Hello SOTGC community,
As the executive director of a nonprofit, it’s part of my job to identify effective ways to raise money. Who am I kidding, it’s pretty much all of my job. And, it’s no cakewalk.
Asking for money is tough. A colleague told me yesterday that he’s more terrified of fundraising than major surgery. This is an almost ubiquitous fear. As a result of our fierce fundraising phobias, new ways of making “the ask” using online technologies are popping up everywhere.
The most popular and effective of the new online fundraising options is “crowdfunding” (AKA peer-to-peer fundraising). Even if you don’t recognize that term, I’ll bet you’ve seen it in action. Crowfunding raised over $5.1 billion (yes, billion) dollars last year.
Anyone can raise money for anything by taking a few minutes to set up a page on a fundraising platform, such as Kickstarter, Indiegogo, GoFundMe or Causevox. There are more than 600 of these platforms now and countless causes. I’ve seen everything from an appeal to save an orphanage in Haiti to a plea for money for a couple’s honeymoon.
But, launching a crowdfunding campaign does not ensure success. Understanding a few peer-to peer-fundraising “hacks” and stats can translate to thousands more dollars raised for your honeymoon.
Donor Psychology 101
The first step in launching a fundraiser is creating your page on the platform you choose, and this requires some strategy. There are books on buyer and donor psychology, and I’m offering just the tip of the insight iceberg here.
One of my favorites is something I only recently embraced. Line up some donations early and set your goal a little low. Turns out, visitors to your page are 22% more likely to donate to campaigns who have raised 40% of their goal or more. People want to be a part of something that’s popular and successful. The underdog phenomenon does not apply to fundraising.
More great donor psychology can be found in an article written by Rob Wu, founder of Causevox (our favorite crowdfunding platform) here. Some key advice there includes:
- Make your plea relatable. Many products and causes are not a part of your network’s daily lives. When setting up your campaign and visuals, create a message that is most relatable to your audience for better results.
- If you’re raising money for a philanthropic cause, focus on the progress that has been made for the problem so far instead exploiting the pain and tragedy. There has been a major shift in effective fundraising toward highlighting the positive.
- Create a sense of urgency. Be sure to emphasize the importance of contributing to your campaign now.
- Make the donor the hero. Include in your message how important the donor’s help will be in the success of your project.
Putting something visual on your campaign page will certainly improve your results. Images boost return pretty well, but video is the sweet spot for donors. Campaigns with personal video raise more than 105% more than those that don’t. Even a quick mobile phone video clip amplifies giving.
Getting the Word Out
After you have set up your fundraising page, it’s time to share it.
This statistic was a surprise to me: Emails have a more than 50% conversion rate (percentage of people who take action when contacted), while Facebook is only about 11%, and Twitter results in 4% conversion.
It may seem counterintuitive, since social media is so prolific in our lives, but there’s science and psychology behind it. The science is whatever algorithm Facebook has implemented that precludes most of your “friends” from ever even seeing your post. The psychology is the lack of personal connection (there’s more on this later)
Here’s another good stat: It takes an average of seven “touches” before a donor prospect converts to an actual donor. A touch is an email, text, tweet, post, call, etc. And, while it may feel like you’ve exhausted everyone’s patience with your pleas, it really does just take that much messaging to break into audience’s routine daily lives.
Your words are important here, too. Tell the story about why you’ve taken on this campaign, but keep it under 500 words. Campaigns that lack the who, what, and why are less likely to succeed. Change things up a bit, too, from time to time. Fundraisers with regular updates (announcements of milestones reached, new product/project news, etc.) raise a whopping 126% more than those with none.
Summing it Up
Crowdfunding has revolutionized giving- to causes, projects, personal struggles, and technological innovation. To execute an effective and successful campaign, though, there are layers of psychology and data-driven hacks. I hope this overview helps if you’re planning a peer-to-peer event, and I will be happy to answer any further question.
If you’re looking for a crowdfunding campaign to join, it just so happens that my organization’s annual Shower Strike launches next month. Participating in our “Strike” means you’ll be getting more clean water to people who have none. The time is now! Sense of urgency, see?