Is Crowdfunding Just Asking for Money Online? Here's Why It's Different

Online crowdfunding often gets a bad rap that it is all about constantly begging online for money. But it cannot be farther from the truth because asking for & giving money is only one small part of the larger crowdfunding process.?

Online crowdfunding is not a single moment, one-way transaction but so much more. Nonprofits, charities, and others raising funds online need to look at crowdfunding as a gifting continuum…a continuous process. This process has 3 key phases – cultivation, solicitation, and stewardship which further include multiple steps.??

Let’s dig a little deeper into the 3 key phases of online fundraising.?

Cultivation

Imagine this…you walk upto a random stranger in a coffee shop and ask them for a donation for your nonprofit’s hunger relief program. What do you think are the chances that they will end up giving you the money??

Extremely small, right??

They will look at you with suspicion or simply ignore you. Maybe if you caught their attention through a flash mob, street play, etc. or asked for their permission & explained in detail about your project, they may consider donating. That too, if you have managed to inculcate trust and a genuine sense of connection to the cause. (And multiple such meetings for larger donations).?

The same applies for online crowdfunding campaigns.?

Simply starting an online campaign and asking strangers for money won’t bring you the results you desire. You must do your groundwork to get to know the (potential) donors and they need to know your nonprofit, and it’s work and impact before you can even proceed to the ask.?

This first phase is known as the cultivation phase where you focus on cultivating a genuine connection/ relationship with the prospects and making them aware of the cause & it’s importance. Some of the key steps in this phase of online crowdfunding include:?

• Prospect research to understand the target audience.?
• Compelling storytelling to attract prospects: The nonprofit should create visual, written, and other materials that tell prospects your/ your beneficiaries’ stories, the tangible impact of the donation, etc.?
• Multichannel marketing & social media campaigns to gain the attention of and reach out to your target audience.?
• Genuine relationship building with potential donors across multiple touchpoints including email, social media, virtual events, and more.?

This is a critical first step to successfully achieve your crowdfunding goal.?

Solicitation?

Solicitation is the second phase of online crowdfunding where you actually ask the prospective donor for money. In online crowdfunding, once you have made a connection with the prospects and raised awareness about the cause and the purpose of the campaign, you will ask them to donate.?

The steps in this stage will include:?

• The ask and the first donation?
• Value generation for donors/ supporters?
• Directing prospects to the crowdfunding page/ donation page
• Ensuring payment and information security

Stewardship?

Donations don’t and shouldn’t end with the solicitation and giving stage! The most important phase of online crowdfunding is stewardship – building a long-term relationship with the donors and retaining them over a long period of time.?

The steps in the stage include:?

• Communication after the gift has been received
• Donor engagement activities such as festive greetings, invitations to in-person & virtual events, handmade gifts by beneficiaries, feedback & inputs, volunteering opportunities, etc.?
• Regular newsletters/ communication about the nonprofit and its overall impact
• Updates about upcoming projects that they could help on, etc.?

This not only increases the donor retention rates and donor lifetime value but also improves the referral rates and goodwill for your nonprofit.?

Online Crowdfunding: More Than Just Money

In conclusion, online crowdfunding is all about building brand awareness and forging genuine, long-term connections with a nonprofit’s donor base…where money is only a small part of the process!?

Ready to try it? Set up your online crowdfunding campaign with TALGiving – it’s absolutely free to use, simple, straightforward and secure. Try now: https://talgiving.org/