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How Crowdfunding is Impacting Giving Behaviours and What Not-For-Profits Can Learn From It

@digitalstream - Feb 11, 2019

How we give, when we give and who we give to is shifting, and so it’s important charities and not-for-profits keep abreast of these changes if they are to stay relevant to today’s audiences. By understanding key drivers to these changes, charities and nonprofits are in a better position to champion their cause and grow supporters. In this article, we’ll explore the impact crowdfunding initiatives are having on charities, along with what we can learn from them. But first, let’s start with two important statistics.

 

The number of charities is growing

New Zealand now has one charity for every 170 people; a much lower ratio than Australia, Canada, the United Kingdom or the USA. Since 2010, 2.5 new charities are launched each business day according to Statistics New Zealand*. In many ways, the digital era has made it easier to promote a cause, gain an audience and grow supporters, but it’s not just charities people are giving to anymore.
 

Crowdfunding is having an impact

Donations are reaching people and ventures that in the past would have gone unheard of, and this is at some expense to charities and nonprofits according to the Global Giving Survey.  

Crowdfunding campaigns that benefit individuals are growing in popularity worldwide. 41% of donors to charitable organizations also donate to online crowdfunding campaigns that benefit individuals. Worrisome to some organizations, but not surprising, 16% of these donors say that they give less money to organizations due to their crowdfunding. Global Giving Survey

Social giving websites like Givealittle and Pledgeme are providing a voice for people and causes that may not have been heard in the past. Whereas in the past people would go to a bank to ask for capital to fund a business venture, today they may choose to crowdfund. While in the past people would turn to extended family to fund urgent medical treatments, today they may choose to start a givealittle page. In a matter of hours thousands can be raised for individuals or families in immediate need; and in just a few days millions can be crowdfunded to buy a beach, fund a new business venture or bail out an ailing one.

On their pledgeme page, you can see that Riot foods raised $1,000,000 in funds from just 157 people in a matter of weeks. Think of the time it would typically take a charity to fundraise that amount, and how much work would be involved. By telling their story, engaging followers and encouraging dialogue through an online forum, they achieved the ‘pledges’ necessary to further their venture. Now I realise Riot foods is not a charity, but they provide a good example of fundraising in the social and digital age.
 

Know, Like and Trust Factors are Important

Perhaps what made Riot Foods such a successful fundraising initiative could in part be attributed to building know, like and trust factors. With well known and liked local personalities fronting the company, they were able to gain the trust of supporters. It’s unfortunate for those who pledged their support that the company has now been placed in administration (4 Feb 2019, News Hub) and it would be interesting to know if this has any impact on venture capital crowdfunding moving forward.
 

Cause Positioning is Vital

Let’s consider another example, the purchase of Awaroa Beach through crowdfunding. This is a powerful example of how values can unite a nation and sharing can build connections. If you haven’t already read their givealittle page, I would encourage you to as it provides some valuable insights for cause positioning in a social era. I’ve included a brief extract below.

After a Christmas Day conversation discussing things 'New Zealand', we decided to give everyday people the chance to try [to] keep this beautiful and picturesque piece of NZ permanently off the property market and in the hands of all future generations of NZ'ers and visitors.

Hence we set up this 'givealittle' project.

We hope that this [is] an opportunity for people to express their vision for NZ and the values about the way we want to live. We hope it inspires and empowers other people just like it has us.

The processes will remain transparent and public. All money pledged will only be drawn down when the paperwork has demonstrates the purchasing and gifting of this precious parcel of land are safe.

We believe this is possible, we hope you do too.

There are a few things that stand out about this story, and indeed many others on crowdfunding websites.

  1. It plays to values, in this case, sustainability and preserving our precious beaches for future generations.

  2. It’s a real story, told by real people; not a carefully orchestrated message positioned by an organisation.

  3. It gets people talking about, sharing, liking and championing the cause via the story.

  4. It plays to urgency, and the need to act now or never.

  5. It provides assurances with the donation will only go to the intended cause.

  6. Feedback is instant, as every donation moves the tally that little bit further towards the goal, which helps to spur on momentum.

So what can charities and not-for-profits learn from crowdfunding campaigns like this? How can they apply these learnings to their own websites and digital marketing?  
 

Define your Charity Value Proposition

It starts here, with your values and what you stand for. Can your audience relate to these values? Are they positioned in a way that’s easy for them to understand? Remember 2.5 new charities are launched every single business day according to one report by Statistics NZ. You need to ensure that yours provides a clear point of difference, is relatable and meaningful. People form connections with causes, not corporations. Causes speak to shared values and bring people together around a common purpose. Make the cause the star of your digital marketing.
 

