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Erin AltmanSenior AuditorRINA

Ready to Launch: Online Fundraising Tool

One of the many challenges facing small and mid-sized nonprofit organizations is the need to minimize fundraising costs. Larger organizations hold large-scale events (i.e. sizeable galas, charitable auctions) or invest in ten-thousand piece direct-mail campaigns. However, smaller organizations rely on low-cost fundraising concepts to ensure their programs remain funded and strong.

An effective, low-budget method your nonprofit organization can utilize to raise money is online fundraising. Online fundraising has the unique opportunity of benefitting your organization because it allows donors a direct route to donate quickly, easily, and securely. With online fundraising, nonprofit organizations are able to connect to a powerful database of donors regardless of location or time-zone, fundraise more cost-effectively, capture more donor statistics, and increase visibility and awareness. This form of fundraising often involves the utilization of an online donation page, along with other methods such as crowdfunding and mobile giving. One additional innovative idea that has proven effective is for nonprofit staff and Board member emails to include a “Donate Now” call-to-action button in the signature line.

Currently, crowdfunding is the most popular online fundraising tool used by all, nonprofit and otherwise. Crowdfunding's greatest asset is its ability to make the donor feel like they are having a positive impact on a cause they firmly believe in. A crowdfunding campaign allows people to financially support a project they have a genuine interest in. It allows them to feel a part of the process in making someone else’s vision a reality.

Crowdfunding can be a great option for some campaigns, but it may not be ideal for all of them. There are key features in online platforms that nonprofit organizations need to consider before launching a crowdfunding campaign. Some platforms are tailored for creative projects, while others can be tailored directly around the fundraising needs of your nonprofit organization. In addition, some platforms will charge varying fees, while others won’t charge a fee at all, but then won’t allow the sponsoring nonprofit to collect donations unless they reach their target amount. Crowdfunding can present various elements of risk.

An important concept nonprofit organizations should be prepared to address when running crowdfunding campaigns is that not all crowdfunding donations are tax deductible. The only tax deductible crowdfunding donations are those where the beneficiary is a 501(c)(3) organization eligible to receive tax-deductible charitable contributions. Crowdfunding donations to beneficiaries without the 501(c)(3) status are considered personal gifts instead of tax-exempt donations. This element of uncertainty in crowdfunding can cause ambiguity around the crowdfunding campaign for your nonprofit organization.

A national day of charitable giving that started in 2012 the Tuesday after Thanksgiving, GivingTuesday, has proven to be a successful method of online fundraising. Giving Days work well because they create a sense of urgency and community. Supporters tend to rally together to raise as much money as possible in the 24-hour period. Donors see Giving Days as a natural and easy opportunity to give back to their communities. Typically, those who donate through Giving Day campaigns also have a higher interest in supporting nonprofit organizations during other times of the year. GivingTuesday has become a nationally recognized holiday, one that every nonprofit organization should be utilizing.

Text-to-donate is a newer yet effective way to accept donations through mobile giving. This technology, which you can read more about here,https://www.mobilecause.com/text-to-donate/, allows donors to give to nonprofits organizations directly through the text messaging app on their mobile devices. This way of mobile fundraising allows nonprofit organizations an effective technique to raise funds. In 2018, according to the Pew Research Center for Internet & Technology, roughly 95% of all Americans owned a cell phone, making text-to-donate a natural and organic fundraising technique.

AmazonSmile is a program launched by Amazon in 2013 that contains the same products, prices, and shopping features as Amazon.com. The main difference between the two sites is that AmazonSmile Foundation donates 0.5% of the purchase price of eligible AmazonSmile products to the charitable organization of the customer’s choice. Please visit https://smile.amazon.com for more details.

There are a number of additional creative and effective methods for nonprofit organizations to run both online and in-person fundraising campaigns. Listed here are ideas that have proven effective for others:

  • Virtual Road Race
  • Interactive Video Fundraising
  • Email Fundraising
  • Pinterest Boards
  • Facebook Fundraising
  • Virtual Bake Sale

Fundraising leaders, marketing sources, and a vast number of online blogs are claiming the importance and urgency for nonprofit organizations to elevate their digital presence to attract supporters. Presented in this article are a handful of online fundraising ideas to advance your nonprofit organization to success at an affordable cost.