Crowdfundamentals for Nonprofits

March 30, 2016

Estimated Reading Time: 3 minutes

Crowdfunding. It’s been on your radar for years now, but when the time comes to actually start a crowdfunding campaign for your nonprofit, you still feel a little in the dark.  Sound familiar?  Read on.

just what is crowdfunding?

Crowdfunding is actually very simple. All it means is “any effort to raise money through donations from a large number of people.” Most likely, you’re already doing some form of crowdfunding now!

For nonprofits, crowdfunding typically refers to: a focused fundraising campaign hosted on a website with: 1) a specific project in mind, and 2) a tangible goal and end-date.

Successful crowdfunding campaigns focus in on a highly specific project or cause. This is because it is easier to rally mass support around a smaller issue that is relevant and measurable than it is to convey the entire mission of your organization or raise support for ongoing general needs. People have limited attention spans, especially on the internet! On the flip side, a targeted issue is far more likely to be shared widely AND to encourage giving.

Successful campaigns also focus in on a tangible goal and timeframe. Most crowdfunding websites display a prominent progress meter to show how much money has been raised toward the goal. This is for psychological effect – donors are more likely to give when they see that others are giving, and when time is running out to reach a goal! Pro tip: Before promoting any crowdfunding campaign to the public or your general donor base, bring together a network of dedicated supporters (including staff, board members, friends, and family) to donate first and start the progress meter rolling!

The Three Types of Crowdfunding

Digging a little deeper, modern nonprofit crowdfunding can be split into three categories (and three “P’s”):

  1. piggy bankDonation-Based Crowdfunding (or “Purpose” Crowdfunding)
  2. Reward-Based Crowdfunding (or “Perks” Crowdfunding)
  3. Peer-to-Peer Crowdfunding (or “People” Crowdfunding)

Donation-based is crowdfunding at its most basic form.  Supporters visit your crowdfunding site and donate online to help you reach your goal, without receiving a reward in return. These simple crowdfunding campaigns are most effective when your organization showcases a compelling, rich story to let supporters know your purpose and how their donations will make a real impact.

When throwing a donation-based crowdfunding campaign, it’s a great idea to use giving levels, or explanations of how much money is needed for a specific action. For example, $10 equals 1 book for a classroom, or $50 equals 1 week’s worth of food for 1 person. While these giving levels are not physical rewards, donors will feel a similar effect to receiving a gift simply by knowing that their contribution has a measurable outcome. Flipcause’s donation tool includes built-in giving levels to easily convey the impact of each donation.


Rewards are items or services given to a supporter in exchange for donating a certain monetary amount. Reward-based crowdfunding websites allow organizations to set up rewards for various donation amounts. These rewards are highlighted on the crowdfunding site to encourage visitors to claim them.  Rewards can be as simple as a thank-you note, a credit on your website, or a branded t-shirt, or as complex as a package of goods and services. It depends on your organization’s bandwidth for packing, shipping, and distribution- don’t forget to plan ahead and calculate your time!

As attractive as rewards-based crowdfunding can sound,  there is some evidence that rewards can actually detract from your goal of raising funds. This happens essentially by making donors feel greedier, less altruistic, and thus making smaller contributions overall. If you do want to offer rewards for donations, the best type are “impact-based” rewards. These are rewards that foster a connection between your cause and your donor, such as a letter written by a student who got a brand new classroom because of your crowdfunding campaign, or a hat made by an artisan in your arts collective.


Peer-to-peer crowdfunding has taken off like wildfire in the past couple of years, for good reason. With peer-to-peer campaigns, your organization can enable supporters to set up fundraising pages of their own to raise money on behalf of your organization. Peer fundraisers- who could be your staff, board members, program participants, friends, or family- can easily tell and share their story of how your organization has impacted their lives. Leveraging the network effect, peer-to-peer crowdfunding is likely the most effective type of mobilizing the crowd for your cause. It doesn’t require too much overhead to set up, and incentivizes supporters to donate through truly personal connections.

Let’s get started!

Crowdfunding is absolutely here for the long haul. It is a great way to compel donors to act, whether it’s for your organization’s purpose, for perks and rewards, or for the people directly in their lives.  Flipcause has all the fundraising tools your organization needs for a successful crowdfunding campaign- donations, rewards, and peer-to-peer!  No matter how your organization decides to reach the crowd, it’s time to get out there!


Leave a comment

Your email address will not be published. Required fields are marked *