Crowdfunding is a proven way of raising money through the collective efforts of many people who believe in a common cause. The urge to give is a basic human sentiment. The increasing reach of the media aided by technology is spreading the good word on donation-based crowdfunding far and wide. In India, however, philanthropy has been in practice from ancient times and several religious places and educational institutes testify to collective donations. Furthermore, business families also contribute significantly towards charity, and several prominent industry leaders are known to fund major social and educational initiatives.
How is crowdfunding important?
Digital technology has made crowdfunding the most preferred fundraising option. As a result, thousands (of donors) know about the various initiatives creating more and more communities for future endeavors.
The ease of using an online crowdfunding platform prompts people to look to this option to meet the urgent demands of medical and other emergencies. In addition, nonprofit organizations use crowdfunding to help strengthen the social sector, supplementing the welfare schemes of the government.
What are the pros and cons of crowdfunding?
First, let us evaluate the process for better clarity. Before that, we must dispel our doubts on the legality of crowdfunding in India.
Crowdfunding is a perfectly legal way of raising money. There are guidelines formulated by SEBI with which online platforms have to comply. Therefore, you need not be hesitant about using a crowdfunding platform during an emergency.
Let us start with the pros:
- Convenience
You can set up a project quickly; it takes very little time; in a sudden medical emergency, or even when addressing a social cause, speed is the essence – things may go out of hand due to delay. It takes only a few steps to start your fundraiser campaign. You do not require a lengthy application process and multiple permissions to launch your fundraiser. Once your programme is on, you can find out who your donors are and watch your funds grow in real-time. The funds, too, get transferred to your account immediately.
- Monitoring is easy
You get to know exactly how much money is received and from whom, in real-time. So, in case of slow progress, you can re-work your strategy and pitch the fundraiser better.
- Building up your community
For a nonprofit, the community is the biggest strength; people donating within the community often identify themselves as partners in the respective projects; when working towards a common goal, donors share the same passion and feel like active contributors to the projects. There are several instances of a donor bringing in another donor. More extensive the community, it becomes easy for organizations to raise funds.
- Builds confidence of your supporters
Online Crowdfunding allows confidence building of donors by sharing information on total collection and spending. Your supporters gain confidence in your organization when they know how the money was spent and the impact it created.
- Allows positive engagement
A large share of promotion (of the fundraiser programme) happens across social media; this permits donors to reach out to the fundraiser with comments and observations on the agenda. Both ways of communication help in building stronger relationships which in turn fortifies the community.
- Creates a captive market of donors
An increasing number of fundraisers and the emergence of more online platforms create a separate niche; with the cumulative promotion expanding the reach, more people are getting drawn into Crowdfunding. The increased focus and attention have already made several donors share their money regularly for a worthy cause.
- Low cost, more efficient
Digital platforms help lower the costs of running a fundraiser; compared to the traditional methods of connecting with donors and following up with them; Crowdfunding performs all the tasks digitally and precisely. Printed promotional materials, callouts, and several physical events in the traditional system add up to the cost of operation and eat up your promo budget. With online Crowdfunding, your cost of reaching a donor is meagre.
A few of the cons will be:
- Data safety
Among the primary concerns of donors is the threat to data safety. Despite assurances of multi-layer security, some donors view online crowdfunding platforms as susceptible to privacy issues.
- Strategy based
Although starting a fundraiser on an online platform is quick and easy, it is tough implementing a successful campaign; when the objective is to meet a time-specific fund goal, running a promotion requires marketing skills. If you outsource, the cost goes up, and if you do not have home talent, it isn’t easy to succeed.
- The market is getting crowded.
Crowdfunding is growing fast, with several platforms appearing on the scene often. However, choosing the best one for you may be difficult and may require considerable homework. With many advantages, Crowdfunding provides a quick solution to crucial donation issues. Let us find out how to begin.
Starting an online fundraiser campaign
Start by defining your objective and goal: The cause of your fundraiser campaign may be a medical, educational, or social emergency. It affects the targeted fund amount of your campaign and the planned period of your campaign.
Sign up your online platform partner: Do a comparative study of various platforms – Policy, payment handling, Customization, Professionalism, the Success rate of previous campaigns before choosing your online host. Then, submit necessary documents for validation. You are now ready to launch.
Work on your campaign strategy: Finalize your communication plan and channels.
Monitor progress: If required, do a course correction on strategy.
Share your story with the community: Make the best use of social media to take advantage of the digital capabilities for faster communication.
Withdraw Funds: Use it only for the announced cause, express gratitude, and thank your donors at the close of the fundraising period.
Crowdfunding is among the best ways to fund a personal medical crisis or tackle a social issue. There are a few disadvantages, though, but every process has some. However, when you focus on the advantages and work on your strategy, the cons appear insignificant, and you reach your goal easily.
If you need to start a fundraiser or wish to be a contributor, you have to keep the pros and cons of Crowdfunding aside and contact Ketto, the pioneer online platform in South East Asia trusted by thousands like you and me for effective fundraising campaigns.
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