Rachel Ramjattan, CFRE recently joined us for a webinar in which she explained why crowdfunding should matter to your nonprofit organization, and how to plan a successful campaign that raises more money from beginning to end.
In case you missed it, you can watch the full replay here:
Steven: All right Rachel, my watch just struck 1:00 if you want to go ahead and get started officially.
Rachel: That would be wonderful.
Steven: All right. Let’s do it. Well, good afternoon everyone, if you’re on the East coast, and good morning if you’re on the West coast or somewhere in-between. Thanks for joining us for today’s webinar “Non-Profit Crowdfunding – How to Win Friends and Influence Donors.”
My name is Steven Shattuck and I’ll be the moderator for today’s discussion. As always, I’m the VP of Marketing over here at Bloomerang. I’m just so happy that you’re joining us today. Thanks so much for taking an hour or so out of your day. We’re going to have a lot of fun.
But before we get into it, I just want to let everyone know a couple of things. We are recording this presentation and as soon as the presentation concludes, I’ll be sending out the recording as well as Rachel’s slides. So if you have to leave early or perhaps you want to review the content later on, you’ll be able to do that. Just look for an email from me later on this afternoon with all of those resources.
As you’re listening today, please feel free to use the chat box right there on your webinar screen. We’re going to save some time at the end for Q&A, so don’t be shy about sending questions, comments, anything you want to send our way. I’ll see those. Rachel will see those, and we’ll try to answer just as many questions as we can before the 2:00 Eastern hour.
Please follow along on Twitter. You can use the #Bloomerang as well as our user name at Bloomerang Tech. We’d love for the discussion to continue there as well. If you’re listening today via your computer and you’re having any trouble for any reason, usually it’s a little better by phone. So if you want to try dialing in by phone instead, there is a phone number on the email from ReadyTalk that I sent out around 11:30 this morning. So if you’re having any trouble, please use the phone. It’s usually a little bit better.
If this is your first webinar with us, welcome. We’re really glad to have you here. Bloomerang does do these webinars just about every week. Usually they’re on Thursdays.
In addition to that we offer some really great donor management software, so if you’re interested in that or in the market for that, check us out. You can download a video demo that will show you all of the neat features of Bloomerang. You don’t even have to talk to a salesperson to do that. So check it out if that’s interesting to you. That’s the end of that commercial. I want to go ahead.
I’m really excited to introduce our guest, who is Rachel Ramjattan, CFRE. Rachel, how’s it going? So good for you to be here.
Rachel: Thank you for having me. I’m thrilled to be with you.
Steven: Yeah, I’m thrilled too. This is fun. I’ve been looking forward to this one for a little while. Rachel I just want to tell people a little bit about you just in case they don’t know you yet. Rachel, she is the founder and principal over at Non-Profit Plus, LLC.
You can see there she has her CFRE accreditation, and before she became and consultant she worked with Catholic Charities down in Miami. She managed donor development, fundraising events, social-media, website administration. She did grants, and she even did some of the donor management for them.
So she’s definitely a very technical person, and I was looking at the slides earlier this week when she sent them over to me. I’m just really excited about this, because we’ve had a lot of requests for some crowdfunding type webinars. So Rachel, I’m going to pipe down. I’m not going to take up anymore time. Why don’t you go ahead and get us started, my friend?
Rachel: Well thank you, so much. And thanks for that warm welcome. I’m just so excited to be with everybody here, and I did put my Twitter handle here, so if you’re able to live tweet that would be wonderful. It helps us to get the word out about the great work that Bloomerang is doing, too. This is a great way to share.
I thought I would start to find out a little about you guys and see which of the following describes your experience with crowdsourcing. You can just type your answers in the chat box. It’s a very informal survey. Have you ever done it? Have you ever tried it but didn’t have much success or have you implemented at least one campaign that raised more than $5000?
Wow. We have tons of people who’ve never tried it. A few that have tried it with not as much success as they’d like, and a few that have done really well. That’s awesome. Great. That helps me to know where you guys are at.
This is what we’re going to cover today in this webinar. First we’re going to talk about what is crowdfunding, because it’s one of those terms that if you talk to ten people, you’re probably going to get ten different definitions. I’m going to give you our version of it. Then we’re going to talk a little bit about crowdfunding tools. Then how to win friends and most importantly, how to turn those new friends into long-term donors.
