The most exciting evolution of the giving economy in the past ten years is crowdfunding. But crowdfunding is simply a new name for one of the oldest forms of fundraising.
Throughout history, communities joined together to support those in need. Crowdfunding is the 21st century version of this age-old process for harnessing the power of a crowd.
Crowdfunding today sits at the intersection between communities, online, social, and giving. And it is more than just a strategy for one-off projects; it should be a core strategy for annual giving. (Tweet this)
And nonprofits are just arriving at the party.
“Used strategically, crowdfunding helps nonprofits build meaningful engagement, inform their work, spread their messages, and expand their donor base to increase their overall funding and impact.”Crowdfunding the Annual Fund?
What? Really? We say, Yes!
And you know what’s really exciting? You already know how to do it.
Crowdfunding leverages the skills and experience that you use everyday as a fundraiser. At its most basic level, the process of developing a great crowdfunding campaign is a lot like developing your major donor outreach strategy.
“It’s not about restricted or unrestricted; it’s about the donor, and giving annual fund donors the same quality of experience its high-level donors have—more project choices, greater ability to direct their gifts, and expanded engagement,” according to Margaret Paine, the director of advancement communications at Middlebury College.
What are the parallels between crowdfunding and major donor engagement?
Can it be…Labor Day weekend is really behind us? 2014 is in the home stretch and that means it is crunch time for nonprofits.
In fact, 30% of the projected $300 billion in total annual donations to charities are made in December — and 10%, or $30 billion, come during the year’s last 48 hours. (Source: NY Post, December 2013)
For most nonprofits, it’s make or break time. And for donors, whether they are motivated by making an impact or by the tax year, December underlines the urgency of giving.Countdown to #GivingTuesday
The movement that has changed the December giving season since 2012 is #GivingTuesday. It started with a simple idea – to be a counterpoint to the consumerism of Black Friday and CyberMonday. From a couple hundred nonprofits in 2012, #GivingTuesday has grown into an international day of giving with organizations and donors around the globe joining the movement.
Traditionally, year-end givers to nonprofits are loyal supporters or those with personal ties to an organization. Now, nonprofits can harness the energy of #GivingTuesday to engage new donors, and to extend and amplify the giving season.
We know first hand. Last year we led BMoregivesMore, the campaign to make Baltimore the most generous city in America on #GivingTuesday. Nonprofits that participated in BMoreGivesMore reported that between 20% and 60% of donors on that day were new. And more than 80% who shared their results said that they had a comparable or better December overall!
“Over the past decade colleges and universities of all stripes have struggled with a truly stunning national decline in alumni participation rates: More than a third fewer alumni make a gift of any size to their alma mater today compared with alumni 10+ years ago.”
—Cara Quackenbush of Eduventures
The cost of college, the rise in student loan debt, a weak economy, and uncertain job prospects have all contributed to the rapid decline in alumni giving.
These are issues that advancement offices can’t control.
But there are many factors that drive participation and giving that ARE in the hands of Higher Ed advancement pros and marketers.
The fix for declining Higher Ed participation rates is a reinvention of the Annual Fund.Think (and act) like a Crowdfunder
The most exciting evolution of the giving economy in the past ten years is Crowdfunding. And Higher Ed is just arriving at the party.
Crowdfunding sits at the intersection between communities, online, social, and giving. It is more than just a strategy for one-off projects; it should be a core strategy for annual giving.
According to Andrew Gossen, Senior Director for Social Media Strategy at Cornell, “Crowdfunding is far more than just a tool for raising money online. It’s also a means of driving participation, teaching a culture of philanthropy, communicating effectively, mobilizing constituents’ networks on behalf of the institution, building and cultivating a donor pipeline, and a fantastic mode of stewardship.”
So, how can you take advantage of this new way of looking at your annual annual fund? I recently presented some ideas with Dayna Carpenter of University of Maryland Baltimore County during this year’s eduWeb conference. Download the presentation for more inspiration for transforming your alumni giving program.
In the recently released Individual Donor Benchmark Report, the folks at Third Space Studio and BC/DC Ideas looked at fundraising data for organizations with budgets under $2 million. The report contains a wealth of information—including insight on donor communication, recurring giving programs, and technology use—that can help small and medium nonprofits understand how to best reach potential donors.
The research also observed data practices of small nonprofits. Not surprisingly, these organizations often struggle to collect and use their own data to optimize their fundraising approach. Since this information can make a huge difference in the success of a campaign, how can fundraisers make the time to dig into their data to identify new opportunities and communicate more effectively with donors? Consider these three tips on getting started from Third Space Studio’s Heather Yandow:
1. Start small.
It can be overwhelming to think about all of the types of data you could be collecting. If you’re just starting out, focus on tracking just a few key metrics like number of donors, number of new donors, and average gift. Also consider the reports built into your database and fundraising tools.
2. Get the most bang for your buck.
Understand which metrics have the most impact on your fundraising program and start there. Are you struggling with keeping donors year after year? Take a closer look at your retention rate by type of donors (volunteers, activists, major donors) or by channel (online, direct mail, events). Are you considering moving from direct mail to online only? Try an experiment with a subset of your donors and track the results. (Try this simple worksheet to design and track your experiments.)
3. Make it easy for Future You.
Keep a record of how you define your metrics and how you measure them. A year from now, you may not remember if lapsed members meant someone hadn’t given in one year or two – or if you counted people who bought tickets to your special event as donors. Be sure to capture those distinctions, including how you tricked your database into giving you the data you wanted, in a safe place so that Future You can calculate the data in the same way next time around.
How are you using your fundraising and marketing data to shape your approach with potential and existing donors? Share your tips and challenges in the comments below!