1.1 Choice of Crowdfunding Platform
- Decide on the best platform to host the campaign.
- Establish a good working relationship and product brief with the supplier.
- Set deadlines for key deliverables and launch.
- If needed, can the platform support payments globally?
- If needed, can the platform process tax-efficient donations in the US and UK?
- How do the offline and online payment flows work?
- If needed, can the platform host multi-lingual campaigns?
- Can offline donations be added to a campaign in real time?
- Can matched funding be added to a campaign? If so, is this in real time?
- Can the donation flow collect the required data from donors, and will this data be yours to use afterwards?
- Can the platform export the required data in a CRM-ready format?
- Is the technology robust enough to support a significant campaign?
- Will the platform help generate positive public awareness of the campaign?
There is normally a reasonably simple decision to make. There are two types of platform that can support nonprofit campaigns. On the one hand, you have the well-known “monolithic” platforms such as Kickstarter, IndieGoGo, Crowdfunder or JustGiving. On the other is a whitelabel / own-brand platform such as Hubbub (or everydayhero, ScaleFunder, Community Funded, etc).
The benefits of the former (e.g. Kickstarter) are often listed as high donor trust, the potential for more traffic, and the low setup costs. The reality though is that almost all of the initial backing for campaigns comes from your own friends, family and existing networks (so trust is unlikely to be a problem). Your campaign is also very unlikely to be one of Kickstarter’s priorities unless it has already achieved massive scale (since they only make money on commission, they need their promoted projects to raise an awful lot).
It is true, however, that the setup costs are low using a “monolithic” provider.
The benefits of the latter (e.g. Hubbub) are much greater customization and control, including of data / stewardship and branding. The most important element here is typically ownership and control of the relationships and data you secure from your campaign. It is important to see the crowdfunding campaign as just the first step on your supporter journey - and to really maximize this long-term relationship, you need to have ownership of the data, and consent to use it. This can only really be achieved by using a whitelabel or own-brand solution.
Example - payment flows:
For most nonprofits, it is also of critical importance to formalize the flows for both online and offline payments and have these flows approved by your financial teams. Some payments may be made “offline” - e.g. by cheque, or pledges made over the phone. There needs to be a formally signed-off set of accepted payment flows that guarantee that:
- the correct data is collected.
- the money ends up in the right place.
- there is clear responsibility for the processing (e.g. this must be someone’s job).
- tax efficient giving status is not compromised.
- the gift is properly represented and included in the campaign total on the platform.
It’s common for platforms to ask you to pay commission on donations or pledges made outside the platform, if you want that donation reflected on the campaign. This can present you with a real problem. It’s not uncommon for larger donors to wish to give amounts of over $1k other than via a website. You’ll clearly want to represent these larger sums on the campaign, to take you closer to the target, but you won’t want to give up 5% or more of the gift in order to do so. Some platforms do not allow you to add pledges received offline at all, whether you pay commission or not.
Given the complexity of nonprofit demands and the interface between donor relations, marketing, stewardship, data, payment flows and tax efficient giving, our recommendation for most larger ($100k+) campaigns is to use a whitelabel provider. If you have a lot of time (at least six months) to try to negotiate with Kickstarter or another platform to get their agreement to back you, or if you are running a smaller (<$50k) campaign, you may be able to justify using one of the monolithic providers as their up-front costs can be cheaper than using a whitelabel solution.
If you look through the kinds of questions nonprofits often need to ask when it comes to crowdfunding (in the Key Questions above), it gets tricky to use the monolithic platforms, as they often fall over on things such as GiftAid, reporting, data, stewardship, etc. Therefore the decision the team needs to make is to balance the opportunity for additional promotion against the downsides of not being able to add in offline donations, matchfunding, additional payment flow customization, etc.
Either way, whoever you go with you should work out the answers to all of the questions above in advance, alongside any fees that will be incurred, and decide which platform works best for you. The key thing to remember is that platforms do not bring donors, you do, so it’s very important not to attribute too much weight to the potential “network” or “crowd” of the major platforms.
- Write up a specification for the platform requirements, detailing what is essential, and what is desired - draw on the Key Questions above.
- Approach suppliers for a quote on the specification, or responses to the questions you’ve raised.
- Decide on a preferred supplier and commence work on your campaign.
- We are happy to provide further assistance with a detailed specification on request, and can also introduce you to suppliers if necessary.