Crowdfunding is not a new concept, in fact it’s been around since 1884, not in it’s current form. But Joseph Pulitzer got 160,000 New Yorkers to donate more than $100,000 to build the pedestal of the Statue of Liberty. The idea is you get a lot of people to give a little bit of money for a particular project. You might also hear of crowdfunding referred to as crowd sourcing or social fundraising, peer-to-peer fundraising. No matter what term they use it all means the same thing, raising money from a large number of people. These days, it’s usually by the internet.
In case you wondered how successful crowdfunding is, in 2013 more than $5.1 billion was raised, and the average campaign raised more than $9000. Online giving is just growing by leaps and bounds, as you all know. Peer-to-peer giving is one small portion of online giving, is 23% of all online giving.
If we think about that, that means that one in every four dollars that is received by a non-profit is actually coming through peer-to-peer or crowdfunding campaigns. So if you don’t know about it, it’s great that you’re here, because it’s something that’s only going to keep growing.
We might wonder how well does crowdfunding compare to traditional online fundraising, and if we look at it, our average crowdfunding donation is $88.22. You can see that it’s pretty impressive the amount of money that’s raised. But the best part about it is that these are your friends raising money for you. This is not money that you had to go directly solicit every single contribution.
Here’s why it works. There are lots of people who would love to be philanthropists, but maybe don’t have as much money as they’d like to have. So crowdfunding gives them the opportunity to become donors and get involved in something meaningful. People love that. You don’t have to give a whole lot to have skin in the game.
Another thing that’s attractive is that people like supporting specific projects. In crowdfunding projects, they know exactly where their money is going. It works well because they enjoy feedback, and one way you can do this is by reporting on how much money is being raised each week.
I’ll not go through this whole list because you guys can look at this at your leisure, but I just want you to know that it is popular for many good reasons. Here we have the recipe for success. Basically, all you need for crowdfunding to work is three things. A project that needs funding, people who are interested in that project, and a platform to connect the two.
I see a question here from John Guy, he’s asking, “Does crowdfunding replace direct mail?” No, it does not. It’s just another tool in your fundraising arsenal.
Let’s talk about what doesn’t work before we get into what does work.
Capital campaigns. These are campaigns raising money for buildings, or appeals for general funds, or long-term fund projects. These typically don’t work for crowdfunding campaigns because there’s not a lot of excitement about them. Remember that these crowdfunding donors usually give smaller amounts of money, so a project that’s really expensive they might feel like it won’t make a difference.
If you have too big of a goal, and you don’t get to that goal, donors may be reluctant to contribute, because they feel like maybe the goal is not attainable. That’s why the sweet spot for crowdfunding projects is usually right around $10,000. Of course there are exceptions to this rule.
That was the first ingredient. The second thing is interested supporters. Who are these people? Most of the money is raised on the internet, so this might not be a surprise to you that most of the people interested in crowdfunding projects are young people between the ages of 24 and 35. They’re very social media savvy. They’re comfortable with online giving, and they’re enthusiastic.
You also find supporters among your current donors, your board, your staff. I had great success recruiting students who needed service hours, which we’ll talk about later. The beneficiaries themselves can be very good supporters in crowdfunding.
What we did at Catholic Charities was, we had for a drug treatment program, some of the clients who were so proud of being able to begin their recoveries that they were willing to share their stories. We helped them set up their own crowdfunding page. Then of course, we would find donors to help give to it. But it made them feel good, and it also was a great way to get our story out. Pretty much anybody who knows someone who’s impacted by your cause would be a good supporter or a good prospect.
The third thing we need in our secret recipe is a platform that connects our project to the supporters. This is where it gets sticky, because in 2012 there were more than 536 online platforms. There are new ones coming online everyday. Each site will offer different features, costs and benefits. That’s one of the things that we have to do as fundraisers is to figure out which one is going to be a good fit for what we’re trying to accomplish. The answer may be different depending on your project.
Here are some of the big ones you’re probably familiar with. Kickstarter, GoFundMe, Indiegogo, but this is just a handful of them. There is one here called Classy, if you’re a small non-profit and you don’t have a budget to purchase any software, that’s a good one to try because they don’t have any up front setup costs. There are lots of different ones out there and you just want to make sure that you understand what each offers and what you need.
