Crowdfunding Has Buzz, But Is It Right for You?

"Crowdfunding" is one of 2013's nonprofit buzzwords, yet it's a money-raising method that isn't suited to every nonprofit. Crowdfunding, as distinct from ordinary, ongoing fundraising efforts, means getting lots of small donors to contribute to a one-time effort to raise money for a specific project -- which is only feasible if you can reach big numbers at a very low cost. And that means going online with a promotional pledge-collecting and processing partner -- like Kickstarter, Indiegogo or Razoo. The platforms, which take a percent processing fee, have significant differences in costs and approach. Kickstarter has an all-or-nothing approach, for example: You have to reach a minimum pledge level or none of the pledges are collected. Indiegogo will let the nonprofit choose between the all-or-nothing method and keeping pledges even with a goal shortfall. For a great primer on crowdfunding, see the recent article by Steve Boland in "Nonprofit Quarterly" at http://www.nonprofitquarterly.org/management/21146-crowdfunding-101-a-comparative-look-at-kickstarter-indiegogo-and-razoo.html