What Crowdfunding Means For Philanthropy

Lazar Finker—Crowdfunding and Philanthropy

Whether it’s for medical expenses or to produce an aspiring artist’s new album, the impact of crowdfunding cannot be ignored. The “traditional” avenues of philanthropy—soliciting donations and support through a nonprofit—seem far less effective when individuals can easily set up a page on a site such as GoFundMe and immediately reach an audience. Nonprofits have worked to not only help individuals but the causes of issues that affect them as well, whereas crowdfunding gives interested donors an avenue directly to an individual.

 

It’s certainly noteworthy, but to what extent will these new platforms change existing charitable efforts?

 

I believe that, rather than supplanting traditional philanthropy, crowdfunding fills a distinct niche that can coexist alongside nonprofits. It’s not hard to see why crowdfunding is popular. For decades, nonprofits have struggled to reach potential donors and make them inclined to donate, with initiatives that have sometimes come across as tone-deaf or condescending. Overall, it’s not just about selling the idea of a noble cause, but about the stories that make the cause worth contributing to.

 

Humanizing the people that benefit from philanthropy has become especially important in recent years, something that crowdfunding platforms do well. Nothing is more authentic than an individual personally coming forward to tell their story and request assistance. Add in the power of social media and an instant audience in the form of online connections, and we have a formula that has already raised billions of dollars.

 

With nonprofits, missions don’t always include provisions for individual support. These initiatives are highly impactful, but leave some people seeking other options. Crowdfunding turns this on its head, giving the beneficiaries the oversight over where the money goes and changes the narrative about what donations can accomplish. However, nonprofits aren’t experiencing fewer donations; the numbers have more or less stayed the same. This is a pain point for many of these organizations given that the industry as a whole has not made significant gains in recent years, despite a recent surge of funding.

 

The question of impact also characterizes the differences between these two approaches. Donors, particularly younger donors, display a desire to see the immediate impact that their funds make. This is far more pronounced with crowdfunding, particularly when donation goals can illustrate the collective accomplishments of donors. Savvy nonprofits will take note of these changes and find ways to demonstrate the value of a contribution to their audience.

 

Crowdfunding has also called into question whether these donations should be considered tax deductible. Some people believe that this makes donating more appealing, as any funds will not be filtered through a charity’s ecosystem before being put to use. Others believe that the lack of rules around crowdfunding opens the door for fraud.

 

Whatever the case, the instant support network created by crowdfunding provides a new type of philanthropy, one centered around grassroots movements and the notion that people should give back to their neighbors. This coming at a time when nonprofits try to reinvent themselves indicates that, perhaps, these organizations should focus on their stories—as well as providing transparency about where their funds go. There’s still a place for nonprofits, but this dichotomy of giving may only become more pronounced as time goes on.

 

How Nonprofits Can Leverage Social Media

How Nonprofits Can Leverage Social Media—Lazar Finker

Changes in how information is spread have forced nonprofits to adapt or fall behind. To that end, may of these organizations have tried to create strong brands for themselves online, an endeavor which requires the creation of social media accounts and consistent delivery of content. There’s an audience for every cause; but not all nonprofits are created equal when it comes to generating support through social media.

With this in mind, I’d like to discuss a few of the factors to consider when running a social media account as a nonprofit.

What do you want to achieve?

Social media is an effective tool, but it’s not enough to just start an account and expect followers to come out of the woodwork. Before a nonprofit creates social media properties, it should consider the possible outcomes of their campaign and determine what they’re hoping to achieve. Part of this involves defining an audience; they will inevitably play a role in an organization’s outcomes and should be considered carefully.

Conducting surveys and crafting personas are both solid first steps when it comes to defining an audience; and segmenting it as much as possible can create a few different angles to consider when creating content.

What value do you provide through social media?

Once an audience has been established, nonprofits will need to consider methods to properly engage with them. Often, nonprofits will opt to establish themselves as authoritative figures in their subject of choice by crafting original content. This approach is the most useful for establishing brand recognition for a certain nonprofit and education, as it gives an organization control over the message they are sending.

Alternatively, a nonprofit can become a curator of content in their field of choice, a similar approach that allows for easy sharing of news and establishing relationships with other organizations. Lastly, nonprofits can use social media as a platform for bringing their community together, promoting an exchange of ideas and creating passion for the cause.

Really, all three of these have merit, and a balance of the three depending on objectives is the best way to provide value to an audience.

How do you deliver good content?

Part of prompting engagement and raising a strong audience is delivering solid content to stakeholders. Content should be regular, match an organization’s voice and brand, and, perhaps most importantly, be authentic. Don’t go into a social media endeavor with the open intent of leveraging an audience to accomplish something; provide them with answers, engage frequently, and help them as much as you can. This will keep followers coming back and make them more likely to spread the word on their own volition.

Additionally, organizations should ensure that anything posted is of solid quality; paying for stock images or leveraging existing video of charitable efforts can create interesting, visually-dynamic updates.

What to do with an active audience?

In the best case scenario, all a nonprofit need to do to turn a social media following into capital is ask for donations.

This is, however, only practical with an active and engaged following. For that matter, it helps if a nonprofit has an objective that they’re looking to accomplish; involving social media followers as closely as possible is great for generating further engagement.

In many ways, working with social media followers is fairly close to working with potential customers in a for-profit business. Measuring each step of the process is crucial, and involves monitoring outreach activity, page traffic, conversion rates, and retention rates. It’s all about building a relationship that works two ways, and although nonprofits seldom have time to interact with each and every social media follower, they can still be responsive and prolific enough to make meaningful connections through various networks.