget it project. Nonprofits that create campaigns and expect donors to miraculously start giving are setting themselves up for failure and disappointment. Crowdfunding works very much like traditional social networking and requires constant engagement with your network.

Start marketing the campaign to your top supporters far in advance of the launch using your organization’s newsletters, email communications and social networking sites. You want to recruit this group to help you get the word out. Additionally, many crowdfunding sites allow you to include photos, videos and other interactive slideshows to help get your donors pumped to be a part of the campaign.

3. Being Shy With Social Media

Studies show that sharing a crowdfunding campaign on Facebook increases donations by 350 percent. Because crowdfunding and social networking are very closely tied, this is no time to be shy. It’s almost impossible to conduct a successful crowdfunding campaign without using social media. Create a social media plan that includes regular interactions with followers. Some organizations run contests each hour to give donors an incentive to give sooner rather than later.

Bonus Tip: Seed Your Campaign

Because you made it all the way to this point, it’s likely you are either considering a crowdfunding campaign or you are already in the midst of one and it might not be going as planned. Consider seeding your campaign. The hardest fundraising dollar to obtain is always the first one, whether it is via crowdfunding or traditional forms. Part of the reason for this is psychological. While everyone wants to be a part of contributing to a good cause, they don’t want to be the first person to make a donation. This doesn’t mean donating money yourself. Rather, it means obtaining commitments from long-time donors and board members to contribute, once the campaign starts. By obtaining these commitments early, you are ensuring a more successful kick off to the crowdfunding campaign.

Crowdfunding can be a great way to increase revenue. Additionally, a recurring topic at many nonprofit marketing conferences has been incorporating it into a nonprofit’s annual fundraising plans. If you’ve tried crowdfunding but your campaign fell flat, review what worked and what didn’t, incorporate changes and try again. When you get it right, it will be a beautiful thing.

Originally published 12.21.15—Updated 12.12.17

  • Those are some good tips to follow. Social media is really important and there are several ways to utilize the proper channels. I think the ones that stand out the most when crowdfunding are fb, twitter, instagram, youtube and linkedin.

    • Angel Gowns Oregon

      Am I missing something about social media. Is there something else to do besides posting like crazy, messaging all your friends, viewers, likers and lovers?

      • Holly Flick

        Yes. There is much more to a good strategic plan than the ‘spray and pray’ technique 🙂 Nonprofs need to nurture engagement BEFORE a campaign, provide value to their publics, join the larger community conversations around key area of target market interest…I could keep going! Social is an amazing place for nonprofit to build support and is essential to a solid marketing plan.

        • Angel Gowns Oregon

          Thanks. Learning as we go. From sheer ignorance and inexperience, we did the spray and pray method. Then sheer luck, I talked with a newspaper reporter covering an unrelated event I was attending. OUr organization sparked her interest. She ran an amazing front page story that exploded all over the state. We did not do so bad.

  • Cool article, as we’re in our 2nd year & utilizing a crowd funding themed site, Red Basket, having no success. While we have 5 days left, an have clearly proceeded with all steps recommended in article, no luck. Curious to know, how/why/bad timing (tax season) or what. While we have a large following via social media an many “likes” on photos/videos & the sort, anytime we advertise for the fundraiser(which we do not overdue) it gets NO LIKES OR SHARES…um, what’s wrong with that picture. Thoughts please….sorry, very confused…

  • Hi Gretchen – great article! I think you are spot on. I work with nonprofits every day who are evaluating technology for crowdfunding as one of their online fundraising approaches, and the most common misconception I see is that crowdfunding is a magic wand – it’s certainly not. It’s a fantastic vehicle, but the best crowdfunding results come from setting these 3 things in place first: goals, communication and planning. Thanks for posting!

  • Bootsie

    Have you done one of these? I just launched one. Spent months writing a great “story” making a video had many people edit it and a professional ( expert on crowdfunding) review it. I get lots of view, likes, loves, positive comments but no clicking the donate button. What is the secret? Any feedback?

    • Dawn Jacobs

      YOu need to think about rewards – what’s in it for them. People are very selfish, so you need to think about what you can do for them. Also, having a narrow focus and clear timeline is important

      • Angel Gowns Oregon

        Any suggestions for rewards when fundraising for a new tiny charity that relies entirely on volunteers and donations?

    • Bineesh E M

      Two value propositions you need to keep in mind. One for the fundraiser and another one for the donors. As far as fundraiser is concerned he/she may be looking at having an experience with the cause you work for, that again depend on the personal motive of the fundraiser. You need to keep this simple thing in your mind while recruiting your fundraiser and try to meet them. All the best!