You have a cause that you believe in, and you want to contribute. But your means are not enough to support it. if this describes you, it’s time to crowdfund for your cause! Crowdfunding helps individuals network and pool their contributions to support a cause.
Crowdfunding for a cause is a time-honored job. The cause may be charitable, personal or social. According to Statista, the Statistics portal, crowdfunding for social causes was the most active funding category in 2012.
So crowdfunding definitely plays a big role in philanthropy. But over the years, trends have definitely changed. According to Massolution, funding in 2014 for social causes was 18.9% of the total crowdfunded funds. It is way behind that for business & entrepreneurship, at 41.3%.
We make a living by what we get, but we make a life by what we give. – Winston Churchill
In the first week of December 2015, the South Indian city of Chennai was hard hit by rains. Many people lost their life savings. That same day, appalled at the situation, city resident Vaishnavi Ramkumar appealed for funding via Gofundme. Her goal was to collect about $5,000 from her family and friends to help the victims. The campaign exploded beyond all expectations. In 21 days, she gathered $161,000, exceeding the targeted $150,000. She has planned to transfer the amount to NGOs involved in the cause. Likewise, the crowdfunding platform Ketto raised around $1,00,000 in 5 days for the same cause.
Last year before Christmas, a fire destroyed the home of Kevin Wagner and his family in Massachusetts. They lost everything. His friends immediately stepped in with help. They started crowdfunding campaigns on the popular crowdfunding sites DreamFund.com and GoFundMe.com. They quickly raised around $35,000 through these platforms.
Similar stories can be heard on a daily basis. But it is the ‘whys’ and ‘hows’ of crowdfunding which often confuses people.
Why use crowdfunding for causes?
The traditional way of funding causes is to accept cash in person or through check deposits in a bank. This method involves no extra costs, but it has limitations. There is an extent to its reach. Here’s when crowdfunding platforms shine. The Network for Good (NFG) 2014 Digital Giving Index, provides insight on the $233 million of donations received by 45,000 nonprofits. According to NFG, online giving grew by 9%, when overall giving grew by just 3%.
Reasons for the popularity of crowdfunding for causes include:
- The Master Plan – Charity begins at home. Everyone has the impulse to donate to a cause. But someone needs to channelize it. Crowdfunding provides this direction and framework. It allows you to support the cause with whatever amount you can spare.
- Small Drops Maketh The Ocean – Causes need huge sums of money. People might be reluctant to think that a drop of water in the ocean might not make a difference. But crowdfunding enables pooling, so you can raise huge funds without burdening any one person.
- Word Of Mouth – Nothing can get your cause more publicity than a popular website. If your story is compelling enough, it can go viral and gain momentum with much-needed buzz.
- Every Dollar Counts – Many online sites have now dropped the platform fee for crowdfunding for causes. This helps you save on campaign costs. The crowdfunding platform Indiegogo charges 4 % to 9 % (plus fees for PayPal or credit card processing) as a transaction fee. This is in addition to a credit card processing fee. They have dropped this fee for personal fundraisers. Danae Ringelmann, their co-founder, opines that they did not want to charge equal rates to those who charity and those who are launching a business. Smaller sites like YouCaring.com have a no-fee policy for ‘crowd funding for causes’.
- New Partnerships – Buzz from the crowd helps your campaign get noticed by the local business community. This will speed up fund generation and gain support.
- Ease Of Implementation – Online portals ease the hurdles of regular fundraising. They add professionalism to this avenue. Most sites also offer related services such as a donation manager, fundraising tools, training, resources, etc.
Not a panacea for all ailments…
On the other hand, there has been rising criticism against crowdfunding sites. Many sites charge hefty transaction fees, regardless of whether the campaign is for a cause or charity. This is because this is yet another skyrocketing business. As per sites like GoFundMe, such fund-raising campaigns increased by 291% between 2013 and 2014, after rising by more than 500% the year before. Some 2,000 similar sites have sprung up to cash in on this trend. Don’t be put off by the profit motive of the platforms. As mentioned, many sites are cutting down on their transaction fees for charity fundraising. Use those platforms with genuine intentions, and hope that more platforms rise to cause and drop their transaction fees.
How do you do crowdfunding for causes
Fundraising involves time. It requires planning and commitment. Let’s check how you can do this, step by step.
- Cause – As we always say, start with clarity of purpose. If you’re passionate and crystal clear about the cause, you can break down the barriers of scepticism. Clarity of cause also helps finalise the amount to be raised and who to contact.
- Planning – Research how to reach like-minded people, and prepare a list. Prepare a budget and decide how to spend each penny. Equally important is your storyboard. Your cause is convincing to you. But you need to convey the idea to donors. So craft your storyboard in a convincing manner, with relevant pictures. Also, decide how to do the follow-up. Time your fundraising and prepare time-bound schedules.
- Organising – Start publicising. Start with like-minded people in your immediate circle. Start sharing information through your social media accounts.
- Implementing – Once you’ve built the hype, put the plan in place. Launch through your fundraising site. As already mentioned, some sites have discounted transaction fees for funding charities. Keep this in mind while choosing your platform. Also, most sites offer training, tips, and support for online fundraising. Make use of them to help your cause reach a wider audience and generate huge response. Once the funds are raised, use them as planned and give updates to your donors. GoFundMe, Indiegogo, Causes, StartSomeGood, Causevox, Rockethub, YouCaring.com, etc. are some popular sites.
Don’t let the scarcity of means deter your spirit. Take advantage of the convenience of crowdfunding to fund your cause. Move on – and be the change you want to see in the world!