Thanks to intelligence and the internet, people can donate money to see other people's dreams come true. With social media networks and fundraising websites, charities are able to spread their message more easily and reach a larger group of donors from around the world. In addition, crowdfunding (collecting donations from people by asking for small amounts of money) allows people to donate money to a cause, but also to a creative project or start-up business. With dozens of sites available to help raise donations, it's up to you to choose the one that best fits your needs and then develop a campaign that will help you achieve your fundraising goals.
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Method 1 of 4: Planning a Campaign
Step 1. Determine if crowdfunding is the best option for you
Before embarking on an online fundraising campaign, you should consider why choosing this option to collect donations over traditional means, such as a local fundraising event, a charity dinner, or requesting a loan from a family or bank for a business. Think about the pros and cons of crowdfunding when it comes to your project.
- Crowdfunding requires setting up a convincing online campaign that invites a large number of small donors to donate money to a project. In return, these donors receive a product, ownership of assets in the business, or in some cases, a small gift in appreciation of their donation.
- Crowdfunding can be a very effective way of seeking donations. You can reach large potential investors or donors, thus avoiding the hassle of trying to convince large investors or banks to get a loan. It also gives the donor or customer a feeling of attachment, so they can donate again to fundraisers in the future.
- However, crowdfunding also requires you to tell a story that will appeal to donors. If you can't come up with a compelling reason to invest in a few short paragraphs and a video, you're likely not getting a lot of contributors.
- In addition, donors also expect to see progress or products, in return for their contribution. If you miscalculate your budget or fail to use it, you run the risk of being sued.
- Lastly, there are certain benefits to the typical type of investor search, especially for businesses. Start-ups get knowledge and guidance from early investors and institutional investors in starting and running their businesses. Crowdfunding businesses don't have this advantage.
Step 2. Start an official project
People don't usually like to make donations to "ordinary foundations," so set goals that you want to achieve. Describe your project as specifically as possible. Your project could be a charity, new product launch, or creative project. Be specific about what you hope to achieve and what the end result will be. Above all, be sure to have a clear message encouraging donors to give their money.
For example, don't just tell people that you're collecting donations to feed the homeless in your town and ask for donations. Instead, start by explaining the need for the campaign. How many homeless people are there in your city? How many are short of food? Then, explain in detail what you will do to solve the problem and how. Be specific about the money to be used. How much will the food cost? And for how long?
Step 3. Include the amount of money
Tell people how much money you want to raise. Make sure to collect as much money as you really need. If it's more than needed, your goal will be difficult to achieve and if it's less, it can make it difficult for you to get more mid-project. Try to divide the project into parts and estimate how much each part will cost. Add them all up and leave a little (about 10 percent) for backup. As a business, you should try to fund only one project (such as one product) with crowdfunding.
- Try suggesting a donation amount. However, don't demand a certain amount of money from everyone. Instead, use a phrase like, “If everyone gives IDR 250,000 we will be able to buy a bed for the elderly in March”.
- Crowdfunding websites often make this easy by specifying a minimum donation amount or even requiring you to set an amount.
Step 4. Decide whether you will offer gifts to donors
If you're setting up a charity, one way to encourage people to donate is to give items to anyone who has donated. This gift doesn't have to be expensive, it can be in the form of a t-shirt or sticker if the donor gives more than a certain amount. Donors can get tiered prizes, such as T-shirts for donations over IDR 300,000 but something more will be given if donating more than IDR 1,000,000.
Another option is to offer what are known as impact-driven rewards. These are rewards created as a result of borrower financing, for example hats knitted by indigenous people who are assisted in the campaign or letters from children fed by the project. This type of reward has been shown to increase donations
Method 2 of 4: Selecting a Platform
Step 1. Start creating a PayPal account
PayPal is a good choice for running a simple donation campaign. The PayPal payment button can be easily added to a website or blog and used to accept donations from anyone. This service allows people to donate to nonprofits or individuals via an email address.
PayPal charges a fee for each transaction. Donations received or sales within the United States are subject to a 2.9 percent fee plus a transaction fee of approximately US$0. 3. Eligible nonprofits may be eligible for a reduced fee of up to 2.2 percent and US$0.3 per transaction
Step 2. Study popular crowdfunding websites
The most used sites are Kickstarter, Indiegogo, RocketHub, and Quirky. These websites handle a large number of crowdfunding campaigns. For example, more than IDR 12 trillion has been pledged for the Kickstarter project. With these websites, you can use the name of the website to borrow credibility for your campaign.
- Projects for websites, businesses that have physical buildings, music albums, books and inventions are the most frequently announced on these websites.
- Donors can search by location, project type, and project popularity.
