Crowdfunding and peer-to-peer fundraising are two creative ways in which nonprofits can continue to fundraise when in-person events are canceled. Crowdfunding, which will be a $96 billion industry by 2025, allows nonprofits to share their story creatively on an online platform. Peer-to-peer fundraising allows nonprofits to leverage social networks to fundraise on behalf of them. Nonprofits that utilize the latter method often raises twice as much compared to traditional techniques.
- Crowdfunding is a creative way to tell an organization’s story and attract donations for small campaigns all year-round.
- The crowdfunding industry is expected to be worth up to $96 billion by 2025 , and many believe it’s “a valuable tool” for charitable nonprofits looking to fundraise. As of August 2018, the biggest crowdfunding achievement in the United States raised $41.6 million, which assisted victims of Hurricane Harvey.
- Nonprofits implement this strategy by first exploring the best crowdfunding platform for them since some are specific to various industries. Then, nonprofits should detail their personal story, create marketing materials that will attract the targeted audience, potentially have a reward system for donors, and spread the word about the crowdfunding campaign.
- Crowdfunding is a successful method for nonprofits during COVID-19 because at a time when in-person events are canceled, crowdfunding platforms “reach a much more diverse audience than a nonprofit’s regular audience.” The crowdfunding campaign can also be easily shared online, which creates discussion and builds relationships among donors and nonprofits.
- For example, the San Francisco Ballet canceled more than 60 percent of their season because of the coronavirus pandemic. To compensate for lost revenue, which is $9.5 million, and keep employing their staff members, the organization started a crowdfunding campaign. They used videos and photos to attract attention, and by clearly stating how donations will be used, they help supporters feel connected to the organization’s mission. Donations have been pouring in for the organization, including from Hearst Foundations, which donated a $500,000 grant.
- Another example includes Another Round, Another Rally, “a nonprofit financial resource for the hospitality industry.” They created a virtual hospitality tip jar on a crowdfunding platform and explained what each amount of donation will fund. To date, they have already raised $1,232,075 out of their $1,500,000 goal.
2. Peer-to-Peer Fundraising
- Peer-to-peer fundraising is a strategy that leverages social networks to fundraise on behalf of an organization. Nonprofits contact friends directly, and supporters can share the organization’s fundraising page “via social media, email, or text” among their network. Nonprofits are able to track their progress and since they are able to access their “network’s network,” they can reach a greater number of donors through this method.
- Nonprofits implement this strategy by first creating a fundraising site, and providing details about the organization and its purpose. Nonprofits should be creative when telling their stories such as by sharing photos. Organizations should then share the fundraising page with their network, and continue updating their supporters throughout the process.
- Peer-to-peer fundraising is a successful method for nonprofits during COVID-19 because at a time when in-person events are canceled, this type of fundraising helps further build existing relationships, gain access to a new audience, builds awareness, and organizations typically “raise twice as much” compared to traditional techniques.
- For example, Upaya Social Ventures canceled their annual gala because of COVID-19 and decided to host a virtual event instead. “Upaya designates table captains to drive donations from people sitting at their table” during actual events. When they decided to host a virtual event, the table captains became “peer-to-peer fundraising team (captains).” Each captain created a personal team fundraising page to drive donations, and were able to get funds from not only from people who were to originally sit at their table, but others as well. Upaya’s goal was to reach $200,000, but they raised $283,954 through peer-to-peer fundraising.