People’s relationship to giving money is changing.
There’s a key ingredient of fundraising that takes into account the ever-turning relationship between people and their philanthropic selves, and that’s peer networks. Increasingly, people are turning to peer-to-peer, crowdfunding and social media as a way of funding initiatives, charitable causes and much more. And charities run the risk of being sidelined if they turn a blind eye to this.
Take Billy Monger for example, a teenage race driver who suffered a terrible crash in a Formula 4 race. A crowdfunding campaign was set up to provide Billy with private health care after the event. Over £500,000 was raised in one day for his recovery and care. Since the fire struck Grenfell Tower in London, over £3 million has been raised to support the victims through crowdfunding.
Crowdfunding is fastly becoming one of the most popular ways for people to bypass traditional charities and raise money privately.
A recent NESTA report on crowdfunding showed that while more than one million people took part in crowdfunding in 2015 alone, only 0.5% of that is estimated to be crowdfunding for good causes.
So there’s a huge gap in the crowdfunding market for charity fundraising. And while some charities are starting to implement crowdfunding into their campaigns, such as this one to support interns in the NGO sector, many charities are at a loss in understanding how to integrate crowdfunding into their fundraising work.
Building public trust
Crowdfunding not only offers a unique source of income that can supplement other ring-fenced funds, but it also allows the charity to be held accountable to its donors, in a very visible, very honest way.
The importance of charities gaining the trust of the public is something that Julia Unwin, chair of Civil Society Futures, has highlighted. In April this year, Julia wrote in The Times about the necessity for charities to be held accountable by civil society. She states:
“For civil society to rebuild public trust, we must embrace the greater levels of accountability expected by the modern world…That means thinking carefully about how our members and those who benefit from the services we provide can take more ownership of our organisations…It means considering how to use methods such as crowdfunding to make us more reliant on the many, and less reliant on the grant-makers and the state.”
Crowdfunding has certainly become a powerful fundraising tool for many charities. Jonathan May, CEO of Hubbub describes the power of charity-focused crowdfunding campaigns:
“We live in an era where traditional fundraising – through direct mail, phone campaigns, and street collections – is coming under intense scrutiny due to its relatively intrusive nature. It’s not just this pressure that is forcing us to reinvent our discourse with donors – the reality is that these direct marketing approaches are getting ever more expensive and seeing diminishing return on investment, particularly when looking at them as a source of new donor acquisition.
“Causes need to work through the medium of networks and storytelling to acquire donors, decentralizing and diminishing the role of direct marketing and working through people, networks and movements to reach new audiences. Digital – including crowdfunding and social media advocacy – are incredibly powerful ways to leverage peer networks for the greater good.”
Crowdfunding can give autonomy to charities in addition to building on their brand and legitimacy. Having literal buy-in from the general public shows that you have genuine support for your work and in a way that can supplement other ring-fenced sources of money. Seeking funds from the public that you serve will begin to unlock the incredible power of your networks.
You can find out more about how crowdfunding can work for you with our Crowdfunding Academy courses contact email@example.com for more information.