Crowdfunding Best Practices

Crowdfunding for Nonprofits: What You Need to Know

Gayatri Bhaumik

by Gayatri Bhaumik

On 2019 M12 17

by Gayatri Bhaumik

Crowdfunding has proven to be a game-changer for intrepid entrepreneurs looking to raise funds to get their business off the ground. But, crowdfunding for nonprofits is also becoming something of a trend. With many nonprofit organizations needing different ways to raise funds, crowdfunding has become a major lifeline that helps them keep their operations going. In fact, many nonprofits function purely on the money they raise through crowdfunding. There are around 191 crowdfunding platforms in the US alone, and this has contributed nearly US$65 billion to the global economy.

Large organizations and businesses are able to find monetary support from financial institutions and governments. But, this is not always the case for nonprofits working in small communities and with specific causes. Under these circumstances, it can be very hard to get the seed money for an operational budget. This is where crowdfunding comes in to save the day. Many small nonprofits are now putting their campaigns on crowdfunding platforms to be more visible to the public, and people who consider the cause important or believe in the project choose to donate to the campaign.

Of course, this is all theoretical. In practice, so many nonprofits put their projects on crowdfunding platforms that with such a big market, getting the necessary funds can be harder than it sounds. For a nonprofit to crowdfund successfully, it takes a lot of knowledge and effort. To give you the best chance for success, this article will give you a few smart crowdfunding tips for nonprofits.

Crowdfunding Tips for Nonprofits

  • Understand your target and audience. Pick an attainable target, something you believe can be realistically reached. Don’t chase after the impossible in the name of a good cause.
  • Know your audience. It is very important who your audience is and what types of messaging works with them. This way, you’ll be able to design your messaging to appeal to what’s important to them and give you a better chance at engaging them in your cause.
  • Choose the right platform. There are nearly 200 platforms where you could launch your fundraising campaign. You may think that going for the most popular ones will give you the best chance of success, but do your research and find a platform that’s best suited for your particular crowdfunding campaign type. where you can project for your campaign.
  • Focus on your campaign and crowdfunding page. Make videos to promote your campaign and use social media to spread the word. Do everything you can to get your cause in front of your target audience and convinced them to donate funds to your nonprofit.
  • Consider using peer-to-peer fundraising to reach a wider network. In this type of fundraising, donors can make pages of their own for fundraising that links directly to your campaign. You can create your own campaign, and if visitors can’t donate themselves, they can make their own fundraising page to promote your cause to their network.
  • Show your appreciation for your donors by giving them incentives. Small surprises like concert tickets or discounts at local restaurants can be a very effective way to show your donors how much you value their contributions. You can also showcase these surprises on social media to encourage more donations.

Best Crowdfunding Sites for Nonprofits

Crowdfunding has become so big that there are now more than 200 platforms out there. But, not all of them are suitable for nonprofit campaigns. If you’re looking to begin crowdfunding for nonprofits, then the first thing you need to do is figure out what is the best crowdfunding site for nonprofits. To make this easy for you, we’ve put together a list of the best options out there.

Fundly

This is probably the most popular solution for nonprofits, and for good reason. If you’re looking for the best platform for crowdfunding to start a nonprofit, this should be one of the first options you should consider. The free platform allows users to customize their pages and offers integrated sharing for social media. It also encourages regular page activity through engagement with donors and visitors. You could do this by posting regular updates that keep your contributors informed about your activities.

While the platform is free, there are a few transaction fees involved. Each donation is charged a 4.9% fee by Fundly. This is on top of a 2.9% credit card fee and a USD$0.03 charge per transaction.

Donate Kindly is one of the best crowdfunding sites for nonprofits, especially small ones. On this platform, organizations get free, powerful tools for crowdfunding. Users can create unlimited pages with full customization options. It’s also very easy to set up and use.

The best part is that Donate Kindly is free for nonprofits. There is no setup fee, no maintenance fee, and no hidden charges whatsoever.

Donately

This is another one of the top platforms for crowdfunding for nonprofits. It is an easy-to-use platform where making pages, customization, and data analysis is as easy as it gets. It is a very popular platform for both online and offline donations. That’s because Donately will note only accept online donations, but can assist with donates given in person at fundraising events.