- Be sure to study the terms of each crowdfunding site and the services offered. For example, some sites will help you create compelling campaigns, while others won't. Some will set a fee based on your income, while others will set a flat fee. At the end of the day, some will not give you any money unless you successfully reach your initial donation goal, while others will allow you to have the money raised successfully.
- Pay attention to the requirements before creating an account on a website and consider what website requirements are best for your project. For example, Kickstarter is the best website for creative projects, such as art installations or new products, but not for crowdfunding businesses or charities. In contrast, Indiegogo is more general and can be used for almost any purpose (except for equity crowdfunding/online investment offerings).
Step 3. Consider a crowdfunding website specifically for nonprofits
If you're raising money for education, consider using a website that focuses on this type of fundraising, such as DonorsChoose. This website is specifically for teachers and educators seeking to fund classroom projects. Projects that are less than US$400 have the best chance of being funded.
Compare this to the Causes website or Givlet if you have a nonprofit with no promotional funds. Both of these websites charge a fee of at least per transaction and do not charge a monthly fee
Step 4. Use a crowdfunding website specifically for startups to raise capital
If you have a small business that wants to raise donations for startup capital online, you can use certain startup websites, such as Crowdfunder, Somolend, or Invested.in. Somolend is a debt-based system, not a donor-based system, so you may qualify for a loan to start a business.
Step 5. Study crowdfunding websites specifically for app creation
Check out the appbackr website if you have an idea for an app and want to make it happen. This is a dedicated website for smartphone application creation.
Step 6. Learn about crowdfunding sites that offer comprehensive marketing
Compare Crowdrise, DonateNow, Givezooks, Qgiv, or StayClassy websites if you want a fundraising tool with social media, websites and other tools. If you don't have a socialization division and have enough funds to pay the monthly fees, this may be a better option.
For nonprofits that make most of their money locally, the monthly fees may not match the institution's revenue
Method 3 of 4: Running a Charity Fundraising Campaign Online
Step 1. Set a deadline
Not only do most crowdfunding websites require it, but deadlines also encourage people to donate. As the deadline draws near, people will feel enthusiastic about meeting a goal. You can also make deadlines more convincing by explaining that your project needs to be done by the deadline for some reason or to get a certain result.
Step 2. Form the main contributor group
To get your project started and reach a larger number of donors, you'll need to bring together people you know to act as promoters and early donors. They can share your movement link on social media and announce their own donation. This is important because people are more likely to donate when they see someone else already donating.
Step 3. Use behavioral marketing on Google, Bing, and Facebook
If this is a local project, use a zip code to target donors. Otherwise, you can place targeted ads on these websites using keywords related to the charity. That way, when users search for similar things, they'll see a link to your fundraising page.
Step 4. Include a donation link on any means
Include links at the top of website pages, Facebook and other social media accounts, email signatures, and printed information.
Step 5. Try a new channel if your current methods are not getting people to your crowdfunding website
Create partnerships and ask your partners to send emails and requests online. Ask key contributor groups to link on as many social media as possible.
Step 6. Follow up
Keep your reputation intact by reporting donations, giving gifts, and sending "Thank You" letters. You can also thank donors by saying so directly on their social media pages, including them on a public donor list, thanking them personally in a donor appreciation video, or any other creative or meaningful way you can think of.
Method 4 of 4: Collecting Donations for Product Launches
Step 1. Market your product into specific groups
To be successful, your product must be targeted to a specific customer group, perhaps people who enjoy a particular hobby or work in a particular field. Identify who these people are and tailor your campaign to them.
Step 2. Show stories about your product development
The most successful crowdfunding campaigns include videos showing exactly where the product idea came from, how it was developed, and who created it. In other words, contributors need a story in addition to a great product. However, you should also make sure to quickly introduce the product and what exactly it looks like so you don't lose the attention of your potential donors. You can include a more extensive version of the information in the video, complete with diagrams and images, in addition to the fundraising page.
Step 3. Create interest in the product
Contact relevant blogs, websites, or magazines that may be interested in showing your product to their readers and see if you can get articles published with the product. Be sure to explain how your product relates to the specialty of these media and describe exactly what the product is and how it is used.
Step 4. Create a donor reward system
You have to offer different amounts as well as different types of products or rewards in exchange for their donations. It can be used in various ways. For example, you might choose to create a limited, early reward that offers the final product at an earlier/lower price date than the actual product launch. You can also offer high or low rewards, such as stickers or special thanks to donors who don't donate enough to get products and trips to your business headquarters or customized products for donors who give above and beyond the standard amount.
Step 5. Update your project progress information to donors
Keep donors informed of any progress or setbacks you experienced during and after funding. It's important to let donors know that their money is actually being used for what they're giving away. Make regular reports through your crowdfunding platform and make sure they are published on the fundraising page.