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
Make sure you send them progress updates, not just of the fundraising progress but of the impact. For example, this is one of the exceptions that I talked about, I use crowdfunding and other methods to raise some money to build a preschool in Jamaica, and we just started construction last week. So I sent pictures to every donor to that campaign to show them that the bulldozers had leveled the building and were off to the races. You can believe that I’m going to be sending them updates every week just so that they can see. It doesn’t take long. It’s just the picture.
Make sure you tell them lots of stories, because stories are what show the impact of their gift, and it’s not stories about you, but rather stories about what they have done with their generosity.
Finally, get to know them. Our donors are not used to us trying to get to know them. Usually non-profits only call them when they want something, so when you invite them for a tour or invite them for coffee, or just make a phone call to say hello and thank you that gets their attention.
A second strategy is, make them feel like insiders. What do I mean by that? You want to make donors feel like they’re part of your team, and that they have information before other people do. You want to remind them of their connection to your organization. Another way to make them feel connected to you or like insiders is to communicate on their channel.
If a donor likes to communicate by phone, pick up the phone. If they tend to email you more, email them. If they tend to tweet you on Twitter, then tweet them back on Twitter. Whatever you do, listen for the queues that they’re giving you and follow their lead. Invite them in for a tour and just make them feel really loved.
This one here, don’t bait and switch. What I mean by that is donors tend to give their second gift in the same channel that they gave the first. That means that if they’re coming to you supporting St. Luke’s Center, for example, which is just one of our programs that we had at Catholic Charities, then you’re not going to have a lot of success if you suddenly start talking to them about the shelter for women’s’ families. If they came to you through St. Luke’s then keep appealing to them through St. Luke’s, because that’s where you’ll get the best return.
If you’re not a multi-program agency, what I mean by don’t bait and switch is if they came to you through a special event, reach out to them again through a special event, because you’ll have more success reaching out to them that way than you will if you try and change the topic.
These are a couple of campaigns that I have done. One of them is for Sole Brothers Helping Others, and this was a recovery walk campaign for Catholic Charities. I have to tell you that raising money for drug treatment or to benefit people who are dealing with addiction issues is probably one of the hardest missions to raise money for, because a lot of people have very strong feelings one way or another. So Sole Brothers was born because I came up with the recovery walk idea to raise money for St. Luke’s Shelter.
And my son who is severely disabled heard me organizing the walk and said, “Mom, I want to walk,” and I, without thinking said, “How are you going to walk? You’re in a wheelchair?” I have to say it was one of my worst moments as a parent, and thank God he’s a forgiving kid because he quickly answered and said, “I’ll ask my cousin to be my legs.”
So they came up with this idea of being soul brothers. They’re very punny, as you can tell, and I’ll let you click on the links to these campaigns when you get the slides so that I have enough time for questions here, but they raised almost $25,000 over three years. They were covered on the news, and I just wanted to show you a campaign that was possible just because we dared to try new things.
In the second one you can look at, this is St. Patrick’s Preschool Dream. This is another project that I have done for that preschool in Jamaica. I’d love you to look at it because this is one of those exceptions to the rules. We used it to raise our money through a capital campaign, but we also had a back-end appeal where we encouraged people to donate by check because we were looking for such large sums of money, and we didn’t want to pay all of the platform fees.
So if you go and look at that you’ll see that the online fundraising portion of the money was pretty small, but it’s because we had that information out there that people gave offline. So that’s one of the exceptions that I wanted to show you.
When you’re looking at resources there’s some great resources coming up. One of them is the basics on more fundraising, which I’ll talk to you about in a second. They also have great videos. Deposit A Gift is one of the platforms that we looked at or mentioned. They have a terrific crowdfunding resource video series.
Volunteer Match is another good one. If you’re not familiar with this site, believe me, you want to get familiar with it. It’s a site where you can post volunteer opportunities in your area or for your organization, and people go there when they’re searching for volunteer opportunities. I got hundreds of kids who are looking for service hour opportunities to participate in our walks simply because they found us on Volunteer Match. And it’s free. It doesn’t cost you a dime. Then finally, if you go to Slideshare, they have some great crowdfunding presentations there, too. Just search for crowdfunding and you’ll find some.
Then I want to mention another resource. Pamela Grow is a great friend of mine, and she’s also one of America’s Top 50 fund-raisers. A few months ago we hosted a course on non-profit crowdfunding. It’s a four-week course. It’s an e-course which means every week you get one module delivered to you. So this is an outline of what we have here in that course. The best part about it is that you have a Facebook group to ask questions. You’ve got templates. We give you step-by-step guides, so literally the blueprint for what you need is in this course.
