Don’t Just Fundraise: Crowdfund
Fundraising in the 21st century is not just about the bake sale anymore. Today technology is helping to open up fundraising opportunities to many. Crowdfunding is harnessing the power of technology and helping people around the globe donate to projects they might not have heard about before.
Crowdfunding “is a collective effort by people who network and pool their money together, usually via the Internet, in order to invest in and support efforts initiated by other people or organizations.”Crowdfunding allows individuals with a common interest or goal to raise money while also allowing other individuals, no matter how near or far, to get involved and contribute if they support the goal.
Crowdfunding is being used by libraries for many different purposes. A look at some online crowdfunding sites finds projects for repainting a local public library, purchasing books for a library in South Africa, building little lending libraries across the country, and many more. Many libraries have turned to crowdfunding as a way to boost donations, especially from individuals who may not be able to get out to a typically library fundraising event.
While online donations have been possible through credit card and PayPlay links, crowdfunding allows an organization to focus on a specific project or goal and use the crowdfunding platform to more widely promote the project. Online services for crowdfunding typically include the ability for creators to upload videos and share details about their project. Many crowdfunding sites also allow creators to offer incentives for contributors. Creators may offer t-shirts or hand written notes as an incentive to people to contribute to their project.
In additional to libraries, other industries are also turning to crowdfunding to boost funding. Crowdfunding projects for everything from digital thermometers, cell phones for everyone, research support, and even college tuition are seen online.
While crowdfunding is taking off, it is important to be familiar with the terms of service associated with the many online crowdfunding sites. The Library Journal article Crowdfunding the Library explores some of the ins and outs of crowdfunding for library purposes. The article includes information about some library projects and first person experience with crowdfunding for a library.
It is important to consider that online funding sites typically keep a percentage, usually very small, of the funds raised as overhead for platform use. For most sites this fee is only charged when a specific goal is met.
An overview of some of the most popular crowdfunding sites is provided in the list below (alphabetical order):
- Crowdtilt – Legally certified in securing fundraisers for non-profit organizations. Users are allowed to contribute to and create campaigns of their choosing. A 2.5% fee is charged only if a campaign successfully reaches its goal.
- Funding4Learning – Helps students raise financial resources for study, volunteering and education related initiatives. Uses PayPal as their main provider for all the fundraising payment’s processing and transaction services. Collected funds are disbursed only if the fundraising campaign is successful. However, a contributor is allowed to make a “direct contribution”, which is guaranteed to be paid whether or not the campaign is successful. Funding4Learning charges 5% of funds disbursed from a successful campaign, and 5% of all direct contributions.
- Fundly – Makes it easy for non-profits, charities, politics, clubs, schools, teams, churches, and many other causes to quickly raise money online from friends, family, colleagues, donors, and other supporters via email, Facebook, Twitter, LinkedIn, Google, and social media networks. It is also an app for social networks like Facebook and LinkedIn. It uses WePay to process donations. Donors are charged when they make a donation.
- GoFundMe – Allows people to raise money for events ranging from life events such as celebrations and graduations to challenging circumstances like accidents and illnesses. Allows users to share their project with people through integrated social network links and email. A special section of GoFundMe is dedicated to users who are trying to raise money to cover their tuition costs.
- Indigogo – Disburses funds immediately, when the contributions are collected through the user’s PayPal accounts. When your campaign raises funds, Indiegogo charges a 9.0% fee on the funds you raise. If you reach your goal, you get 5.0% back, for an overall fee of 4.0%. Registered 501(c)(3) nonprofits qualify for a 25% reduction in platform costs.
- KickStarter – Provides tools to raise funds for creative projects. Project creators choose a deadline and a minimum funding goal. If the goal is not met by the deadline, no funds are collected. Kickstarter takes 5% of the funds raised.
- Neighbor.ly – Civic crowdfunding website. Focused on helping local governments raise money for civic improvements. Designed to accept projects only from local governmental and civic-natured entities including; constitutionally chartered municipalities, county and metro-conglomerate government entities, public / private partnerships, and institutions, private, or non-profit organizations whose mission caters primarily to civic infrastructure (e.g. bike share startups).
- PetriDish – Crowdfunding for scientific research. Aimed at projects that might not be eligible for government funding as well as projects that need funding not typically covered by grants such as translating research into educational papers or projects. Charges a percentage of funds collected
A comparison of crowdfunding services can be found on Wikipedia.
Has your organization used crowdfunding? Let us know in the comments.