crowdfunding

In yesterday’s post we looked at the pros of crowdfunding but we can’t stop there.  You can’t make an informed decision if you only hear the good side of the argument. Today we’re going to show you some of the cons of crowdfunding.  These are things which might not stop you from using crowdfunding with your NFP, but they are aspects that you need to consider before making your final choice.

Let’s take a look.

Disadvantages of Crowdfunding

  • With so many groups now turning to crowdfunding, it can be easy for your message to get lost in the sea of other requests for help. To ensure your group raises all of the funds that you need, you may wish to only add crowdfunding as an additional tool to raise funds for your organisation rather than using it to replace all of the other ways that you ask for donations. 
  • While it costs less than traditional fund raising efforts, a crowdfunding campaign will still take considerable planning in order to be a success.   
  • NFPs also need to be careful about the image that is projected in their new crowdfunding efforts, and ensure that the organisation is prepared to handle additional inquiries and requests for information that might be generated.  Care must be made that posts and replies on the group’s social media accounts maintain the image that you wish to project for your NPO. 
  • Crowdfunding isn’t always the best solution if your organisation needs large sums of money for funding. If your group needs millions of dollars to achieve its goals, more traditional fund raising techniques, such as charity balls and auctions, as well as direct mail and marketing appeals may still remain more successful. 
  • Depending on the amounts that your group raises through its crowdfunding efforts, your NFP might then have additional legal responsibilities and new financial reporting requirements.  Board members should generally seek legal and reporting advice to ensure that all of their fundraising efforts meet government rules and requirements. 

Now that you know a bit more about the pros and cons of crowdfunding do you think this a fundraising tool that your NFP will turn to in the future? Why not let us your experiences with crowdfunding in our comments section below?