Let’s face it. Funds & donations are of focal importance for sustenance of every non-profit. This is because they have a ‘purpose’ at the core of their mission, however, unlike their for-profit counterparts, nonprofits cannot promise their investors a return on their investment. Fundraising occupies a large portion of the nonprofit’s efforts as they have to acquire long-term donors for a consistent flow of money and there is no short cut to it.
We all know how hard it is to raise funds because the very sanctum of a nonprofit’s vision is to raise help from donors ‘voluntarily’ or ‘as per their choice’. There is no give and take. Nonprofits have to make their prospective donors believe in their cause without giving them anything monetary in return, which results in non-profits exploiting every possible channel of fundraising.
There are two fundraising commandments: simplify and focus. Many small nonprofits have trouble raising money because they pursue every conceivable opportunity, thereby diluting their efforts and losing sight of their mission. – Entrepreneur
Focused campaigns result in measured, definite and consistent results. Crowdfunding and fundraising are used interchangeably while thinking of ways to raise funds. Crowdfunding is a facet of Fundraising. There is more than one way of raising funds with definite results at the end of each campaign. Santosh Phad, Founder of Thinksharp Foundation, took me on a deep dive into the concept fundraising for non-profits.
In this blog post, we will look at different types of Crowdfunding through which nonprofits can raise funds.
Crowdfunding is the most popular channel of raising funds where non-profits appeal to their audience to pledge funds in support of their cause. Donors may or may not get something tangible in return, but generally, the beneficiary sends a small token to the donors. There are three ways of going about it.
- Single Tier
Single Tier fundraising is the better-known type of all, where non-profits list their project or cause on fundraising sites like ketto.org, indiegogo.com, or classy.org by creating a campaign page. Using compelling visuals supported with a crisp blurb, nonprofits describe their cause and why they need the funds. Typically, a single tier crowdfunding campaign has an end date to it ( you cannot keep running a campaign forever ).
- Multi Tier or Peer-to-peer
Multi tier or Peer to Peer campaign is where the original fundraiser’s friends and family, set up their own campaign pages to attract funds for the non-profit. Most p2p platforms allow you to choose an end-date or keep things open-ended.
Popular non-profit, charity:water has a strong network of fundraisers who set up their own campaigns to raise funds for them. They allow their fundraisers to create campaigns for their birthdays, weddings and about anything else that they think could attract donors in their network. By doing this, charity:water not only gets many donors, but it also promotes people to do some good on their own.
- In Kind
A pretty unique concept and very practical in nature, donors often doubt the credibility of a nonprofit when they receive cold calls from nonprofits, telling them about a child who is in urgent need of funds. Often these are spammers who want to make a quick buck, but then, who knows? It could be true as well. Donors get sceptical about the authenticity of the beneficiary and hence shy away from participating in it.
Donatekart, a platform devised by two young engineers in India, allows donors to donate in kind. In the sense, NGOs and Non-profits can list the things that they need, and donors only have to choose what they can sponsor. That way, the donor has to only pay for what is needed and the nonprofit gets the things they need.
Donors can add the products they want to pay for by adding them to their carts and paying the equivalent amount, which is essentially as good as donating money. The cost of products can vary from a mere Rs. 2 to over Rs. 1 lakh. – Founders, Donatekart
Crowdfunding is one the most effective ways of raising funds for your cause. But before you jump onto creating your campaign page, check out these 5 simple ways in which you can make your campaign stand out on crowdfunding platforms. Pro tip: Adding a short film to your campaign page brings a whole bunch of social proof to your campaign, thereby giving your donors a sneak peek into your cause.
Stay tuned for more.