The Goldie Company

Parley: November 2013 - Crowdfunding: One Tool in the Toolbox

Kickstarter and other crowdfunding sites may make it easier for donors to be just a click away from your cause, but does it encourage them to bookmark your organization?

When Vancouver-based Paul’s Club began serving its membership of people living with early-onset dementia, its organizers decided it could work only if they charged a small fee. A recreational day program, the social enterprise also chooses to accept members even if they can’t afford the fee.

“We made a decision that we’d never refuse anybody on financial grounds,” says Michael Levy, one of the three people running the organization. “But we need support to make sure everyone can come to Paul’s Club.”

In August 2012, Paul’s Club received a VanCity grant of $50,000 to get the organization up and running, but the team soon realized that it wasn’t enough to sustain the club’s activities. They had neither a fundraising strategy nor a grant writer, and they needed money. “One of our friends suggested crowdfunding,” says Levy. “We thought, ‘What do we have to lose?’”

Crowdfunding supports efforts initiated by people or organizations, allowing individuals to make small (or large) contributions toward a collective goal. While recent campaigns such as Gawker’s Rob Ford Crackstarter cast crowdfunding in a negative light, the approach remains wildly popular with some sets, including musicians and filmmakers, whose stories of successful, independent forays into fundraising can make crowdfunding seem like a tantalizing option for non-profits and charities.

Professional fundraisers, however, view services like Kickstarter and Indiegogo with a critical eye. “As a fundraiser, you always want to encourage as strong a relationship as possible with your base of support,” says Albert Brulé, who has 25 years of experience. “Somebody may respond in a spontaneous fashion to something online, but does it contribute to long-term support?”

We asked Levy to tell us about his crowdfunding experience. Here’s what he told us:

  • It makes it easier to make the ask. “It’s not easy asking people for money for any cause, but this option made it easier. Donors could choose to access the campaign online, and we didn’t have to personally ask anybody to contribute.”
  • The system was simple to use. Levy used GoFundMe, which, like several crowdfunding services, charges a small percentage of what is raised. “It’s pretty straightforward. Once you’re set up, you just share the information with as many people as you can.” Levy sent the link to the organization’s email list and asked friends to share it with their networks.
  • Response was quick. “We set a target we never expected to reach ($25,000) and raised over $7,500,” Levy says. “It was quick—within four weeks. Paul’s Club benefitted from a whole lot of people each putting in a small amount of money.”

While crowdfunding is useful for small organizations with stretched resources, Levy says the team recognizes it’s much like a one-hit wonder. The response was great, but he’s not sure Paul’s Club will try the same type of approach again—at least not right away.

“You’ve got to be careful going back to the same people,” he says. “We need to find other ways of raising funds. [Crowdfunding] is not a continuing opportunity, but we might look at it again when the timing is right.”

While he isn’t sure crowdfunding is here to stay, Brulé says it’s important not to discount online fundraising opportunities. “It’s one tool in the toolbox. Ultimately, you want to communicate in ways that resonate for donors—whatever you do, it should encourage relationships and sustainability.”