26 Questions Every Nonprofit Should Ask Their Crowdfunding Provider
Crowdfunding is a bold, new and sometimes surprising, if not dangerous, world when it comes to donor relations, fees, receiving funds and other aspects of the process.
Few fundraisers who have embraced it knew exactly what they were getting into when utilizing a crowdfunding provider.
The 26 questions listed below just might go a long way towards keeping you safe from pitfalls and surprises:
Does the donor contact information stay with the Crowdfunding business or is the information returned to the nonprofit?
Who has the opportunity to thank the donor?
Is the donor contacted in regards to future campaigns?
Is the donor contact information sold and shared to other NPO’s?
What do all of the surcharges and fees amount to?
Do the fees change with volume or by some other measure?
Are there any kickbacks to any other entities?
How often are donors contacted in conjunction with this single campaign?
If prospects are contacted, as part of this campaign, by someone opening up their email list to solicit others, and they do not donate, are they contacted for other campaigns?
What happens to the funds raised if the campaign goal is not reached?
What happens if the campaign reaches 80 or 90 or even 95% of goal?
How many days before the funds are distributed?
Are campaign funds co-mingled in any manner?
Is your company and all payment processors involved PCI compliant?
Are you doing crowdfunding campaigns for people and organizations that are not nonprofits?
When did you begin doing crowdfunding campaigns?
Crowdfunding campaigns are what percentage of your business?
What percentage of you campaigns are 100% funded?
How many nonprofit customers do you have?
What % of your business is with nonprofit organizations?
What size is your company in revenue and full-time employees?
How many dollars were processed in the last two years by year?
What percentage of growth have you had in the last 12 months?
Is your company profitable and able to stay in business?
Are you venture capital funded and if so by whom at what dollar amount?
Why should we use your service versus more established providers?
If you are successful in obtaining answers to all 26 questions you are now prepared to decide whether to embark upon your first crowdfunding campaign or not.
This important decision should be made only after being properly informed, as unfortunate horror stories of donors being mistreated, funds being lost and other negative consequences are often mixed in with stories of outstanding success.
If you have had either a positive or negative experience with crowdfunding please share in the comment area. We would all love to hear more!
A 30+ veteran of the nonprofit software industry, Jay Love co-founded Bloomerang in 2012. Prior to Bloomerang, he was the CEO and Co-Founder of eTapestry for 11 years, which at the time was the leading SaaS technology company serving the charity sector. Jay and his team grew the company to more than 10,000 nonprofit clients, charting a decade of record growth. Prior to starting eTapestry, Jay served 14 years as President and CEO of Master Software Corporation. MSC provided a widely used family of database products for the non-profit sector called Fund-Master. He currently serves on the board of the Center on Philanthropy at Indiana University and is the past AFP Ethics Committee Chairman. Jay is also the author of Stay Together: How to Encourage a Lifetime of Donor Loyalty.