Crowdfunding Dreams

September 2, 2014       Patrick Sullivan      

Crowdfunding is no Field of Dreams: If you build it, they might not come. “If you build it, you need to push it out and tell everyone about it, and then they will come,” said Stephanie Truax, director of development for the Partnership for a Healthier America (PHA).

If your organization is dipping its toes in crowdfunding, it probably has some base of support from traditional fundraising efforts. But, what if it doesn’t have that base? Truax found out first-hand what it takes to start a crowdfunding program from scratch.

The process and results from two organizations were showcases recently during a session at the Bridge To Integrated Marketing conference in National Harbor, Md.

PHA was started in Washington, D.C., with seed money from a few foundations and corporate partners. When organization leaders wanted to start a crowdfunding program, they found themselves hampered by having no prior donors. “Our problem was we never developed a base of support,” said Truax. “People were also concerned about our image: do we want to be seen as a fundraising organization?”

Another problem PHA encountered was that the organization would receive small, unsolicited gifts and didn’t know what to do after they received them. “The key for us is donor stewardship, making sure we don’t lose these donors,” said Truax.

PHA decided to go with a crowdfunding platform to “(take) the place of an everyday online giving function, and it’s working very well for that,” said Truax. The organization raised $17,000 in its first year. “This has been a pleasant $17,000 (to raise) because it’s a quiet stream that’s coming in with minimal effort,” said Truax. “The extent of human resources is me working with (the) communications (team) to make sure the messaging is on point, and repurposing photos and videos.” She added that the only expense is the platform’s administration fee.

Another advantage of using crowdfunding for everyday giving is the ease of creating what Truax called mini-campaigns. “We’re turning moments into mini-campaigns,” she said. “We’re creating opportunities to give, things we’ve done that we might not have tied to fundraising we’re now thinking about.”

Mini-campaigns can work, and so can major campaigns, as managers of the Smithsonian Institution’s Freer Gallery of Art and Arthur M. Sackler Gallery found out. “Yoga: The Art of Transformation” was the Smithsonian’s first crowdfunding campaign, said Miranda Gale, public affairs specialist.

The campaign garnered $176,000 from 617 donors, 75 percent of whom were new to the organization. “Online engagement was through the roof and there was incredible media attention,” said Gale. Attendance was more than double that of the last special exhibition.

Gale said she learned a number of lessons from her first crowdfunding campaign:

  • “You will need more time than you think,” she said. Gale had six weeks but could have used six months to prime her audience and get everyone in the organization on board.
  • Along with the first lesson, “You will need more staff than you think,” Gale said. She spent 100 percent of her time managing the project. “It’s not something that could be delegated to one person.
  • A campaign kick-off event is a great cultivation tool, and Gale found it better than a thank-you event at the end of the campaign.
  • Social media is crucial for awareness, but email drives donations. The yoga exhibit emails had a response rate of 0.07 percent and an open rate of 13 percent. Run email and social media campaigns concurrently.
  • “Lean on your friends,” said Gale. Members will give again, and major donors can make a big impact. “Give them advance notice and make them insiders,” she suggested.
  • Gale said crowdfunding campaigns in general have big spikes in the beginning and at the end, but valleys in the middle. The Smithsonian planned a matching grant in the middle of the campaign to drive donations.

Finally, curveballs will happen. The last, strongest email might not get delivered, said Gale, which happened during her campaign. Other curveballs (that not every campaign might experience) included the government shutting down and a celebrity spokesman announcing his involvement at an inopportune time. NPT

NonProfit  Times
The Leading Business Publication For Nonprofit Management