A definition, introduction and 101 for not-for-profits and charities
The traditional definition of crowdfunding goes something like this:
Crowdfunding is the process of funding a project online by collecting small amounts of money from a large volume of people
While there are a lot of flavours of crowdfunding the most important components are:
The problem with this definition is that it's misleading and makes people think that to access the crowd of funders out there, you just need to put your project online and do no work. That's why we came up with a better definition. One that reflects how you get to the crowdin crowdfunding.
Crowdfunding (verb): A marketing campaign targeted at people who love you... which if you do well, spreads from your friends to their friends and from them to the crowd
We like this definition of crowdfunding better, because it emphasises:
So if I'm marketing to people I already know, how is this different to emailing my list a link to my website?
While it might not be immediately obvious, how you run a direct email campaign and the experience donors get is totally different to a crowdfunding campaign. Here's three differences:
Ok, got it. So where does crowdfunding fit into the charity fundraising landscape?
So roughly speaking, you can split charity fundraising into two buckets:
Crowdfunding belongs squarely in the 'General Public Fundraising' bucket and in a non-profit, it's usually led by the same person/people who looks after other public fundraising campaigns.
While crowdfunding is heavily project focused, increasingly smart non-profits have found ways to running regular crowdfunding campaigns to fund their ongoing operational costs - but that's a whole other post.