4 Tips for Effective Nonprofit Fundraising through Microfunding Programs

Several nonprofit fundraising subsectors have been affected by the economic downturn and have experienced inconsistent growth in fundraising revenue over the past year. According to the latest Blackbaud Index in the 3 month period ending March 2012, all but one of six nonprofit subsectors experienced a decline in overall giving compared to the same period in 2011. An effective channel that smaller organizations and grassroots groups may want to consider to raise funds is microfunding (also known as crowdfunding).

Microfunding can be an excellent way to raise money for a specific project or campaign. The appeal to the donor is a greater sense of engagement as often donors want to support more than just a cause. There is a sense of community – a connection that comes from seeing a project funded from start to completion. Another appeal is that it tends to be more financially accessible to a greater donor segment. The popularity of this fundraising channel has grown tremendously. Sustainablebusiness.com recently reported that this method of fundraising has raised $1.2 billion worldwide in 2011 alone and that is expected to double. Although popular, there are several factors that should be considered before and during the set up of a microfunding program and these 4 tips are good places to start.

1. Research. There are many microfunding platforms available online but each has its own unique specialty so it’s important to conduct thorough research prior to deciding which one to use. Each platform offers different features and benefits and many are geared towards a specific subsector of our industry so it’s critical to determine if they are a fit your organization’s audience, demographic and can well-represent and support your program. Other aspects to consider are: a) the cost associated with running a program on the platform; b) a safe and trusted online payment portal; c) integration with social media (Facebook and Twitter in particular); and d) any commitments associated with completing the funding project.
2. Set Realistic Goals. Setting a realistic fundraising goal is key to the success of the program. Some platforms demand that a minimum percentage of the goal to be met to proceed. While you want to ensure the goal is achievable, you also want make sure that you are meeting your fundraising needs. Think of your project on the whole, the average donation, social media reach and the amount of time your program will be running when determining a reasonable goal. You want the program to be a success because it will fuel the success of future programs.
3. Connect to Social Media Platforms. The success of your microfunding program will benefit greatly from connectivity to your existing social media networks and the collective donors and supporters they represent. They are important for two reasons: a) you need their direct financial support; and b) you need them to help spread the word to their own personal networks. Many microfunding platforms have direct connections to Facebook, Twitter and LinkedIn but you would know that already through your research.
4. Provide Timely Updates. Raising money through microfunding is slightly different in that your commitment goes beyond simply thanking your supporters. Supporters generally help a microfunding project to see their money at work and see a project materialize. It’s that very connection that drew them to supporting the program in the first place. It’s important to provide ongoing, timely updates of the project’s status right to completion and beyond as is often required in many online microfunding platforms. Including pictures or short videos will bring your project and cause to life and keep supporters engaged. Pre-planning and scheduling your updates in advance will ensure that this important element is not forgotten and is well-formulated.

Microfunding platforms can certainly help fund programs and motivate supporters to accomplish a common goal in a way that is affordable, engaging and effective.
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Miratel Solutions is a Toronto call centre, eBusiness, and letter shop mail house specializing in professional fundraising services including telephone fundraising, online fundraising, lottery services, donation caging, donation processing and other donor management services. We are committed to our CSR business values in all contact centre services and mail house operations and advancing the missions of the nonprofits we proudly serve.