Reader Survey: What is Crowdfunding and How Do You Use It?
Crowdfunding has become an intensely popular method for small entrepreneurs to raise the funds necessary to make their ideas for products a reality. The for-profit sector has seen some tremendous crowdfunding wins in recent months; most notably, a campaign to resurrect popular children’s TV show Reading Rainbow has raised nearly $3.5 million dollars
from more than 76,000 backers.
But how does crowdfunding work in the nonprofit sector? Nonprofit crowdfunding projects do not generally result in a purchasable product, and donors are not the direct beneficiaries of their donations. This contrasts with for-profit crowdfunding initiatives, in which funders are often giving money to the creation of a specific, consumer-facing product that they can later buy, or purchasing an equity interest in a start-up. As a result, there is less clarity in the nonprofit sector as to what, exactly, constitutes “crowdfunding,” how it differs from online fundraising, and how organizations can capitalize on crowdfunding’s current popularity to drive fundraising efforts.
We’re curious to know what you and your organization think about crowdfunding, and whether you’re actively seeking to leverage it in your fundraising efforts. Take our reader survey below and let us know what you think! We’ll reveal the results in a follow-up post in coming weeks.