Donately charges a 3% fee on the first US$100,000 your organization raises. In addition, there is a 2.9% credit card fee and a US$0.03 charge for each transaction. Similarly, ACH payments attract a 0.8% fee, which is capped at US$5.

Mighty Cause

Formerly known as Razoo, this platform was rebranded as Mighty Cause in 2018. As Razoo, this crowdfunding platform was for everything and everything, from business and personal campaigns to nonprofits. After the rebrand, though, they have focused solely on small and medium nonprofits. If you’re based in the US, you need to be registered as a public charity organization to use the platform. However, for nonprofits located outside the US, there is no such restriction.

Mighty Cause offers two plans, an entry-level standard plan and an advanced product for bigger organizations. The standard plan is free and offers all the management and customization features needed to run a campaign. The advanced plan costs US$99 per month and offers powerful tools like CRM, donor management, customization, branded donor receipts, data integration, survey, and data analysis.

Whichever plan you’re on, there are additional fees. Mighty Cause charges processing fees of 1.08% plus US$0.29 on each transaction.

FundRazr

FundRazr is a Canadian platform that has been around for over 10 years. During this time, it has become one of the leading crowdfunding platforms. It is especially useful for nonprofits because it has a great reputation among donors and organizations. They’re very particular about the person who has control over each account. That’s why each campaign must have an authorized person from the organization to be the main point of contact for each FundRazr campaign.

The platform offers two plans - one free, and one at cost. The pro plan charges a 5% platform fee because it offers an advanced tool suite for high-level campaigns. Transaction fees for each donation is 2.9% and US$0.03.

Crowd Rise

This platform was formed in 2010 and used to focus on personal causes and nonprofits. However, it was acquired by GoFundMe in 2018 and since them, the platform is only used to crowdfund for nonprofits.

The Paid Essentials plan has a 5% platform fee and charges 2.9% and US$0.03 to process all transactions.

Hope Mob

This is a very effective platform for nonprofits and currently boasts over 10,000 members. Among their crowdfunding success stories is an organization called The Supply, which builds schools in Nairobi. The platform was created in 2012 and is exclusively for nonprofits.

Hope Mob is a free platform. However, they charge a payment processing fee of US$0.25 for each transaction over US$25. There are no fees for donations under US$25.

First Giving

This platform has been around for more than a decade. Big nonprofits like Habitat and the Special Olympics are included in their success stories. It has useful features like event registration, credit card processing, and quick fundraising page creation for new members.

Rocket Hub

Rocket Hub is one of the most popular and successful crowdfunding platforms for nonprofits. It does charge fees, but these are based on the success of each campaign. As a mark of the platform’s success, Rocket Hub was featured on “Project Startup”, a show on the A&E television network.

Causes

Causes is one of the largest crowdfunding platforms around today. More than just a fundraising platform, it’s also a social awareness network. Its user base of nearly 186 million comes from around 156 countries around the world. Currently, it only allows registered charities to create campaigned. However, these can also be used to start petitions and pledges.

Bonfire

This is another great platform for crowdfunding for nonprofits. With Bonfire, you can even design and print t-shirts for your campaign. You can then market and sell these to help raise funds, all without worrying about upfront costs.

Creating a campaign on Bonfire is free, but there is a processing fee of 8%. However, these fees drop to 3.5% if you register as a verified nonprofit.

Start Some Good

Start Some Good is perfect for crowdfunding for nonprofits as it only does fundraising. In addition, it offers a nine-part email course to teach nonprofits effective crowdfunding. There is a 5% service fee charged on each donation, however, these only kick in if the campaign reaches it goals.

Crowdfunding for Nonprofits: Use Best Practices and the Right Sites

Crowdfunding can be a great way for nonprofits to raise funds for their cause. Donors who believe in the cause can donate whatever money they can without worrying about legal complications. Whatever funds are collected through crowdfunding for nonprofits can then be used to set up and run the organization. There are many platforms that are considered to be the best crowdfunding sites for nonprofits, but you’ll need to do your research and evaluate each one to find a platform that suits your campaign.

Easyship can be your facilitator for your crowdfunding campaign. We offer shipping support for many popular crowdfunding platforms, including Indiegogo. Easyship also offers discounted shipping rates for nonprofits sending rewards to donors and backers after their crowdfunding campaigns. Sign up for free to use our services for your nonprofit today!