As many in the nonprofit sector know, fundraising can be difficult. Online crowdfunding campaigns are a new and effective way for those in the sector to approach this problem. One type of crowdfunding that has taken off all around the world is rewards-based crowdfunding. This works by first having the nonprofit post a project on a relevant platform such as FundRazr and Kickstarter. A multimedia promotion will ask for financial help and in return for support, donators will receive various rewards depending on their investment. Rewards-based crowdfunding means that the project will offer rewards, usually modest, to the individuals to donate. These rewards are usually tiered; so the more you donate the greater (and often more personal) the reward.
There are generally two types of rewards-based crowdfunding campaigns. The Keep-It-All (KIA) approach in which a goal it set and whatever is pledged to the cause by the end of the time is kept by the nonprofit. The second type is All-or-Nothing (AON), which is an increasingly popular approach in which a financial goal and time limit are predetermined and if the goal is not met, nothing is received, and then all donators are refunded. These campaigns generally have larger goals and more often reach their goals - doing so by play on the excitement of the AON situation.
Rewards-based crowdfunding works well for nonprofits not only because it is relatively cost effective, but also because in and of itself it becomes a form of marketing. Any rewards or gifts that are given to donors become marketing tools.
So what constitutes a good reward?
Rewards have proven to be an effective way to motivate people to donate. Choosing the right reward however can often be tricky. For example, Nonprofits who offer services in very specific sectors may not be able to offer relevant rewards to those who donate. In this case it is the emotional appeal of the campaign, which will provide the primary incentive.
There are, however, a variety of rewards-based options to consider. Some examples of effective reward strategies for product-based providers include pre-orders and limited edition items. For service-based providers this may include giving free consultations, personal thank you and discounts. Any campaign can make use of project-related items such as t-shirts and hats; these also work as marketing tools.
Rewards-based crowdfunding is a great way to fundraise for your nonprofit, start a campaign today and get in while the trend is still popular and in its relative infancy.
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Digital Impact Agency is a creative firm specializing in interactive media and inbound marketing strategies for manufacturing and technology companies, professional service firms (architectural, engineering, construction, legal and consulting), nonprofits and enterprise companies. We are a team of innovative entrepreneurs focused on creating the most strategic and effective communication channels for our clients.