What nonprofits can learn from the success of GoFundMe and other crowdfunding platforms

In a little more than a decade, GoFundMe has grown into a household name that’s helped raise more than $10 billion from more than 150 million donations.

That growth shows that the platform is remarkably effective at helping raise money. For example, within the first six months of the pandemic, the platform helped raise more than $625 million from more than 9 million donations for people, causes, and charities affected by the pandemic. That translates to an average gift of $69.44, which is roughly in line with charity benchmarks for other online giving.
GoFundMe—and other crowdfunding sites—have also attracted a donor base that tend to be younger than the average nonprofit’s donors.

While that’s enabling them to grow the “philanthropic pie,” they may lead to future issues as most nonprofits’ online and offline donors tend to be significantly older than the majority of GoFundMe donors—roughly half of whom are 25 to 44 years old. After all, will the donors who use GoFundMe (and other crowdfunding sites) shift their giving to nonprofits as they age, or will they continue to focus their giving on crowdfunding sites, and the platforms that will evolve from them?

Perhaps crowdfunding donors might shift their giving if nonprofits adopt some of the tactics that have driven donors to crowdfunding sites. They can start by learning from a few of crowdfunding sites’ most important insights:

1. Stories matter—people are far more likely to give when they understand how their gift will be used.
2. Simple is better—a simple, easy to use interface with minimal data requirements removes friction that can prevent someone from giving.
3. Test, test, test—one overarching platform that allows for continuous testing of variables such as button design and size, colors, placement of elements like images and copy.
4. Address common donor concerns—GoFundMe in 2016 introduced the GoFundMe Guarantee, which offers donors a refund if their gift is misused.

By learning from, and borrowing from, these platforms, nonprofits can breathe new life into their online fundraising efforts.

Tell stories

At its core, the GoFundMe platform is built around a key insight: People are more likely to give when they identify, and understand, who or what will be impacted by their gift. As human beings, we appear to be hardwired to wish to help one person rather than many.

That’s why the GoFundMe platform encourages fundraisers to focus on their story behind their campaign, starting with the title that they use. “Make it short, descriptive, inspiring, and easy-to-find when people search online,” GoFundMe’s tips suggest, adding “If appropriate, also make it funny and personable.”

When it comes to the story itself, GoFundMe suggests fundraisers make their pitch “easy to skim,” to paint a personal and compelling picture that answers the basic questions that a donor might want to know, such as who the fundraiser is for, what happened, and how the funds will be used. Successful GoFundMe fundraisers are encouraged to take the extra step to read their story aloud to help them consider whether it will inspire empathy and compel someone to give. These are all classic pieces of advice that direct mail experts have been giving to clients for decades.

Some institutions have already taken note of this lesson on their crowdfunding pages. For example, University of Texas at Austin’s Horn Raiser page offers a wealth of content for donors to find a funds or initiative that interests them. The Daily Texan, the university’s student newspaper, is using its page to share how the COVID-19 pandemic turned its “world upside down” – halting daily print production for the first time since 1918. Since then it has bounced back by resuming printing its paper once a week, while also producing and distributing digital issues online, and daily content. To help it continue to serve its community, it is looking to raise the very specific sum of $6,700 to purchase more equipment and subscribe to crucial services.

The lesson: A good story—regardless of whether it is on a university website or a crowdfunding site—puts a face with a cause and, in doing so, generates a positive feeling among donors.

Make it simple

One of the crucial developments that helped Amazon.com emerge as the dominate online retailer was a relatively simple innovation. It stemmed from its realization that shoppers don’t want to waste time typing in their information every time they make a purchase online.

In 1999, Amazon rolled out a solution to the problem: a 1-Click button. The idea was that a consumer could enter his or her billing, shipping, and payment information one time and the retailer would store the information. After that initial purchase, he or she could simply click a button to buy something.
GoFundMe has implemented the equivalent of Amazon’s 1-Click. while many nonprofits require donors to fill out a lot of information, GoFundMe keeps it simple. Donors can click the Donate Now button, enter the donation amount and confirm their payment details. If they want, they can leave a comment with their donation. Then they’re immediately sent a confirmation receipt after the donation has been processed.

The lesson: Simple is better. Nonprofits would be wise to evaluate whether every piece of information that they’re asking for is absolutely necessary.

Adopt an experimental mindset

GoFundMe’s growth has been near-exponential: It took five years to raise the first $1 billion on its platform, nine months for the second billion, and just seven months for the third.

The platform’s simple approach stems from its experimental culture in which it tests what drives donors to give. The results of those ever-evolving efforts are: easy to create giving pages that feature bold headlines, customizable pictures and videos, easily adjustable goal trackers, and a big, bold donate button. It has also found ways to make campaigns easily shareable across other social networks, where customizable hashtags can help them gain traction.

Getting people to share a fundraiser is extremely important. For every share a fundraiser receives, it receives at least one to two more donations. And fundraisers shared on social media raise up to three times more than other fundraisers. It leverages social proof by noting how many “just” people gave a donation—emphasizes that the fundraiser is receiving support.

The lesson: Nonprofits would be wise to adapt a similar testing-first mentality throughout all of the work. Many do take that approach. The top nonprofits (and other companies) are constantly testing various aspects of their public-facing operations—from the copy on their fundraising pages to the color and size of the donate buttons to see what receives the best results.

If you aren’t testing already, now’s the time to start. You can start small by conducting a limited test. That might be testing two different versions of a landing page to see which does a better job converting visitors to donors. Then, keep testing changes until you gather consistent results. It’s important to remember that testing doesn’t have an endpoint, it’s an ongoing process.

Be courageous

GoFundMe offers a simple form for donors to receive their money back if their funds are misused. While the concept is familiar—consumers expect a moneyback guarantee from (generous) retailers, they don’t often encounter with nonprofits, which is why the GoFundMe guarantee stands out. But why not?
One of the key issues that keeps donors from donating is that they are not sure if their money will be well used. GoFundMe’s guarantee relieves them of that concern.

It takes courage to implement something like this guarantee. A few years ago I saw a major charity show off its revolutionary (for the time) new mobile app at an industry conference. For the development team, one of the obvious uses for the app would have been to make it simple for donors to manage their monthly gifts. But it didn’t end up rolling out that element because it was worried donors would cancel their gifts. The reality is that for every donor who reduced or stopped his or her monthly gift another might have increased his or her gift. However, the charity’s leadership wasn’t willing to bet on donors being generous.

The lesson: It takes courage to upend the standard ways of operating but doing so—or attempting to do so—is the only way to drive significant change.

If you need assistance looking for innovative ways to bolster your online fundraising please contact Adrian at asalmon@grenzglier.com.