Definition of Donation Crowdfunding
“Donation crowdfunding is a means of raising funds for a cause, or a charitable endeavour, taking a small donation from lots of people.”
Donation crowdfunding is the most altruistic type of crowdfunding, as there is no tangible benefit for would-be backers other than a belief in the proposition or cause that they are contributing to.
That’s not to say that donation crowdfunding isn’t still a competitive business though, there are hundreds of campaigns on sites like Go Fund Me and Indiegogo, and some of the most successful have raised as much as $2 million.
How donation crowdfunding works?
Like equity and reward based crowdfunding, donation crowdfunding is all about pitching your proposition as well as you can and presenting it in the best possibly light. Campaigns usually centre around a goal that needs to be achieved – anything from surgery for a desperately ill child, to saving a dilapidated community building, and would-be backers are asked to donate a small sum each, with the aim of making the money add up to enough to fulfil the goal.
As there is no equity being offered and, usually, no rewards either, to be successful a proposition really has to centre on the story behind the campaign. For obvious reasons, campaigns involving children or medical needs are the most likely to resonate with potential donators, and it can be harder to get donations for propositions that do not have such a strong human interest angle.
Packaging your proposition to attract more donations
Although there are no rewards or equity on offer, very similar principles apply with donation crowd funding as with reward crowdfunding and equity crowdfunding. To be successful, you need a compelling story, you need to explain exactly what can be achieved with the funds and the impact that it will have afterwards.
At Access, we understand how to attract investment from any channel, and donation crowdfunding is no exception. We can advise you about how to pitch and package your proposition, as well as suggesting which crowdfunding finance site would be the most appropriate. We can also help you to negotiate the financial and compliance obligations around your crowdfunding campaign – even donation crowdfunding can attract quite hefty costs and varying rates of fees between sites.
Call us today on 03330 069 141 to find out how we can advise about your donation crowdfunding campaign and help you to reach your goal.