Turning Crowdfunding Into a Growth Engine

Alongside support from the government, foundations, and major donors – nonprofits need small donors, those who give donations ranging from under 100 to several hundred shekels. These donors are very meaningful, because their combined donations add up to a serious sum that can constitute a significant part of the organization’s budget. 

If at one time most small donations were raised by campaigns in which volunteers knocked on doors, today the way to do this is through crowdfunding. Just as there are platforms that make this kind of fundraising possible for commercial purposes (for example, publication of a book), there are platforms similar in form and operation, like JGive, that make it possible for organizations to run donation campaigns. Anyone who has tried such a campaign knows that the digital technology tools make it possible to run larger, stronger and more meaningful campaigns than was previously possible.

The best time to fundraise is when you’re not under pressure

While the concept of crowdfunding has become popular fairly quickly, and many people currently view it as the natural and desirable way to donate, there are still many public perceptions about fundraising campaigns that we at JGive consider to be myths. For example: the idea that campaigns like this are only suitable for certain sectors, mainly the Haredi sector. In fact, the Israeli public in general are happy to donate and many citizens from all different sectors donate generously to campaigns. We recently celebrated a million donations on the JGive site. 

Another approach holds that a campaign should only be run when the organization is starting a specific project and lacks sufficient resources for it. In our view, rather than waiting for that point and then raising funds, it is preferable to raise funds early and be ready for the challenge when it comes. This also brings us to another myth that is common in the field: “Fundraising campaigns should only be conducted in emergencies.”

The most recent elections in Israel introduced the term “Gevald campaign” into our lexicon. Parties that were shown in polls not passing the threshold for entering the Knesset started campaigning on the message “vote for us – or else we won’t be here tomorrow.” This kind of “putting out fires” message is sometimes used in crowdfunding campaigns. Frequently organizations that are facing empty coffers are forced to conduct a “Gevald campaign” whose message is “if we do not raise a certain sum – we cannot continue our important relief work.” As with political parties, this mostly works for organizations – if only in the short term. In the long term it can cause life-threatening damage to the organization. 

Don’t raise money for “life support”

As an organization that provides a platform for crowdfunding campaigns, we at JGive clearly see the difference between a Gevald campaign and a campaign that is planned in advance, and the clear advantages of the latter. That’s why we also recommend looking at a crowdfunding campaign as a regular annual activity, one that is listed on the annual Gantt chart, allowing you to plan in advance, in an informed way, without pressure and panic. 

When the campaign is part of the annual Gantt chart, there is lots of time to plan in advance and formulate a strategy and tools to run it. It also positions the organization differently. A Gevald campaign is likely to convey the message that the organization does not know how to manage finances correctly and is constantly putting out fires, which can cause donors to think twice about whether to donate – partly out of fear that the organization won’t reach its goal and will close. 

A regular campaign is also less limited by time because its goal isn’t to raise funds that must be received immediately to be used as “life support,” but rather to raise funds for the long term. Turning the campaign into an annual routine, with a set goal, also makes it possible to have a learning curve: to see what works more and less well in each campaign year, and to internalize the lessons and implement the campaign more successfully next year. 

In addition, a regular campaign plays to two donor audiences: spontaneous and nonspontaneous. The spontaneous donors (about 70% of all donors) will encounter the online campaign and pull out their credit cards to take part. The unspontaneous donors will make their regular annual donation to the organization during the campaign season (by initiating action or through an automatic renewal). Removing the element of panic also gives the organization time to create different marketing messages for these different kinds of donors and thus to maximize potential participation. 

Create connections from a position of strength

Another advantage of a regular crowdfunding campaign is the connections that the organization makes during the campaign. The campaign can lead to media exposure and through this to public recognition. Such important connections are best made from a position of “we are here, making progress and we want you to help us reach new places” and not from a position of “if you don’t donate now, we will close!” This has substantial significance for image and branding. 

In the end, a correctly managed fundraising campaign tends to lead to excellent results, whether it is planned in advance or not. However, the issues noted above make clear that a planned campaign is preferable. If you are interested in consultation on the subject to understand how best to conduct your organization’s campaign – you are most welcome to reach out to us here.