With its power to activate large numbers of people to support a cause, crowdfunding has attracted a lot of attention in recent years, and with good reason. Between 2011 and 2012 funds generated through crowdfunding nearly doubled, and they are projected to grow exponentially across the next two years.
These dollars have supported a variety of projects, from microfinance, peer-to-peer lending, and donation-based campaigns. While all of these types of campaigns continue to attract donations, the biggest increase since 2008 has occurred among donation-based campaigns.
One of the primary benefits of crowdfunding is that lower-level donors can have outsized impact. Low-level fundraising goals and clearly defined projects help donors see the difference that their gifts can make. This transparency is increasingly important to Millennials and Generation X, who value involvement and impact more than proceeding generations.
Another benefit of crowdfunding is that it provides a mechanism to acquire young donors now. Young alumni who donate consistently after graduation go on to give larger gifts and provide long-term institutional support. And finally, crowdfunding campaigns provide data about donor interests and preferences, information that can be used to shape future solicitations.
To initiate a best-in-class crowdfunding program, follow the outlined key implementation steps to ensure your organization can reap all of the benefits which will lead to stronger giving relationships and more targeted, effective asks.
1. Identify a process to vet and select projectsClustering multiple projects around a single subject area or posting vague projects can turn donors away. Instituting an upfront process for project vetting and approval ensures that institutions launch a…