Crowd funding, sometimes referred to as crowd sourcing, is an online phenomenon that began fairly recently. It is based on age-old models of cooperative funding like the Irish Loan Fund from the 1700s, which provided micro loans to poverty stricken rural families and has evolved into popular micro lending models such as those developed by Dr. Mohammad Yunus, which providing much needed capital to small businesses in India. Cooperatives and businesses are now utilizing the internet to achieve similar goals to help small businesses with startup capital and, more recently, have shifted to provide online platforms for nonprofit organizations to achieve fundraising goals for specific projects.
Current examples of successful website platforms for nonprofit fundraising include CrowdRise.com, Fundly.com, Razoo.com, Give2gether.com, GiveZooks.com and Rally.com What all these platforms have in common is the logic of their platforms – they all typically display current causes for donors to easily find and get involved, simple membership signup forms for new organizations to come on board and post their causes, tracking systems to watch funding totals increase and goals reached, and social networking for donors and causes to communicate.
CrowdRise includes a voting function whereby users can assign points to members, not only based the validity of their cause or money donated, but also on the amount of effort they put in to recruit other donors and members. This “rewards” approach has proved very successful for CrowdRise causes to quickly become viral, spreading throughout communities quickly to gain new memberships. Additional assistance for the quickly gained popularity of CrowdRise is that its primary founder is actor Edward Norton, so the venture gets much more potent exposure than its competitors through television spots with Edward and other celebrities. These online donation platforms all make a profit by taking a small percentage of each donation, varying from 2% – 7%.
How well do these online fundraising platforms perform for causes? Follow our next installment at: http://thedesignpress.com
Since the launch of the social networking website Facebook.com in 2004, the user base has grown exponentially to 800 million users as of July 2011. This was followed by the launch of Twitter.com in 2006, which has grown to over 300 million users as of July 2011. Both these websites represent a major shift in the way people connect with each other and how they spend their spare time. It has also created arguably the world’s largest database of potential online customers, and businesses rapidly became a part of the action, trying to find unique ways to interact with the multitude of users. Nonprofit organizations have been a bit slower on the uptake, but are finally coming around to establishing social network presences, as they also see the potential for connecting with huge amounts of people to communicate their mission and projects to.
Businesses have found it slow-going in this infancy stage of social media and there are not yet firm reports on return on investment for advertising projects that try to engage users. All that they really can state for sure at this stage is that they need to be on Facebook and Twitter just due to the sheer volume of users, and they will stay the course until clearer marketing strategies unfold. For nonprofits the future is not as clear, as questions arise as to whether fundraising can function effectively on these platforms, even though they are successful tools to grow an organization’s member base.
Although usage rates on these websites have exploded over the last two years, there is a great deal of uncertainty that goes along with the purpose, efficiency and effectiveness of these tools.
It’s obvious that, with a little work, an organization can grow a substantial base of users on Facebook and Twitter. But what do these users actually add up to? Are they donors? Are they new supporters? These questions have led to new terminology coined in the nonprofit world, creating a distinction between “friend raising” and “fundraising.”
Besides the standard creation of a Facebook profile and fan page, the most direct tool available to nonprofit organizations is Facebook Causes, a separate platform which reaches all Facebook users, but is limited to 501(c)(3) organizations as members. The platform was created in May 2007 and has since raised $21 million for 390,000 causes through the efforts of over 100 million active users. It has seen a ten-fold increase from $3000 to $30,000 in monthly donations between 2007 and 2009. Causes’ stated mission is “Causes strives to empower people have a positive impact on the world.”
The second important type of social networking is micro-blogging, and the primary location to do this is Twitter. Millions of users check each other’s statuses, follow who they’re interested in, and send each other short pointed messages to communicate. Again, we see a huge potential for reaching multitudes of online users and finding new supporters and potential donors, although strategies remain unclear.
A large portion of Twitter’s mission is assisting organizations in the “open exchange of information that can have a positive global impact.
Other social media websites includes LinkedIn, a website for professionals to make important connection and share information, and Myspace which is reserved mainly for teenagers and youth to enjoy music and video sharing. Both websites contain large amounts of users but do not represent an optimum platform for businesses and nonprofits to engage effectively.