With so many to choose from, what do we look for? First thing we look at is access to donor data. We want to make sure that the crowdfunding donor is somebody that we can build a long-term relationship with. We don’t want just a one-time donation. We want them to become passionate about our cause. We want them to continue investing. That’s the first thing I look at because some platforms don’t allow you access to the donors’ data.
The second thing we look at is fees. How much are they going to charge you? Sometimes these are up-front fees in terms of setup costs. Sometimes there are no setup costs but they charge a larger portion of each transaction. If you are a small nonprofit with limited funds, you might be willing to pay more per transaction in lieu of having to pay a setup fee.
On the contrary, if you’re a really large non-profit expecting to raise huge money from this platform, it may suit you to pay setup fees so that you can get lower transaction costs. Until you compare those when you begin looking at products to see which one gives you the best mix.
You also want to look at the payment types that they accept. Some accept credit cards. Some accept what we call ACH debits which is when people want to pay electronically as if it’s a check. Some will want to do other payment types as well. We’ll accept transactions from out of the US if you have foreign donors who want to give.
You also need to look at a remittance rule. By this we mean how is the money paid to you? Some crowdfunding platforms pay only if you hit your goal. Others pay 30 days after the transaction closes. Some pay once a month. Everyone has a different rule, so basically, that’s one of the things you want to look at. How is the money paid to you and when?
Number five is very important, too, the ease of use. You want to be able to brand your pages so that your constituents know that they’re supporting you. When you set up your fundraising pages, you want to choose a platform that allows you to do things like upload your logo and upload your own branding and images. Automate receipts to donors so that they get receipts right away, and that’s good for cultivation of donors and retention.
You want to see if they allow the creation of personal pages. Could we use video? Do they allow us to do progress updates? You want to take a look at how they allow you to brand and use video, because video is really popular, especially with crowdfunding campaigns. Choose the one that’s the best fit for your needs.
Another consideration is social media integration. Because crowdfunding is a largely social activity, you want to make sure that they are able to integrate their product with the platforms that you are active on. If you really have a huge following on Facebook, then you want to make sure that they’re integrated with Facebook. If you have a bigger following on Twitter, then you want to be integrated with Twitter. If Instagram, Instagram. Basically you want to go with the platform that has enough integration with the channels where you are active. If they’re not active on a channel that you don’t use, it’s not a problem. Make sure they are where you are.
Finally, you want to choose the right technology. You want to understand the tax receipt and considerations. What I mean by this is, there are some platforms, like Razoo that are foundations themselves. So when a donor gives to you via the Razoo fundraising platform, Razoo issues the tax receipt to that donor. This might not seem like a big deal until you hit the end of the year, or the first of the year, and your donors are hounding you for tax receipts when you didn’t issue one, because they didn’t really give to you. They gave to Razoo.
Now when you understand that that’s the way it works, you can educate your donors ahead of time. You still send a thank you letter for their donation, but you want to say to them, “By the way, your tax receipt will be issued by Razoo Foundation.” So it’s just a matter of making sure you can communicate well so the donors know what to expect.
Here’s the bottom line, and I know that this sounds like a cop out, but when it comes to the technology, the technology really doesn’t matter. What matters is that you market your campaign to your network of supporters and choose any platform that supports your needs, goals and resources. When it says that there’s 536 platforms out there, don’t let it overwhelm you. You’ll be just as successful on one as you will on the other as long as you have your marketing campaign set up correctly.
Here’s a trivia question for you guys, making sure you’re still awake. It’s a tough draw when you’re the first one after lunch, isn’t it? What percentage of crowdfunding campaigns fail to raise at least 20% of their goals? We’re seeing a few answers come in here. C seems to be a popular answer. Yes. Well my C’s have it. Believe it or not, 81% of crowdfunding campaigns fail to reach their 20% goals.
A lot of this can have to do with a lack of social media presence or maybe marketing on social media, but it can also have to do with not having the right project because you can have the best social media and marketing plans if you don’t have the right project, you won’t succeed.
Let’s talk about how we come up with a winning formula now. To do a really great job and achieve success, we’ve got to do our homework. I always say whether we’re writing our year end appeal, or we’re writing a grant request, or application or proposal, or creating a crowdfunding campaign you always begin with the thank you. Why? Because it’s too easy to forget that if you don’t start there.
