Crowdfunding, a combination of online fundraising and marketing, is a powerful way to raise money from strangers for all sorts of projects.
Fundraising by Megaphone
In recent elections, candidates have used crowdfunding to raise billions of dollars from millions of donors.
They used the internet as a megaphone to ask the public for support, and then collected the cash via political crowdfunding platforms like ActBlue and WinRed.
In the old days, the would have just used the phone. Traditional fundraising meant ‘dialing for dollars:’ calling up one potential donor after another, pitching them on your cause, and stroking their egos.
But the crowdfunding megaphone has now changed everything. Selling to big donors (‘whales’) still matters, but marketing to the crowdfunding masses has become even more powerful.
With crowdfunding, people can fund personal causes and projects (on sites like GoFundMe), creative projects (e.g. on Kickstarter), and even social entrepreneurship projects (e.g. via Kiva).
Though ‘passing the hat’ to raise money always existed, the internet has made crowdfunding central to fundraising: without it, you’re missing out on the biggest pool of potential donors and money.
Here’s why crowdfunding is so powerful, and what it has changed:
- the potential funding audience is unlimited
- the costs of online fundraising are very low… pennies per transaction vs. many dollars the old way
- word of mouth works immediately to drive donors to your site/cause
- brand excitement and personality becomes more important than calls, meetings and stroking egos
- crowdfunding is ‘scalable’ (because it’s based on marketing, rather than sales)
- it’s easier than ever before to test, launch, and fund a cause or project
So the next time you need to try raising money, don’t reach for the phone, reach for the (crowdfunding) megaphone.