So for those of you who are wanting to use crowdfunding and need a little more support, you’re welcome to use this. We have a link here, especially for Bloomerang customers. If you type the link in it will take you straight to the registration page. Know we only offer it once a year usually, but because of Bloomerang’s partnership with us, we’re both Bloomerang partners, we opened it up for you guys today.
The final thing I wanted to say about crowdfunding is if your not a Bloomerang customer yet, and you’re thinking about a platform, I encourage you to give Bloomerang a look. Because when you’re thinking of crowdfunding, they have a really neat feature that allows you to integrate your social media. I’m going to ask Steven to talk about that real quick.
Steven: Yeah. Thanks, Rachel. Thanks for teeing that up. We do. We have a pretty cool social media hub feature that we released, I think back in September, maybe November. Basically what you do is if you’re a Bloomerang user you can connect a Twitter account and most people just connect their non-profit organization’s Twitter account.
What it will do is if anyone interacts with your non-profit on Twitter through your user name or any hashtags that you can put in of your choice, it will pull those people into Bloomerang, and you can either match them to an existing constituent in your database, or create a new constituent from that tweet or from that interaction. So it’s kind of a cool way to not only monitor your social media chatter, but also tie those into constituents into your database directly.
Once you’ve added them as a constituent, or linked them as an existing constituent, any time they interact with you on Twitter it will increase their engagement on their constituent profile. Bloomerang users who are listening know that we have a proprietary algorithm that sort of scores the level of engagement that donor has with the organization.
So not only can you monitor all that stuff, it actually impacts that score. It’s a nice way to maybe identify who would be good to reach out to when you’re doing a crowdfunding campaign, or just simply let you know who you want to respond to and interact with as the campaign is going forward.
That’s one that I kind of had a personal hand in designing because I felt passionate about it. It’s definitely a cool feature, and Rachel, I appreciate you bringing it up because it does have a lot to do with all of the things that you recommended and all of the crowdfunding advice you gave.
Rachel: Absolutely, and in fact when you’re looking for support to get active in a campaign, one of the things you can do is search for your supporters who have high engagement levels in social media. Right there you have a list of people you could recruit to start your campaign off because you know that they’re already engaged. It’s a wonderful feature, Steven.
So should we take some questions now?
Steven: Yeah. Let’s take questions. We’ve probably got about 15 minutes or so for questions. I’ve kind of flagged them as they came in. We’ve got about eight or so here right now, but I do want to encourage everyone who hasn’t asked a question. Don’t be shy. We’ve got Rachel here. She’s obviously and expert at your disposal for the next few minutes.
I’m just going to kind of roll through these, Rachel. One of your stats about how 80% of crowdfunding campaigns don’t even hit 20% of their goal, it’s still a very popular way of raising money. Why is it so popular with those kinds of bad numbers? Is it just kind of a symptom of people not following the type of advice that you’ve given and maybe just trying it assuming that money is just going to fall from the sky and they don’t really have to put a whole lot of work into it?
Rachel: You hit the nail on the head, Steven. The reason most of them fail is because we don’t choose the right project. We don’t set them up correctly. We don’t market them. A lot of people do mistakenly think that crowdfunding is something that once you set up the page, you will build it and they will come. But it’s actually more about what you do behind the scenes in terms of marketing. So that course that Pam and I teach together gives you strategies for you can do that and make the marketing work.
So it’s basically not following the advice that is here, because people love to give to crowdfunding projects. It’s not a matter that the donors don’t like it, but rather maybe that we in the non-profit world have not yet mastered the way of presenting the right projects in the right time with the right ask, and giving people the shout out in the right way.
Steven: Yes. It makes a lot of sense. Rachel, here’s a question from Rick. Rick’s wondering “If I’m targeting people who already know my organization, why not just use my own website? Why use a third-party platform?” What would you say to Rick about using a crowdfunding platform versus just his website?
Rachel: Rick, that’s a great question. The real power of crowdfunding or peer-to-peer fundraising is that it allows people to create their own fundraising pages, tell their own stories about why they care about your cause, and because it’s so personal to them when they share their pages with their friends, their friends are eager to contribute. If we were trying to do that in our website, first of all we wouldn’t be able to accommodate the number of fund-raisers.
So if you’re an organization like Food for the Poor, for example, when they do their walks they can have a thousand people fundraising for them at one time. There’s no way that our websites and webmasters would be able to handle that much traffic.