When I start a project, no matter what it is, whether it’s direct mail or planning an event, or doing a walk-a-thon, whatever it is, start with the end in mind. Come up with a plan for how you’ll thank donors, and make sure you write a heart-felt thank you letter, and check that off your list. This is all about retention.
Next thing we need to do is create top-notch templates. This is something that’s important and can help empower your users, because when you have templates for email communications that they can send out to their friends about why they’re supporting you, it just makes it really easy for them to do. The easier you make it, the more they’re going to share. You want to use powerful stories, images and videos. Emotions trigger donations, so make sure we’re looking at that.
Another thing you want to do is write how-to documents. When I had the walk-a-thon for St. Luke’s or recovery walk as we called it, I had how to set up your fundraising page and it was literally a step-by-step guide that said, “Click on this, click on that, do that,” and it really helped. It’s another way to empower your users to get going.
There are some of us that are curious like I am, who will play with things until they work, and then there are other people who are not as interested in tech or don’t have as much experience and they’ll get frustrated. When you have how-to documents that really just takes the frustration out of everything.
This is my favorite secret weapon right here. Find clients who are willing to create personal pages. They don’t have to raise any money for you, but if you help them create a personal page with their story, you can direct donors to that page and it helps to tell people what you do. There is no testimonial as powerful as a satisfied client. That’s something that you want to make sure we do.
Next one is make your life easy. Automate your receipts and thank you’s, and use notification so you know when donations come in because all of those things are going to save time. And finally, there are always going to be people who want to donate offline and do cash and check. Make sure you have a way to include them in the campaign. There should be a way that you can enter them on the platform so that your totals update even though it wasn’t received online.
The next thing we need to do is we need to have a plan to retrieve our data. When I think of crowdfunding, yes it’s nice to raise the money, but I’m much more interested in attracting new donors through crowdfunding. Because if I can build long-term relationships with those donors, the value is going to be much great for our non-profits. And so this is where we talk about choosing the right platform.
You want to make sure you can not only access your donor data, but how will you add that data to your existing records? What that means is, we’re going to need to be able to take a look at our database and figure out how are we going to add those people in? How are we going to check to see if they’re already in our databases? We don’t want to create duplicate records.
Another great thing you need to plan for is creating segments for your participants in your campaign. Segment just means a group of people. The reason this is important is you may have participants that are participating just for service hours, for example students. Then you might have other participants who are participating because they were touched by an issue. In my case I had a family, he was a seminarian actually, who lost his brother to alcoholism, and also his grandfather, so he was participating for very personal reasons.
You don’t want to communicate with them in exactly the same way because they have different interests. The student is interested in earning service hours, so you would want to talk with them about how to load up on service hours, and I’ll tell you a secret about doing that in a little while. But to the person who’s participating because they were personally touched by the issues, then you want to talk about honoring that persons’ memory. That’s why we use segments, so that we can personalize our communications.
And most of all, test your data download process. We want to make sure that we can actually get the data. Don’t trust what people tell you. Trust but verify.
The next thing we have to do is we need to know some things about crowdfunding donors. Here’s a fun one. Nobody wants to go first. They’re like that little dog up on the ocean in the boat waiting to jump in for a swim. Nobody wants to be the first one. They’re fair-weather fans, so when things are going well they’ll be with you, but when things are not, they’ll jump ship.
They tend to be bandwagon jumpers, which can be a good thing. What do I mean by that? If you have people lined up early in the campaign to contribute, have them contribute as soon as you launch the campaign or do a soft launch of the campaign, because when other people start seeing it, they’ll say, “Wow. This looks like a successful project. I want to jump on the bandwagon and add to it.” Assume that they know very little about you, because they probably don’t. They don’t know a lot about you because they’re just giving because a friend asked.
Finally, make sure you treat them like investors. What do I mean by that? An investor is somebody that you report to every now and then, so you have to be accountable to them. You have to let them know what you did. Crowdfunding donors tend to be treated as investors because they’ve given their money to a very specific thing and they want to know what the outcome is.
