A crowdfunding challenge for communities
Should small charity and voluntary organisations jump on the crowdfunding bandwagon? Will it be useful for your organisation, or a red herring? Here are some ideas about how to decide if this new income stream will lead to hard cash, or just hard graft.
Last year NCVO ran the Crowdfunding Challenge together with Buzzbnk, which took nine organisations through the entire process, from start to finish. I captured a lot of learning from that experience, and here are some of the most important questions a prospective crowdfunder should ask themselves:
1. Do you need a tool to allow your supporters to become fundraisers?
Think about the times your friends have asked you for sponsorship. You might not have known the charity they were raising money for, but you gave anyway to show your support of your friend. In a similar way, we suspect crowdfunding, when linked with an ask individuals are passionate about, could enable and inspire your supporters to start fundraising on your behalf. It is a similar idea to the Cancer Research 'My Projects' initiative, which lets people raise money for the fight against a specific cancer. It personalises the fundraising and lets people take ownership and responsibility in the same way a sponsorship target does.
2. Would you benefit from a focus for rapidly improving your offer to donors?
Organisations on the NCVO Crowdfunding Challenge really benefitted from this - just the process of setting up their webpage and thinking about how they communicated with individual donors in a very focused and time-bound way helped to kick start donations as a future income stream. It can be really hard to make the shift to doing something new without a bit of a shove - crowdfunding, by its targets and visibility, could give you this push.
As one of the participants told us, "The whole crowdfunding approach... really got us out there 'asking' and being really clear about what we needed - as they say, if you don't ask!"
3. Could you consider crowdfunding as a low-level way of engaging with social investment?
Now I haven't seen the stats on this, but the argument seems compelling - sometimes, asking for a loan is more likely to be successful than asking for a donation. Especially if you are raising money for a new initiative that might make money in the future. Asking for a loan says you are confident in your proposal. And it says that you'd like your supporter to be involved as a stakeholder. It also might convince someone to give again when they feel they've donated as much as they can. In short, it is quite a different offer. Many crowdfunding platforms allow you to decide whether to raise money from a donation or a loan or a combination (and the Nesta directory lets you search by type).
However, I give these three suggestions on the proviso you remember my warning about the amount of time crowdfunding can take! It is not an easy-win and it is not something you can just tack on in your spare minutes. Perhaps consider taking on an extra person (staff or volunteer) to help coordinate it and publicise the initiative, or certainly make sure you run your appeal at a time when your workload is due to be a bit quieter.
The approach can have different benefits for different sizes of organisation. For example a larger organisation can use crowdfunding to give their regular donors a new way to help and to develop a mixed form of finance for new projects. On the other hand a smaller organisation can make it part of a package of community activism. As one of our Challenge participants said about their volunteers, "I think their involvement in the fundraising and promotion before we even started the project have supported a real sense of ownership."
Take a look at our blogs and resources from when we were running the NCVO Crowdfunding Challenge in partnership with BuzzBnk last year for some more information about what to expect. Nesta have also produced a helpful guide introducing the method and how it can work for you.
Rosaline Jenkins is NCVO Consultant on Sustainable Funding, providing advice and support to voluntary organisations on income strategy and new fundraising initiatives.