Crowdfunding Green Nonprofits: A New Opportunity
In this article, I'll discuss crowdfunding green nonprofits.
Environmental sustainability – working and living within the planet’s ability to support today’s population and the coming generations – has reached into nearly every aspect of our lives in the United States. This is not surprising since sustainability is an ecosystem concept meaning any change affects many, many other parts within the ecosystem.
The complex web of connections means no action is isolated. To choose to recycle affects storage of the item, transportation to the recycling center, the recycling process and products, and the disposition of any waste and of the newly-produced item. Choosing not to recycle affects storage of the item, transportation to the dump, and the management of that dump over time. Both choices affect materials, waste, employment, transportation, fuel use, packaging, etc.
That connectedness has the advantage of bringing unlimited opportunities through collaborative projects, sub-projects, and spin-offs. You’re never done so there are more opportunities for funder matches. However, because sustainability practices are relatively new, and there are new products and new practices and new ways to combine them all, it can be hard to keep up with new information and to feel confident in designing green projects. The green choices just keep changing! How do you know when is the right time for which choice? The one thing you can count on is that good fundraising practices still apply.
As grant writers, these three themes (opportunity, change/choice, and good fundraising practice), all apply to our work raising the money to support sustainability projects. For 2013, the opportunity is crowdfunding; the change/choice part is government-supported incentives; and, the key good practice you need is relationship fundraising.
Crowdfunding uses online formats to attract supporters (a crowd of them) to specific projects (not general operating support) by capitalizing on networked social media users to spread the word and build engagement. There are crowdfunding platforms created as businesses (Kickstarter is the best-known) for use by individuals, businesses and nonprofits to raise money. Project leaders must follow the platform’s guidelines to submit a project, request support, try to raise it within a set time frame, and from people who may or may not already support you – but who do support your project’s intent.
You may want to support students learning media skills as they create a home-grown environmental documentary on a local issue; or you may need to buy a machine to help turn all your exhibit banners into salable tote bags; but you can’t just ask for money to support your sustainability plan because it doesn’t create a product. Remember, you will need to offer your supporters some token of reward in return. At a certain level, funders of your new sewing machine should get one of the first-production bags, for example. Take a look around the websites; you’ll get some great ideas.
Environmental sustainability works well with this new fundraising tool because:
- crowdfunding appeals to the age groups most likely to enjoy networked activities and to use online giving;
- the concept has more visibility and recognition than your institution does;
- there is always something new, and often something encouraging to explore which makes for unlimited opportunity;
- we have so much work to do and these projects can be repeated or expanded upon once you perfect your crowdfunding approach; and,
- third-party crowdfunding platforms can bring you new funders and new connections.
You can use a crowdfunding platform run by others such as Kickstarter and Indiegogo, or you can create your own. For any of these, you must determine a project, a campaign goal, and a timeframe. Then, you must pitch your project to the audience and manage the campaign.
Those are old skills we already value as part of the constancy of our fundraising work. Then, you must determine if you wish to outsource the promotion and financial management of the fundraising, or do it in house.
I recommend beginning with a simple, pilot project done with a platform run by others as a way to learn while raising money. After one or a few attempts, you can thoughtfully consider whether or not you are ready to pursue a crowdfunding campaign on your own using your own website and social media connections.
Earlier this year, I was delighted to see a historic preservation nonprofit fully-fund a $5,000 project on Kickstarter. This was the organization’s first crowdfunding experience and was one run by a volunteer. The rain garden project diverted storm water which threatened the masonry foundation (a serious preservation problem) and created attractive public spaces onsite while keeping storm water out of the city’s sewer system. Supporters received links for tax deductibility certificates.
The advantages of Kickstarter are that it works with international giving and recognizes nonprofit needs for tax deductibility, all at the same rate. However, they use the all-or-nothing approach of fixed pricing: you only get money if you reach your goal within your timeframe, and you pay an expected percentage on the money you raise. You also get to keep the money raised that is over the goal amount, of course.
Alternatively, Indiegogo addresses international approaches specifically and has a specific nonprofit fee. It also offers either flexible or fixed pricing – meaning you if you raise only some of your goal money by the end date, you can keep that money but you pay a higher percentage for the service. If the project meets its full goal or higher by the end date, then you pay a smaller percentage or choose to take the money and pay the lower fee.
If you handle your own crowdfunding initiative using your website and a promotional campaign of your own, you pay no fees to others and keep whatever money is raised. This requires a well-prepared campaign and a solid network for promotion since you won’t have access to the third-party platform’s network of followers.
For your first foray, choose a small project you would like to try but that didn’t quite get into the final budget. I recommend choosing one with generalized appeal and a strong green message. To design the campaign take advantage of the tutorials for the crowdfunding platforms and learn from successful projects. Then, you will need to plan your promotion carefully using Facebook, Twitter, and email. Take notes on the results and use them to plan the next one.
The good news is that there are incentives for green energy products and services available from the state and federal governments, as well as from utilities and businesses. The programs vary widely but generally tend to encourage you to replace light bulbs, invest in solar arrays, buy Energy Star appliances, add wind power, and more.
The bad news is that the options change frequently and it can be tough to keep up. Here’s what you should do. Create a monthly reminder to check the www.DSIREusa.org database for the updated incentives available in your region. And, if you have any questions about what you read, you should call your utility or your state energy office (whichever makes the most sense). Ask about specific details and whether or not your organization qualifies; and, you should take the opportunity to ask for tips on what new options may be coming. Remember, it’s to everyone’s advantage-even the utilities–if we reduce energy consumption. So, they really are trying to help you save energy.
Self-funding is another change/choice. Many of the first green changes you make will save you good money. For example, just turning down the thermostat in the winter saves you money. What are you going to do with it? Does it ease the bottom line or get reinvested in other good green work?
Either answer may be right. You simply have to make that choice each time. Really, it’s just capital and financial planning. For example, Phillips may offer you a significant discount on lamps (bulbs) when you replace an entire floor of lighting. Once you find the money to pay for the discounted lamps, what happens to the rest of the savings? Does a good percentage of that go into a revolving fund for other green initiative? I would hope so.
But this doesn’t always happen. I’ve seen organizations take all those savings and refuse to invest in continued savings that ensure long-term sustainability of green efforts. Such as waste!
Good Fundraising Practice: Relationship Fundraising
Whatever project you choose, and however you choose to fund it, using relationship-fundraising to bring people and projects together will remain a critical part of green funding. You’ll need to cultivate the green side of your current funders and attract new green supporters. The twist is that because ‘greenies’ tend to be passionate, participatory, and visionary, you may find that your relationships with them will be more collaborative than transactional.
You’ll need lots of green supporters because “going green” cannot be done all at once or all alone. There always seems to be lots of sustainability work to be done. So whether it’s conducting an energy audit, providing public programming, transforming your site into an environmental resource, or supporting changes on a global scale, there will always be a need that requires more funding dollars. I’ve found that to generate repeat support from green funders will require strong, engaging relationships. Fortunately, in my experience, the projects are so rewarding that they usually reinforce the relationships naturally.
Editor's note: Be sure to add your thoughts at the bottom of this article!
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