Facebook and Twitter remain the two main communities that have ideal settings to broadcast nonprofit ideas, and actually profess to support this type of engagement. However, the overall impact of social media websites like Facebook and Twitter has only begun to be analyzed by researchers in marketing, corporate advertising and academia.
“Nonprofit organizations must rely on a variety of activities and resource providers to support their mission-related work. The classic image is that of traditional fundraising to attract charitable donations from individuals and corporations for socially valued programs. Another common revenue strategy is the pursuit of grants and contracts from foundation and government sources. A more controversial approach involves commercial activities, such as selling products to customers or charging fees for program services.” (Laird)
It is critical that organizations have an appropriate combination of grants, major gifts and a solid internet fundraising campaign in order to avoid potential income gaps that could cause program or personnel cuts that could be detrimental to the fulfillment of their mission. It has been estimated that one third of all giving to nonprofits organizations is now online as of 2010. (Olsen)
First, if an organization’s website was built before 2004, it should likely be upgraded with a makeover to Web 2.0 standards of interactivity with clients. If a donation system is included, make sure that donation buttons follow proven standards to be compelling and do their job effectively. Consulting with an organization about any current projects or campaigns, and what the demographics are for their constituencies, can provide the basis for a private social media site based on that topic. Develop a synergy among all websites – nudge users from Facebook to join your private social site, make sure there are links and even graphic ads to compel users to visit among all the various web presences of the organization. In this way they can meet other users they may not have previously on another platform, and can become proactive in supporting causes and helping things go viral.
Since email newsletters have a longer proven track record of successful customer acquisition and retention if used correctly, these programs should be the ultimate target for any web campaign. Keeping long term relationship building as the goal, new friends harvested on Facebook, Twitter, Linkedin and other social sites should not necessarily be “pitched to” immediately. The goal would be to direct them to email campaign signup forms on an organization’s website or private project-based social media site. Since internet users are not likely to give up their email address without getting something in return, we should ask what rewards are given in exchange for their sign up action. Rewards could include special deals on products from a Mission Shopping cart, an e-book or short research study about a topic of interest within the organization, a short story by a recipient of the organization’s services about how they were helped, or simply a promise for future updates and news.
The majority of nonprofits have an organizational website, and many have had the same website for years. One of the primary problems with outdated websites is that they were built before the new Web 2.0 standards became commonplace. Older websites have a look and feel of a book, with a menu to choose a page in a certain category. There is little viewer interactivity and generally these sites do nothing more than display an organization’s mission, history, board and staff, although these are still important features to show potential funders. In attempts to catch up with current e-commerce trends, some sites will contain donation buttons to entice viewers to donate to the organization’s cause. Others will have an e-newsletter signup form to begin the process of communicating with potential new members or donors, and gathering a database of email addresses.
Web 2.0 standards became commonplace in 2004. Although the term suggests a new version of the World Wide Web, it does not refer to an update to any technical specification, but rather to cumulative changes in the ways software developers and end-users engage. A Web 2.0 site allows users to interact and collaborate with each other in a social dialogue as creators of user-generated content in a virtual community, in contrast to websites where users are limited to the passive viewing of content that was created for them.
Nonprofits in 2011 have limited funds and overtaxed staff, which puts constraints on plans to upgrade older websites to Web 2.0, or to make even slight additions which could greatly enhance fundraising capabilities. However, with the recent wave of “off the shelf” open-source software solutions, a current Web 2.0 presentation can be achieved at an average of 500% less than ten years ago, and also be easily manageable by current staff, as opposed to requiring a webmaster to make every small change in content. Content Management System (CMS) website software which is affordable and robust includes WordPress, Joomla, Mambo and Magento and others. All are database driven and content can be changed through an administration panel easily by staff after initial training. Pre-designed templates for these software products, that already incorporate Web 2.0 standards for user interaction, can be purchased and installed cheaply, whereupon issues like menu bar order, placement of content and visuals can be easily manipulated for optimal promotional impact with users.
Website design overall should follow five essential rules:
- Branding – should communicate the identity and personality of the organization.
- Mission – should educate visitors about the nonprofit’s charity and mission.
- Explain – layout should clearly direct visitors to donate or purchase through a catalog.
- Presentation – clearly display services offered, how donations will be used.
Essentials – customer service, hours of operation, contact information, newsletter signups.
More in our next entry…
