There’s been a lot of discussion surrounding crowdfunding vs traditional fundraising: which is best and why you should use one over another.
You may be hearing that you should add crowdfunding to your fundraising methods. However, if you are new to crowdfunding you might be unsure of where to begin, or what to phase out to add crowdfunding in.
This article is your guide to which traditional methods are working, which are not, and how to incorporate crowdfunding to your fundraising efforts. With today’s fundraising environment, the most important skill you can learn is how to effectively integrate the dynamism of crowdfunding into your traditional fundraising activities.
It is no secret that the giving industry is changing.
41% of donors want to see the impact of their donation, and want to know how specifics about how you are using the money you receive.
Audiences today are more reluctant to donate to support overall operating costs or to fund research. They are more likely to target their donations to individual projects they feel a connection to.
You need to support both aims: the overall workings of your institution as well as its individual projects. Learning how to combine the two major forms of fundraising – traditional and crowdfunding – is key to creating and maintaining two healthy revenue streams, regardless of the nature of their goals.
The goal of Traditional Fundraising vs. Crowdfunding
Traditional fundraising is built to increase donations, particularly within your current donor base. Generally, traditional fundraising works to accrue large donations to reach a larger final goal, one that may have multiple stages or minor activities involved (e.g. designing and constructing a new building, supporting fieldwork).
Crowdfunding goals are based on very specific, often quantifiable initiatives (e.g. rehoming 20 abandoned dogs, purchasing 100 first aid kits for a clinic). Their success hinges on achievability, transparency and the visibility of their impact.
This is where crowdfunding’s power lies.
Crowdfunding helps you find the right audience for your campaign. By its very design, it reaches a larger crowd of people online, who are personally invested in your project.
To learn more about what crowdfunding is, please see our blog here.>>
Old fundraising model, new tricks
The idea of merging crowdfunding with your existing strategy may sound daunting, but it doesn’t need to be. With the right understanding of what it brings to the table and the direction of current trends, you can adjust how you use your current resources for maximum success.
Here, we have a brief overview of the main types of traditional fundraising, trends and how a modern fundraising strategy can innovate, while minimizing disruption to their processes and teams.
Types of Fundraising
Mega-Donors
Trends
Often a focal point in a fundraising strategy – with good reason. In 2016-2017, giving in the USA increased by 5.2%. Much of this was attributed to substantial individual gifts from mega-donors.
How to incorporate Crowdfunding
Adding manual and matching donations to a crowdfunding campaign is a way to leverage offline donations online so that audiences can see their impact.
Using a platform that also allows pre-donation prior to a campaign’s launch is a great way to build the strength of your campaign. Having a campaign with 25% of the goal already raised makes your project five times more likely to succeed.
Capital Campaigns
Trends
Capital campaigns allow you to build awareness, attract substantial donations and encourage involvement among your supporters (i.e volunteers, influencers and/or champions).
How to incorporate Crowdfunding
Smaller donors can often shy away from campaign goals that are too large because they are not persuaded their contribution can make an impact – but the reality is that every donation counts.
Having a platform that allows you to break up your large capital campaigns into several smaller campaigns can work to counteract this donor fatigue.
Telemarketers
Trends
This form of fundraising has been very popular in the past. However, in the era of fraud and with a rapid shift to digital, telemarketing is quickly losing its luster.
It is expensive to do and research has shown little evidence that telemarketing is beneficial in the long term.
Donors are also increasingly averse to this method. Some charity telemarketers have used questionable tactics to get a donor to sign up by calling repeatedly or using guilt. Not to mention Fewer people answer unknown calls.
How to incorporate Crowdfunding
You may already have a dedicated staff in place. That’s great! You can use the same staff to utilize other, more sustainable, digital fundraising efforts.
They can still reach out to potential donors through social media, email marketing, and campaign updates. To ensure you can leverage all of these, choose a crowdfunding platform that can integrate with other key services (MailChimp, social media, your payment gateway, CRM and more).
This can be a painless transition, as there are crowdfunding platforms that are easy to use and have support staff ready to help all their clients (including tech support, developers and designers).
If you currently use another company for your telemarketing efforts, save that cost and start integrating a giving platform that will get your donors to connect to who you are and what you do.
By conducting a SWOT analysis this will help you gain a better and stronger understanding. It will also help you determine gaps.
Mailouts
Trends
This is a popular method of both soliciting and receiving donations.
Kate Bahen, managing director for CI, stated 48% of people who open the mail give back to the charities that sent them the mailouts.
However, Bahen also said surveys show that donors strongly dislike it. It is, in fact, one of their top five hates. Why? Donors are tired of seeing mailouts and, with emerging environmental consciousness, find it wasteful.
How to incorporate Crowdfunding
You should have a CRM in place to track a donors’ preferred method of outreach. Send mailouts only to people who have requested them. Any new donors who subscribe to your communications should have the option to opt-in to mailouts.
For donors who want mailouts, align your fundraising campaigns with crowdfunding.
For example, start advertising the new crowdfunding campaign with mailouts, prior to launching it. Create some buzz and excitement.
Door-to-Door Fundraising
Trends
Despite a growing dislike of door-to-door fundraising, it remains an effective way to fundraise.
In the UK, almost three million people have donated to a charity in the past five years after a fundraiser went to their door. The Institute of Fundraising estimates that £360m has been raised through door-to-door.
However, door-to-door canvassing is one of the top reasons people have a poor impression of charities. Unsurpinsgly, they cite it as an intrusion.
How to incorporate Crowdfunding
Your current fundraisers can still help in this respect.
Use the same staff or volunteers and train them on a giving platform that utilizes peer-to-peer fundraising. Have them create peer-to-peer fundraising campaigns for you. So, you can reach donors how they want to be reached, which is online.
When doing this, fundraisers can help boost donations but online, which can allow them to reach their personal networks.
Need A Platform That Does Both Crowdfunding and Traditional Fundraising?
Direct mail, door to door and charity calling are decreasing in popularity. However, capital campaigns and mega-gifts are still key to your fundraising goals.
Make Giving Happen’s platform is built on leveraging capital campaigns and mega-donors’ donations, with crowdfunding.
The MGH Cascade Funding Tool can support any capital campaign and traditional giving programs. This unique set of tools supports unrestricted funds and focus or directed funding (crowdfunding) on the same platform at the same time. This allows your mega-donors to use a platform to donate directly to you or to an area of need.
Capital campaigns can be easily posted on the platform. Our Lead Projects feature is a method of targeting donors who can make a large contribution. While also creating smaller, more targeted campaigns that funnel up to the bigger picture (for your smaller givers).
Having a large campaign goal may scare off some donors. This feature allows you to target mega-donors for capital campaigns but also appeals to donors who want to target their donations to the smaller campaigns, which also allows you to identify your crowdfunding audience.
Make Giving Happen also provides:
- The ability to count donations towards a campaign that is not yet live on your platform (pre-donations)
- Creation of Peer-2-Peer (P2P) capabilities and a community of fundraisers who run campaigns for you
- The ability to incorporate cash, cheque or phone donations
- A seamless mobile experience
- Integration with popular email platforms
- Social media sharing and social media login
- Hosted tech support
- 24/7 live support and resource kit
Want to learn more about how to leverage traditional fundraising and crowdfunding? Don’t hesitate to get in touch at letsgetstarted@makegivinghappen.com !