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CROWD FUNDING AS A GROWTH STRATEGY FOR STARTUP NONPROFITS

When Hilltop Consultants decided to look into ways to raise funds for Operation Hunger, we were excited to look into crowdfunding as a way to build the foundational financial resources for this startup non-profit. From our prior consulting projects, we knew that crowdfunding could be an effective strategy for mid-sized non-profits that had already established a strong brand name and group of loyal supporters. However, we believed that with the right strategy and thoughtful implementation plan, we could make crowdfunding work for an early-stage non-profit like Operation Hunger.

 

 

 

 

Crowdfunding Challenges: No Name and No Supporters

 

The crowdfunding sphere is a very competitive one because of the low barrier to entry in the market as almost anyone can start a crowdfunding campaign with the click of a button on many popular online platforms. Today, there are over 1 million crowdfunding campaigns that compete for potential donors’ attention and money! For a startup non-profit, the biggest challenge is standing out in this space and competing with larger and more well-known organizations for crowdfunding dollars. What’s also difficult for early-stage non-profits, those without committed donors, is accomplishing the threshold of reaching 20% of your crowdfunding goal quickly, an important threshold for achieving legitimacy with new donors. Ultimately, the lack of brand recognition and difficulty of generating that initial buzz are major obstacles that an early-stage non-profit must overcome to execute crowdfunding successfully.

 

Strategy: Targeting Influential Champions

 

In order to give Operation Hunger its best shot at crowdfunding, we had to think out-of-the-box in order to address the obstacles it faced. Since Operation Hunger did not have established donors already, we looked to target influential people who would champion Operation Hunger’s cause and help build the initial buzz it needed. Because Operation Hunger was starting at a grassroots level in DC, we first looked to local leaders that naturally would support Operation Hunger and attract people that would feel invested in its cause. Operation Hunger was already working with powerful professionals including lawyers and accountants in DC, so we wanted to target these people who could use their connections to draw attention to the non-profit. In looking at the founder’s football background, we also identified famous coaches and players who could tap into their social networks to help support the crowdfunding campaign. With these influential champions, Operation Hunger could overcome the limitations that it faces as an early-stage non-profit.

 

Integration with Overall Fundraising: Project-Based Campaigns

 

In our work with Operation Hunger, we also wanted to make sure to integrate crowdfunding as a revenue generator seamlessly with other fundraising campaigns. During our research, we discovered that crowdfunding was far more effective when focused a specific program that had a clear end goal for which donors could see impact. For example, crowdfunding was far more effective in raising dollars to purchase new cooking equipment to kickstart a catering program compared to just raising funds to support Operation Hunger’s overall growth. Based off this insight, we proposed using crowdfunding to generate revenue for Operation Hunger’s expansion projects, while its other fundraising strategies would take care of general funds.

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LESSONS IN NONPROFIT AND STARTUP STRATEGY 

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February 26, 2017

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