Capitalizing on Crowdfunding

Is your charity thinking about capitalizing on crowdfunding and social impact? There are key aspects to keep in mind before you count on crowdfunding to achieve next year’s fundraising goal.

Several factors have given rise to the adoption and popularity of online participatory crowdfunding platforms. Democratization of the internet, the adoption and ease of online financial transactions and unique community-based cooperative opportunities help bring together the pooling of skills, ideas, and investments for the benefit of community projects.  This novel economic model is accessible to just about anyone, at any time.

Crowdfunding mediums were originally created to support artistic activities. But their popularity has meant other actors and activities are looking at collaborative and alternative funding to promote their causes and reach their goals. Investing, lending and donating, which were all traditionally done offline, have turned into a social trend where everyone can play a part in something which sides with their values.

The Success of Crowdfunding Sites

There are more than 800 crowdfunding platforms around the world. This popularity is attributed to the fact that crowdfunding has found a spot in the financial industry as both a complement and an alternative to traditional fundraising and community investment models.

One of the most popular crowdfunding sites is Kickstarter, an early entry and a brand which has become synonymous with crowdfunding. Since its creation in 2009, the platform has funded more than 156,000 projects, with contributions valued at $4.1 billion[1].

Indiegogo is a successful crowdfunding site which supports artists, businesses and non-profits. While similar to Kickstarter, it caters more to non-profit organizations and causes. 15 million donors have raised more than $1.6 billion (as at January 2019).[2]

GoFundMe is the most widely used platform for organizations and individuals crowdfunding social causes. From its inception in 2010 through to 2017, the platform raised more than $5 billion from 50 million donors who supported more than two million individual campaigns. [3]

Is Your Cause Motivating?

Competition online is fierce for crowdfunding support. To achieve success, charities must motivate donors through an emotional appeal which establishes a strong connection by understanding the donor’s passion and connection to the community. This is tricky to do on a social platform.

Non-profit charities can make use of social media platforms to promote their messages, win over support and raise funds through donations.  But social media platforms lack the relationship building and personal communication strategies which build greater connections.  Donors may make a first donation online but non-profits must build on that first connection to develop an ongoing relationship with the donor. This type of engagement should be part of an organization’s overall relationship strategy.

Millennials Support Crowdfunding

For a crowdfunding campaign to be successful, it is important to understand the demographics and behavioural traits of typical donors. Millennials are prime targets for crowdfunding, for many reasons. Millennials have long been considered to be intrinsically impulsive with decisions about creating connections or making financial decisions.[4] If a millennial sees something he or she likes, their strong sense of individuality motivates them to make the purchase. It might sound like an oxymoron, but millennials are connected and social, while still being completely individualistic.

This behaviour also underpins the way millennials approach giving. Millennials tend to me comfortable online and are therefore more inclined to give online.  Online giving in the US in 2018 has seen an increase of 7.2%, whereas total giving has only seen a 1% rise in that same time period. Polls have shown that 52% of millennials have been interested in donating on a monthly basis.[5]

While there are advantages associated with crowdfunding, it should be seen as one tool in a fundraisers toolbox which is integrated with the overall fundraising plan. For a cause to become successful through online giving, it is important to focus on the basics like building a relationship and a personalized approach to fundraising. Social media platforms may introduce new donors to an organization, but the organization needs a relationship strategy to turn the one-time donor into a long-term relationship.  Properly planned, new and traditional methods can work hand in hand to achieve an organization’s fundraising goal.


[1] 8 Crowdfunding Sites to Raise Money For Your Big Idea, Braveen Kumar, Jan 18, 2019, Shopify Blogs,

[2] ibid.

[3] ibid.

[4] How Do Millennials Make Purchase Decisions?, Business 2 Community, Joel Goldstein, November 16, 2015,

[5] The Ultimate List of Charitable Giving Statistics for 2018, Nonprofit Source,