Crowdfunding is an approach of financing for a project or a venture by raising a small amount of money from a large group of people through the internet. There are three major players in modern-day crowdfunding: the project initiator who proposes the idea or a project to be funded, an individual or groups who support the idea, and a moderating system called "the platform" which brings the people together to launch the idea.
There are four different types of crowdfunding: reward crowdfunding, debt crowdfunding, equity-based crowdfunding and donation-based crowdfunding. Running alongside with reward crowdfunding donation-based crowdfunding is the second largest and most commonly used crowdfunding.
Donation-Based crowdfunding is tailored specifically for NGOs and charities that look for certain crowdfunding platform for their nonprofit efforts. A person, be it an individual or an NGO creates a campaign and spreads awareness about his cause using social media or any other form of marketing. A person who supports the cause is called a "donor" who can relate himself to the cause and donates towards the campaign. A donor is free to contribute as much as he likes. There is no such minimum or maximum amount to make a donation.
Convincing a donor to donate is the most challenging thing in donation-based crowdfunding when they are getting nothing in return. A fundraiser is a great opportunity to get potential donors to care enough about a cause to fund it. Explaining the problem in a fundraiser story with statistics and highlighting the solution are the key points that will change the whole scenario by inviting large donors for a cause.
The secret to run a successful fundraising campaign is to have a good idea and a network of supporters. A strong fundraising campaign is planned around SMART goals, meaning the goals that are specific, measurable, action-oriented, realistic and time-limited. As one plans online fundraising efforts, it is important to understand the four key principles which govern the NGOs development on the internet. Most of the money that one rises will be based on relationship-building through the website, social networks, emails,etc., so the first key is to build and strengthen the relationship with the donors. The second key factor is when we want people to spread the word about a campaign one needs to ask –specifically and concretely otherwise money won't roll. The third, trust. Establishing trust online is more difficult, but it can be done. And the good news is that so many non-profits are not effectively communicating trustworthiness online that when your organization does, it ends up being a huge advantage in your fundraising efforts. Trust is an issue – use it to your advantage. Finally, one of the biggest benefits to raising money online is that the fundraising messages you create, as well as your asks, can spread virally only if you design them to be "spreadable". The message should be emotionally compelling and easily understandable. Remember, the goal is to make the asking so compelling that people want to spread it to their friends as well. If your supporter can’t easily explain your message/ask, they won’t want to spread it.
Modern-day crowdfunding has allowed the people to support huge philanthropic projects thus knowing the importance of the cause and increase awareness to support such causes.
Reference
https://www.impactguru.com/blog/fundraising-101-a-complete-guide-to-raising-money-for-any-cause
https://s3.amazonaws.com/1onlinecampaign/Successful-Fundraising-Campaign.pdf