Share Stories

One way to do this is by sharing stories. Stories help build connections and credibility. Donators need assurances their money will reach the people they have in mind when they’re gifting, and so it's important to share the stories behind the causes. It’s nice that these stories are written by the people who have benefited from your charity.  By way of an example, consider this website - Music Therapy. I encourage you to read both ‘About Music Therapy NZ’ and Lou’s Story. The ‘about’ page explains what they exist for, and the purpose of the cause. Then there is Lou’s story, which provides a touching first-hand account of how this cause has helped her. One speaks to the mind (about us), and the other the heart (Lou’s story). By bringing hearts and minds together, charities can delivery a powerful message to champion their cause.

Here is another powerful example of storytelling - Variety the Children’s Charity. This website provides first-hand accounts of the children donations have helped. Each story is personal and deeply moving. Once you’ve shared your story, it’s important to encourage others to share it too.  
 

Encourage People To Share Your Stories

We live in an age where connections are formed through sharing: posts, likes, comments and photos. Stories are what spur us on and bring a cause into the spotlight. The momentum and movement behind a story can be remarkable. At the start of the day hardly anyone has heard about it, come to the end we’re all talking about it on social media, reading about it on news forums and watching it on TV. Social media must play a starring role in all digital marketing for charities in order for them to gain a wide audience.

Recently we heard of the tragic story of how a mother and two daughters now have to navigate life without a much-loved father and husband, after the car he was travelling in was rear-ended at a Botany intersection. A nation grieved for this family and the precious moments they were robbed of together. This story is an example of someone being in the wrong place at the wrong time, and the mammoth consequences that followed. We realise that it’s a situation any of us could have been in, and are grateful to have been spared it. Feelings of empathy and gratitude inspire giving, as ‘it’s the least we can do’.

I wish we could have saved him at the scene but he could not be revived. The little we can do now is to help his family and hope he can RIP.+

In just over 24 hours, a nation rallied together to raise almost $170,000 for this family; a testament to the love and generosity of our nation. With 3618 people giving on average $46 each, it’s an example of how a little really does go a long way.
 

Share Facts and Urgency

Where you can, share facts in your story. Facts are confronting and much harder to ignore than generic messages, no matter how inspiring those messages are.

Here’s a fact:

90% of New Zealand’s wetlands have been lost.

Here’s another fact:

Wetlands are vital in maintaining healthy ecosystems. They improve water quality and reduce flood risks, provide biodiversity and play an important role in managing climate change.

Here’s an urgent call to action:

Our goals are urgent, will you help us?

Facts are a powerful way to show the consequences of not giving to your cause. What are the facts around your cause? Which ones are urgent and impactful? Make sure you share them.
 

Provide Assurances

Remember, people give to causes, not corporations. They want to feel they’re making a difference by choosing the right one to give to. Sharing stories from people you’ve helped is one way to provide assurances, but other ways include providing a break down of where the money will go and examples of how your cause has served, enabled or assisted in the past. There are many visual examples of how you can achieve this, like talleys, which leads to my next point about feedback.
 

Provide Feedback

Feedback provides momentum. We live in an era where feedback is constant. To be able to see targets met in real time is exciting, and seeing first hand the difference we’re making is gratifying.

Those of us who are old enough to remember the Telethons of the 70’s and 80’s, clearly recall the energy and excitement around each one. The sleepovers, pledges and celebrities - for 24  hours our nation was fixated on giving. Such concentrated, collective focus delivered amazing results. Feedback was pretty much instant; the tally was adjusted as calls and pledges came in (albeit manually), and this momentum helped spur donations on even further. Today, mini telethons like these happen online frequently through crowdfunding initiatives and often social influencers of our time are the celebrities that help catapult them into the spotlight. Constant communication with your supporters is vital for you to grow your cause.
 

Closing Thoughts and Key Takeaways

Digital marketing plays a critical role in the success of charities today. Make sure you incorporate all the right elements to empower your cause and engage your supporters. The right marketing will help position your charity as relevant for a modern giving age, while building know, like and trust factors.

People give to causes, not corporations, so make your cause and what you stand for the champion of your digital communications. People like to feel that what they give, no matter how little, is making a difference. They want to see that “a little goes a long way”. Storytelling is a powerful enabler of sharing this difference, as are facts and providing ongoing feedback on how you’re going.

For more insights on how you can grow supporters, talk to digitalstream. We’re here to help you champion your cause. We’d welcome your feedback on this article, and also your thoughts around digital marketing for charities. If you’re interested, we’ve included a link to this checklist of features and benefits of best-practice charity websites.  

*2016, Statistics NZ, Non-profit organisations contribute $6 billion to the economy, Retrieved from URL: http://archive.stats.govt.nz/browse_for_stats/economic_indicators/NationalAccounts/non-profit-2013-mr.aspx

※2018, Global Trends in Giving Report.

+Giveallittle, 3/2/19, Support the Victim's Family of the Botany Downs Car Accident 28/01/19, Retrieved from URL https://givealittle.co.nz/cause/support-the-victims-family-of-the-botany-downs-car