But even in a smaller context, you want those platforms because they’re already built to fit in with social media channels. They’re already built to have users create pages that are personal to them, and it just gives you a lot of flexibility and ease of use that you don’t have on your websites, unless you’re willing to pay tens of thousands of dollars to build it. But it really doesn’t make sense to do that when there are platforms that you can use very inexpensively to accomplish the same things.
Steven: Yep. Makes sense. Here’s one from Jim, and I know a couple of people asked about direct mail. You already sort of responded to that, but Jim was wondering, do you see crowdfunding replacing maybe telemarketing efforts? Do you think that crowdfunding could replace really any sort of form of fundraising, or maybe if there’s a shift happening, maybe away from something specifically towards crowdfunding, or is crowdfunding is kind of a new animal that kind of stands on its own?
Rachel: I think the answer is it could be all of the above. It depends. A lot of it depends on your organization, too. For example, if you are an organization that has a lot of older donors and supporters, then crowdfunding may not be the right tool for you. They may respond better with a telemarketing campaign. If you’re an organization that tends to have a younger crowd, then crowdfunding would out-perform telemarketing for you because young people are very social media savvy.
I like to think of it more as yet another tool in our fund-raisers’ toolbox, and it’s not replacing anything because it’s all about communicating with people in the channel and method that they prefer. So if we are looking at our organizations, and we look at the segments that we have, usually all of our supporters won’t fit into one neat age group or one channel where they are all gathered there. So I would look at it as a complementary possibility rather than a replacement.
The key is, and the good news is that we fund-raisers are very much an essential part of this equation. This tool can’t replace us because like any good carpenter, you have to know what tool to use for what job.
Steven: Yeah. And shifting to piggy-back on that, I’m a member of that generation. I’m 31. I’m a little old for a millennial, but I’m still a millennial and I gave to a crowdfunding campaign this morning. I gave $100 to an organization not because it was crowdfunding, but because they did a really good job of all of the things Rachel talked about today.
It was a very specific campaign. It was for one thing. They were trying to buy a new piece of equipment. The goal, I think, was $18,000, and they made a case for it. It was very compelling that that crowdfunding campaign was just for that specific cause, and I was compelled to give. I don’t think it was necessarily because it was crowdfunding, but because they were very specific and they followed all of the same advice. Maybe they had already followed you, Rachel, because they did all of the things you talked about today.
Rachel: Or they made the same mistakes I did and learned.
Steven: Which is okay.
Rachel: So Bret shared with us that he loved the emphasis on thank you letters, not just donation or tax letters, and he says he loves sending a targeted thank you response. I mentioned the secret weapon that I have, and I really believe strongly in the thank you process. I like to think of crowdfunding as a first date.
How we treat our donors will determine whether they want to stay engaged with us. So one of the things I will do is send a greeting card afterward. It may seem like a lot of work, but with the tools that I use is literally adding people to the campaign. It takes seconds and is very inexpensive, but it gets their attention.
If any of you find that interesting, the reason that I use it is a letter sometimes gets thrown out because they think you’re asking for money. Emails have open rates of 25% to 30% if you’re lucky. But when you think about a greeting card, how many times do we actually throw out a card in the mail? Never. I open it every single time. So if you want to know more about that I’m happy to share offline. Just send me an email and I’ll share with you.
But Bret, you’re absolutely right. The thank you is the most important part, and Bloomerang is famous for saying this, the thank you is the basis for retention. That’s what we want to do, because it costs a lot to get a first donor, even crowdfunding donors. It costs our time to set up the campaign, to market the campaign, to do the templates, do the how-to documents, and so the way we really make our money is by retaining those donors and using it again.
If you do your crowdfunding campaign well, the first time you do it it will be a lot of work, but guess what? After that it’s a repeatable event. For example, the first year that I did the recovery walk, I don’t want to tell you how many hours I spent, largely because I was learning by teaching myself and it was so new. But the following years it was just something repeatable that I could just literally retool the letters, change the dates and I’m good to go.
Steven: Yep. Makes sense. Rachel, I have a question from Hannah and I thought it was pretty compelling because this is something that I see a variation of this question asked a lot on a variety of topics, not just crowdfunding. Hannah’s wondering, “What’s your advice for defining a project or a campaign when you don’t really have an obvious need or a tangible need?” I mentioned earlier like the example of a piece of equipment, funding a specific piece of equipment.
What about organizations who don’t, and there are a lot of these organizations who don’t have a very specific tangible thing that they’re buying or trying to fund. Is there some way to work in operation costs or overhead, and I know you don’t want to make it just toward your general fund. But what advice would you have for organizations like Hannah’s where it’s a little bit tougher to make the case for a tangible result?
