One of the newest approaches to funding nonprofits and entrepreneurial ventures is raising capital by appealing to a large group of potential donors rather than a few wealthy individuals or organizations. So suppose that you’d like to explore the possibility of crowdfunding; what’s the first step?
The first thing you’ll need to do is to look into different crowdfunding platforms and create an account once you make your decision. Depending what kind of venture you’re looking for funding for, you may want to choose a particular platform over another, since some are better suited for different projects and nonprofits and each has their own set of pros and cons.
Some crowdfunding platforms are open only to individuals an organizations with projects in the arts: performers, artists, musicians, writers, curators, filmmakers and the like. Some platforms permit fundraising for charities, business expenses, travel expenses, medical expenses and other needs, but others do not.
How Does Online Crowdfunding Work?
You may have your own large network of potential donors, but of course, not everyone will choose to donate towards your project. Typically, somewhere between 70% and 80% of donations come from friends and family, with the remainder coming from friends of friends or from complete strangers.
Click here to find out more about crowd funding landing <= The most compelling argument in favor of crowdfunding is also the most simple: the more people who are aware of your project, the better your chances of receiving donations. That's exactly why you should use social networking platforms to spread the word about your projects and their progress. One especially effective tactic which is also good practice is to thank donors publicly on social networking sites. This helps encourage others to donate as well as reminding everyone in your social network that your project is ongoing and still seeking donors. By taking the time to update the status of your project and spreading the word to your network, you'll bring in more donations. For example, look at the following case study. Here, we'll look at how a startup mustard company managed to raise more than $4,000 using crowdfunding. This small business began seeking funding in order to allow the company to upgrade their production facilities and begin producing enough of their mustard to fill orders from local shops. One selling point which worked to the company's advantage was their dedication to using high quality ingredients, locally sourced when possible. The company needed $4,000 to make the necessary capital investments and ended up receiving nearly $4,300. How Did They Do It? The company gave their donors ongoing updates about the progress of the business' launch along with promotional items like refrigerator magnets. This made donors feel like they were being kept in the loop and knew exactly how their donations were being used. Donors who gave $80 or more were invited to the company's launch party where they were served beer, pretzels and naturally, mustard. These donors also received a jar of every variety of mustard produced by the company. Click here to find out more about crowd funding landing <=