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Opinion: Why crowd funding is not working … yet

I recently attended an FIA Breakfast event in Melbourne that covered many topics relating to NFP, fundraising, philanthropy, with a range of experts in their respective fields. One of the discussions focused on digital fundraising and the seemingly reluctance of charities (or lack of knowledge and skill) to move online and engage their donors via a new channel, rather than their traditional methods.

It got me thinking. There are more crowd funding websites, online platforms than ever to help raise funds. More possibilities for NFP organisations to reach a broader and new audience, become more efficient, go online to raise funds – but have they?

Recent findings from the 2016 Ericsson Mobility report shows that by 2018, 33 per cent of the global population is expected to be using social media – that’s 2.4 billion users. Untapped Market? Clearly this is the way forward, and not a figure that can be ignored.

So why haven’t organisations been successful at using crowd funding as a means to bite a chunk out of their yearly budget.

To understand, let’s examine a fundraising dinner (resource intensive and well, let’s be honest, not really cost effective! Auctions? Not another one) – and see what key “ingredients” are needed to ensure it is successful. What can we not overlook when we plan for such a night.

Imagine if your favourite charity sent you an invite in the mail, handwritten on a small piece of paper: Annual Dinner – 22nd November at Crown Casino – 7:30pm sharp.

What? Seriously? As a donor for the last 10 years, is this all the respect I am afforded? Truth be told, the bare ‘essentials’ to make the event happen are in place. There are four walls, a roof, three-course dinner, chairs and table laden with pledge cards. Now people just need to fill in the pledge cards, and the charity has hit their targets. Should be simple enough.

No doubt, such an approach would fall short, and rightly so. Unfortunately, organisations that have taken to crowd funding have mirrored this approach. Taking minimum steps to launch the campaign, but the essential ingredients are missing.

For an event to succeed, there needs to be planning, marketing, strategising over the message. Understand why people give to your organisation. Having ambassadors to spread the word. Your major donors need to be on board. Donors want to see impact from their donations; they want to be part of something greater, part of your community to make the world a better place.

When a NFP take a fundraiser online, and try raise funds from the ‘crowd” more often than not, the thinking is “the internet will do it all for me, I just need to put the project online”, link my bank account and watch the donations flow. Look how big social media is (2.4 billion users by 2018) surely I can get enough people to click donate so I hit the desired goal.

Like a dinner or any event that requires certain “ingredients” for the success – an online fundraiser needs the same. Don’t neglect what has and will work just because we are now online.

Shuie Gestetner Director and Fundraising Specialist at Charidy.com 

2 comments | click to view comments

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    Comments

    Srolic Barber

    September 15, 2016 at 2:54 pm

    Your point about engaging donors is right on the money. Charities and organisations need to empower their benefactors and supporters. Understand why they give, involve them in the process of allocating and investing their donations. When they do so, the supporters become happy to do the leg-work for them. It’s a win-win really.

    Shuie Gestetner

    September 15, 2016 at 7:40 pm

    Thanks for your feedback – Jewish Care Victoria. Great video, thanks for sharing!

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