Here are some more things you need to know about crowdfunding donors. One of my favorite movies is “They’re Just Not That Into You” or “He’s Just Not That Into You.” The same thing is true for crowdfunding donors. They give because a friend asked, not because they know a lot about your cause or have a particular interest in it. But they do want to know the impact of their gift.
Here’s the good news, if you treat them right they will give again if you remind them how they’re connected to your cause. Remember those segments we were talking about and the data? One thing I used to do is every donation I recorded a soft credit, which means you’re giving a constituent credit for a donation even though they didn’t contribute it directly.
But I would give soft credits to the person who raised it, and I would always have a source with a field that I created in my database, a user-defined field that said the source of the campaign. Because if I had that information, I could easily go in and say, “Hey, Steven. I don’t know if you remember me, but you supported my son Adam in his recovery walk campaign last year. Guess what? He’s walking again. Would you give another gift?” That’s a good way when you can remind them how they’re connected to your cause to get them to give again.
They do have a high attrition rate, so they are hard work, but it doesn’t mean that they aren’t worth running after.
So how do we win friends? The most important thing we can do is to empower our champions. What do I mean by that? Crowdfunding is all about passionate supporters raising money for you. The best thing you can do is to empower them by making it easy for them to fund raise, teaching them everything they need to know to be successful. Get them started. I used to have evenings where I would be at the seminary where I would invite seminarians to come in and I’d help them set up their pages. You could also do that with videos if you’re creative.
Teach them how to recruit other people. This is a very popular one here, make sure you have a leaderboard, because peer pressure is a wonderful thing. Everybody wants to see their name on top of the leaderboard. Make sure you provide frequent updates of who’s at the top of the leaderboard, both in social media and emails that you’re going to send out to them, as well as fundraising tips.
Finally, see if you can reward them with prizes. We did a couple of experiments with this. One year we had one prize of first place, one prize of second place and one prize for third place. The following year we changed things up. We got $500 in gift cards which allowed us to buy twenty $20 gift cards, and we gave people one raffle ticket for every $100 they raised. Guess which year raised more money? It was the second option where we had more gift cards to give away. People like to win things even if it’s not a huge dollar value. If you can get those donated, all the better.
So once you’ve empowered your champions, how do we keep going? Well, we build momentum. One of the best ways to do this is to identify donors that you know will give to the campaign and ask them to give early. Again, then invite others to jump on the bandwagon. Another thing you can do is have thank you and motivation calls.
What do I mean by that? Donors will give and sometimes there are existing donors in your database, so pick up the phone and call them and say, “Hey. I noticed you gave some for a donation so thank you so much. We can’t wait to see how much we raise. Thank you for investing.” Then invite them to come join you for the event, or to tell their friends about it.
Another thing you need to do is thank donors early and often. Keep them updated on how their fundraising is doing. That means that you can see if you have two people that are close on the leaderboard, make sure their supporters know it because they might give again just to help their person get to the top of the leaderboard.
How to win friends for the long term? Make them feel like heroes. Thank them fast. Thank them often. Thank them publicly.
Here’s a quick poll for you. Tom Ahern, who is one of my favorite non-profit gurus because he’s a wonderful writer and he’s funny and he really know what he’s talking about. I’ve read many of his books and used his advice to raise a lot of money, so if you haven’t heard about him go Google him and look him up. You’ll be glad you did.
He has some research here that shows people who get a thank you letter in the mail within 48 hours of making their gift are how much more likely to make a second gift? Seeing a lot of C’s eight times, a couple of B’s, a couple of A’s. Okay. Well guess what? Donors who get the thank you within 48 hours of their gift are four times more likely to give. So when we talk about retaining donors, even the fickle crowdfunding donors, the simplest strategies to show gratitude, these days gratitude tends to be a rare thing so when you do it, it really helps to get peoples’ attention.
Now that we have our donors, we’ve shown them gratitude, now we want to talk about how we can get them into a long-term relationship with us. For those of you who are Bloomerang customers, you’ve got a wonderful tool at your fingertips which we’ll talk about in a second. But one of my favorite singers is Bruno Mars, so I couldn’t resist using this, but you’ve got to tell them that they’re amazing. Everybody loves to feel amazing.
There are several ways you can do that. If you have a new donor, send them a welcome series. Add them to a campaign. I have a secret weapon that I use personally with my non-profits and