Reaching a broader audience and expanding your donor network should always be on a not-for-profits radar. Crowdfunding is growing in popularity by the day as more organisations are exploring this powerful avenue to raise funds that would otherwise be left untapped. It’s all about tapping into a community of people that are willing to contribute funds that resonate with your venture. Here are 5 reasons to use crowdfunding to fundraise.

Reason 1: Cost effective

Fundraising can be difficult and often the return on investment can be less than desirable, especially when you have high overhead costs to cover like special events, individual donor appeals, direct mail and the cost of in-house fundraising staff. It can keep not-for-profits feeling like they are constantly trying to do more with less. Crowdfunding can be a cost effective way to raise finances with no upfront fees. As it is performance based in contrast to more traditional fundraising methods, an organisation will only pay from its surplus when it uses the crowdfunding route.

Reason 2: Untapped audience

The key to successful fundraising is reaching your targeted audience which can be buried in all sorts of places. This requires relying on multiple mediums like social media, affiliate marketing and partnering with organisations with separate email lists to your own. Crowdfunding also gives you a platform to sharpen your messaging through video and a compelling landing page. There are all sorts of people online that are looking to make an impact, contribute to social change and help solve huge problems. Your crowdfunding campaign when developed with the target audience in mind, can attract an untapped ‘crowd’ that have the potential to become deeply engaged and committed donors to your organisation.

Reason 3: Bottom-up approach

While many organisations rely on a few big donors, the approach used with crowdfunding is about spreading your net far and wide, and obtaining your financial target through many people making small donations over the course of the campaign, Where the financial ask is considered achievable through dividing your financial objective into multiples, your audience can be less intimidated to contribute. As an example, consider the difference of asking for donations of $1000 versus seeking out 10 people to donate $100 or 20 people $50? Some ideas may not appeal to conventional investors but can often be more easily financed through crowdfunding.

Reason 4: Viral exposure

Unlike other forms of fundraising, when donors contribute to a crowdfunding campaign, they can quickly demonstrate their support for a project through sharing on social media. This gives instant exposure to your cause and makes pitching for funds much easier, as your supporters do the leg work for you in getting the word out. There are examples in recent years where crowdfunding campaigns have proved substantially more effective than more traditional forms of fundraising in marketing a cause. Remember the ALS Ice Bucket Challenge that took over social media feeds in 2014? Scores of celebrities including Bill Gates, Oprah Winfrey and Steven Spielberg shared videos of pouring a bucket of ice over their heads before passing on the challenge on in the name of Amyotrophic Lateral Sclerosis (ALS) or Lou Gehrig’s disease. More than 17 million people uploaded videos on Facebook alone, resulting in 440 million views. After going viral, the campaign raised US$115 million over July- August compared to US$32,000 over the same period the previous year.

Reason 5: Working on innovative projects

There might be projects you have been wanting to do for a while but have had a hard time getting off the ground. To test public reaction to your novel product or idea, it’s a low-cost probe option to crowdfund. Once your idea is shared, you can often get useful feedback and expert guidance from the crowd on how to improve your proposal (if it indeed needs modifying!) If you reach your financial target easily this is a good indicator that your idea could work well in the market and that potential exists of raising further funds down the track. Moreover, your early donors may be interested in partnering with you and becoming major sponsors of your project, helping to ease any financial pressure from trying new things with your organisation without the financial backing.