Rachel: While I start to answer, I’d love to know what Hannah’s non-profit is about, which would help give me a little context for the question. The answer that I use is that you will never, I shouldn’t say never because somebody will prove me wrong, but you rarely have success raising money for operations costs. How we think about those costs is important.
For example, my brother is a Catholic priest in Kingston in Jamaica in a very poor church. We used to, we still do actually, a feeding program for the elderly three times a week. So three days a week they come to us, they get a nice meal, they spend a few hours. So we were in the position that Hannah is in where you don’t have money for operating costs and yet it costs money to have these people in here.
So what we did was we figured out what percentage of time were they there for the week. Then we took our overhead costs. Let’s say they were there for a total of five days out of the month if you were to add up all of the hours. Then we would take one-sixth of every month’s electricity bill, every month’s insurance bill, and build those in as costs of providing food to those folks on those days. That’s how we were able to get our overhead covered because you raise money based on the true cost of the service that you’re providing, rather than just the part that the client receives.
Before we did that, we used to calculate it based on the costs of food only and we were never able to make ends meet. But by adding in all those things, which honestly, you can’t provide food unless you buy cooking gas to cook it, or electricity, you know? So that’s one way you can do is look at your mission and see what service are you offering and what is the true cost of that service.
You don’t differentiate between operating costs and the project costs. Basically, we do the same thing with the breakfast feeding program that we have for the kids. We have low income kids that we subsidize or provide free breakfast for because they don’t get it another way. What we do is figure out how much do we pay the cooks? How much does the food cost? All those things, then we divide it by the number of meals, the number of kids, and we basically come up with a cost for that one meal for one child.
I’d be happy to talk with you some more, Hannah, if you shoot me an email after this presentation. Maybe I can help you come up with some ideas for you, but did that help a little bit?
Steven: Yeah, those are great ideas for sure. Rachel, this one’s from Casey. Casey’s wondering about community crowdfunding. So like days of giving, some states have a statewide day of giving, or maybe some other sort of third-party event where lots of organization are crowdfunding at the same time. How do you feel about those? Are they beneficial? Do you get lost in the crowd? Do you think people should try those types of things? What do you think there?
Rachel: Again, the answer depends. It is a little more difficult on the giving days to get attention because you’re competing with so many people. But if what you put out there is of a very high quality, you’ll rise to the top. So I don’t worry so much about how many other people are trying to go after the same people.
I want to be the best, the one that gets their attention because it’s so well-done. Sometimes that means being the one that does the best job in social media, giving shout outs to donors when they give. Maybe it is taking the time to create a really good profile on the giving day host’s website so that people actually find you.
Here in South Florida we have the Miami Foundation’s giving days. The first year that we participated we thought, “Man, nobody’s going to know who we are.” We have brand name recognition but that’s about it. But we actually spent the time to create profiles for each of our programs, and told success stories on each of those profiles, and we got quite a few new donors from that because we took the time to do it well.
So the answer to the question is if you have the time to do it well in every aspect, social media, thank you’s, filling out those profiles, and advanced promotion to your folks, then yes, it’s worth doing.
As far as using crowdfunding to do that, that’s what the hosts of these giving days are doing. Miami Foundation uses a product from Blackbaud and you’re able to get donor information out of it. Its similar but different. So when I’m talking about crowdfunding here, you could use it to start a giving day if you live in a place that doesn’t have one already. You could do a Giving Tuesday giving day, for example, if you want to do that.
Steven: Yeah. You could have your campaign, but also create something to kind of frame it. That’s kind of cool. I don’t see a lot of people trying that, but I bet it would work. Bret has a question, my buddy Bret. I know you read his comment earlier, but Bret’s wondering about incentivizing gifts, maybe giving something like a non-tax-deductible good or item in response to the gift, kind of like a premium, I guess. What do you think of that? Have you seen people do that? Do you think that’s a good idea? Has it been successful?
Rachel: The best example of that is to listen to NPRs fundraising twice a year. You can do it, but I don’t think it necessarily influences the size or type of the gift. Again, it’s something that you have to experiment with because every project supporters are different. What we found worked well for us was offering prizes to the fund-raisers, because they’re the ones who are really raising the money for you, not the person who’s giving it.
So for example, when we had the $25 gift cards and we said you’re going to get a raffle ticket for every $100 you raise, it doubled what we raised. We went from raising $10,000 a year to $25,000. Part of that may have been coincidence and getting better at it, but people love the fact that the front runner didn’t win the prize. Because if you think about it, my son happened to win every year the first prize.
