The single most important feature of fundraising is the relationship. In any field, any sector, the relationship between those asking and those giving capital is the determining factor.
Yes, product or mission matters; it needs to align with the personal philosophies of the donor, but more important is the interpersonal connection between those two parties.
Today, technology has created an ease of communication, but not necessarily an enhancement. Nuances are hard to detect and depth of friendship can be misinterpreted.
Crowdfunding suffers from this issue and can have the wrong type of impact on a venerable NPO.
Why Organizations Choose Consumer-side Services—Reach & Cost
In our experience, it is solely a decision based upon the reach and exposure an organization can attain without much lift. At first instinct, yes this is true and seems to be in-line with solid strategic thought. Digging deeper into the structure or economics of a consumer facing service, we begin to uncover glaring concerns:
1. Steep Transactional Costs, especially if you do not achieve your campaign goal.
Think about that one point: if you don’t achieve your goal, you pay more to the platform. Now, let’s preface this by saying that this is not true for every service, but for a few. Be cautious.
2. Most fully funded projects are funded offline through personal networks
In other words, your reach is predefined, so paying for the inherent “search” capability isn’t as beneficial as one would believe. Be ready to send out the same amount of appeals no matter what platform you find yourself on.
3. Donor data isn’t easy to acquire
Essentially, the odd donors you do acquire are not necessarily loyal donors or ones that you can easily steward because you can’t truly pull their pertinent details. Aren’t the new acquisitions just as important as the funding? Long-term thinking is a must!
Where P2P Succeeds—Cost & Relationships!
We won’t delve into technological capabilities here because many P2P providers fall dramatically short of current needs and standards and are easily surpassed by Crowdfunding –A story for another blog post. However, Proprietary P2P solutions are something that most nonprofits should look more diligently at investing or re-investing in for the long term.
Contrasting the pitfalls of Crowdfunding platforms, peer-to-peer platforms provide:
1. Complete control
2. Lower transaction fees
3. Ability to exponentially grow AND capture new donors for nurturing purposes
As a strategy, Crowdfunding and P2P seem to be the appropriate strategies for fundraising in years to come. Merely on thought process alone, they force organizations to push for impact in untapped areas.
The ways individuals donate is changing. The interest in mobile, the variety of approaches to specific cultural issues, and the growth of a conscious demographic looking to act immediately shines a harsh light on the need to work diligently to keep moneys loyal. So as you expand reach, maintain focus on donor perspective: Relationship to cause, visible impact and organizational advocates.
Ready to nurture growth? Let’s help you started, TODAY!
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