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What NGOs Can Learn from Online Crowdfunding

From unexpected earthquakes to devastating fires, NGOs fearlessly respond to devastating humanitarian crises across the world.

By Bill Taibl, Director – Legal and NGO

What NGOs Can Learn from Online Crowdfunding
What NGOs Can Learn from Online Crowdfunding

The impact of their contributions cannot be overstated, and their continued operation is paramount to the wellbeing of countless populations who might otherwise be forgotten. Charities and not-for-profits have a long and celebrated history. Through the financial aid of government grants, private sector contributions and individual donations, they are able to successfully serve their mission.

The Impact of Online Crowdfunding

For the most part, non-profits rely on small monetary contributions from a number of everyday citizens.  Gathering and sustaining funds over a number of years can be highly challenging, especially in a crowded field of similar groups, all needing cash for worthy causes. Recently, established groups began receiving competition from new online donation platforms. There are a growing number of these sites, with the top source generating over $3 billion in donations since its 2010 launch. Much of these campaigns raise funds for individual causes and initiatives through small contributions from a large number of individuals.

The rapid growth and revenue earned by these sites is worthy of examination, especially to smaller NGOs who can struggle to maintain a strong bottom line. It’s important to note that internet donations themselves are nothing new. Digital platforms have already been part of most organizations for years. So, what makes crowdfunding so distinctive and how can charities better understand their strategies?

The Personal Touch

The main differentiator between platforms and traditional NGOs is their setup. New online donation communities focus on small personal stories. Many of the most successful campaigns are either highly unique or closely tied to a prominent news headline. For example, while the blaze at Paris’s famed Notre Dame cathedral dominated international coverage recently, one site used the news to draw attention to lesser-known fires at three Louisiana churches. The effort? One million in less than four days. The incident is just one of countless successes by the digital giants, but it does illustrate their winning formula.

These platforms serve as more of a community rather than just a venue to solicit donations. Those who post share highly personalized accounts, photos and videos. Their approach often evokes the notion that users are supporting the “little guy” who would otherwise be forgotten. Most importantly, site visitors are given a clear idea of how their funds will be utilized and the exact amount that is needed. Seekers must post a goal – a specific dollar figure they determine. As such, donors feel as though they are directly aiding a particular cause and are part of a tangible solution.

High-Profile Scams

NGOs can increase their own transparency through refining their reporting system. The ability to showcase the responsible distribution of assets can go a long way to gaining public trust and is one major advantage that these more established non-profits have over unregulated online campaigns. News reports have uncovered crowdfunding scams in the past, such as the New Jersey couple who raised over $400,000 for a homeless man in 2018 – only for the public to learn that the three made up a heartwarming tale in order to swindle cash for themselves. Though these schemes are rare, they’re often highly publicized. Unlike anonymous online fundraisers, registered charities can use their status as a feature to reassure donors of their legitimacy.

$55,000 Raised for Potato Salad

Because virtually anyone can launch a digital campaign, some initiatives are made in jest, such as one infamous individual who nabbed $55,000 in a fundraiser to make a potato salad. The incident left many scratching their heads on how an unknown poster could snag so much cash. Upon closer inspection, the majority of donors gave just $3, which quickly ballooned thanks to the efforts of thousands. NGOs, who sometimes request donations in increments of $20 plus, should take note. Though higher revenue donations are necessary for tax rebates, the above incident shows how easily individuals are willing to part with a smaller sum.

What’s the next step for NGOs?

NGOs can easily apply a number of successful strategies lifted from digital communities to their own organizations in order to increase their awareness to potential donors. After all, it’s not just the technology or cause that’s spurring the flood of donations – it’s the stories. NGOs need to showcase their unique narratives and evoke a sense of community. Though their business plan, distribution strategy and research might be flawless, a personal touch can make all the difference.