So if he’s thousands of dollars ahead of you and you don’t have hopes of raising that money, you’re not going to really feel like a prize is even an option for you. Whereas when it’s done by raffle ticket based on every $100 you raise gets a raffle ticket, you have an incentive to keep raising money. And that works. Bribery works.
Steven: That’s cool. Very cool. We probably have time for about one more question. I don’t want to keep you much longer, especially if you haven’t eaten lunch. Here’s one from Alan I thought was pretty interesting. Alan says, “I see declining federal funds for children’s mental health research as an opportunity to ask private donors to support. In your opinion do you see crowdfunding as a platform that could raise that money?”
I guess the broader question is do you think that if an organization sees like maybe one particular channel of giving decrease that maybe they could bring crowdfunding up and replace that rather than tacking it on in addition to what they’re doing?” What advice would you have for Allen there?
Rachel: I’d like to kind of explore that a little bit more. In a case of a matter where federal or state dollars or grant funding has decreased, then definitely you could use crowdfunding as a potential replacement to help increase those revenues. However, if it’s another channel where the revenues have decreased, that’s something that we would need to look at more closely.
For example, is there something wrong with our acknowledgment process, our thank you process, is there more we could be doing in terms of inviting people in for tours, more personal relationships with donors? So it’s important to look at the cause of why the funding has declined before concluding that crowdfunding is a good replacement. If you have deficiencies in your core fundraising practices where you’re not doing donor love well, those are only going to be amplified in a crowdfunding setting.
Steven: Here’s a quick one from Colleen and then I’ll let everyone go. Colleen is wondering if there’s an optimal length of time to run the campaign to do, leave it up for a long time, it seems like if you leave it up and people aren’t giving that unreached goal might look bad. What do you think about how long you should run things?
Rachel: Well this is one of the topics that we explore in the course that I mentioned, is the perfect timing, but you definitely don’t want a long campaign. You need that sense of urgency to inspire people to give right away. The longer the time frame, the more room for error, the less likely you’re going to succeed. In terms of the published time line, you want a shorter time line, but realize that you may need three months behind the scenes to make sure you have all of your templates and everything good to go.
There’s a lot of work that goes in ahead of time, but ideal length again it depends on the project, but I would say six weeks worked really well for us. It may be different for you depending on the project and the constituency.
Steven: Very good. Well, Rachel, I think we’ll leave it at that in terms of questions, but I want to give you the last word. I know you’ve invited people to reach out to you. I definitely want them to do that. Your contact info is on the screen here now, but anything you want to say here now about people getting in touch with you or what they can expect from you going forward?
Rachel: Well, I want to thank you all for giving me an hour of your time, and thank Steven for hosting me here today. I’ve had a wonderful time. It’s just an amazing experience to see all the questions and realize how much interest there is around this topic. I do love to keep in touch with folks, so please reach out to me. I’m the one who teachers the course that we offered you, so you’ll get direct contact with me there.
Tweet to me. Send me a Facebook message. Connect with me on LinkedIn, even if you have a question that’s not about crowdfunding, please, I’ll often try and answer as many questions as I can. So reach out to me. My passion is helping small non-profits grow, and I just love meeting other people who share that same passion, and all of you do. So thank you so much.
Steven: Yeah. This is great to have you, Rachel, and I definitely hope people will reach out to you and take advantage of your class with Pamela. Pamela’s one of our favorites and Rachel, you’re now one of my favorites, too, because this is awesome. This was really fun to have you. We’ll have to have you back again next year or sooner. Yeah. It was fun. And thanks everyone else for hanging out for an hour. I know everyone’s busy, you’re probably doing lots of tax receipts and thank you letters from your annual campaigns. So thanks for hanging out with us.
Definitely want to invite everyone back next Thursday. We do these webinars just about every Thursday. There’s lots of resources on our website. We’ve got our blog, of course. Lots of fun downloadables, my newsletter, my video podcast Bloomerang TV and the Bloomies, which is our award for outstanding donor communications. You can get lots of ideas there.
Next week should be a great one. We’ve got Vanessa Chase. She’s going to talk about storytelling. She’s kind of our storytelling expert. You may recognize her from the Stewardship School. It’s going to be a great presentation. Be here, same time next Thursday.
We’ve got some other great webinars already scheduled out into advance. I think we’ve got maybe the next three or four after Vanessa, so you can check out our webinar page, and you may find a topic there that is interesting to you. But we’d love to see you again next Thursday, if not another Thursday sometime soon.
Stay tuned for an email from me. I’ll be sending out the slides and the recording in probably about an hour or so you’ll have those. So look for that and hopefully we’ll see you again next week. So have a great rest of your Thursday and a great weekend. Bye now.