#GivingTuesday: What you need to know about crowdfunding

#GivingTuesday Morgan County Christmas Assistance Program

Last year, Morgan County came together and raised more than $12,000 for families in need on Giving Tuesday. This effort would not have been possible without crowdfunding.

This year, we want to raise even more for Morgan County families in need! Crowdfunding has become a far greater fundraising success than anticipated when it first began to appear in the mid-2000s.

According to Fundable, crowdfunding has a 74% annual growth rate, because it has become an incredibly important funding option as other grant and loan funding has become significantly less available.

What is Giving Tuesday?

#GivingTuesday originated in 2010 at the 92nd Street Y in New York City. Being a cultural center for more than 140 years, the organization's Belfer Center for Innovation & Social Impact created the event to connect "diverse groups of individuals, communities and organizations around the world for one common purpose: to celebrate and encourage giving." You can learn more about the history of #GivingTuesday here. 

Last Year, the CFMC created a crowdfunding campaign to help raise funds for the Morgan County Christmas Assistance Program facilitated through Churches in Mission. Our goal was to raise $5,000 with a $1-for-$1 matching grant from Citizens Bank. With the help and support of the community, $12,620 was raised to help provide Christmas assistance to residents of Morgan County.

This year, with your help we hope to raise even more and assist more families in our community. Join us and make a difference in the lives of our friends and neighbors this holiday season. You can also drop off donations at Morgan County Citizen Bank branches on Tuesday, November 29th.

What is crowdfunding?

#GivingTuesday Morgan County Christmas Assistance Program
Crowdfunding is the act of raising money from a large number of people, usually in small amounts ranging from $5-$50. Increasingly online, people and organizations can ask for donations for causes that range from start-ups to personal mission trips to medical bills to Christmas assistance programs for the community. The amount of each donation does not need to be large because of the number of people donating to this cause. Sometimes, incentives are listed to encourage people to give, but often the incentive is simply helping those in need.

The CFMC wanted to be involved in this day of giving because it is a day that bring our community even closer together as we lend assistance to our own friends and neighbors. Through the power of social media, it is easy to share the fundraising page and acknowledge those who have supported the campaign.

One way social media can help your campaign is by having your followers share your posts and comment why or how they support the cause. Sharing via social media also improves your pool of potential donors through the viral effect of one user sharing a story with another until a large number of people have seen the post, and perhaps participated in the call to action.  

 Safety and Options

There are a variety of different crowdfunding websites you can use. Some popular sites include Indiegogo.com, GoFundMe.com, and Youcaring.com. The majority of these sites charge fees or take a percentage of the funds raised from the fundraiser. Before starting a campaign, it is best to check the site's focus and operating rules. Remember, you may still need to pay PayPal or WePay for credit card fees associated with your donations.

It is important to remember that while non-profits are tax-exempt under the law, individuals may have to pay taxes. If an individual or for-profit business receives more than 200 donations or more than a total of $20,000 in donations through PayPal or WePay they will receive IRS form 1099-K for tax purposes.

Crowdfunding Platform Fees

Free + Donation Processor Costs (PayPal and WePay), voluntary contribution to support operations

5% + Donation Processor Costs (PayPal and WePay)

4.9% + Donation Processor Costs (PayPal and WePay)
5% non subscription fee, 3% with $50 a month subscription

5% + Donation Processor Costs (PayPal and WePay)

 5% + Donation Processor Costs (PayPal and WePay)

In an article by Fran Kritz in the October/November issue of NeurologyNow, Bruce McClary, vice president of public relations and communications at the National Foundation for Credit Counseling in Washington D.C., recommends checking a review site like Crowds Unite to check the validity of crowdfunding sites. McClary also recommends calling the Attorney General or the Better Business Bureau of your state to see if any claims against a site have occurred.

For #GivingTuesday, the CFMC is going to continue using YouCaring for our campaign because it has the lowest fees. By doing this, more money is given to the residents of Morgan County.

Tips for Crowdfunding

In a 2015  Inc. article by Jennifer Alsever, Daniel Haarburger, a student entrepreneur who has run two successful Kickstarter campaigns, said "Running a crowdfunding campaign is much like launching a company."  This is important to remember, because raising funds through crowdfunding is much more than setting up crowdfunding platform and sharing it with your friends. A successful campaign can often take weeks or months, running through multiple smaller campaigns in order to raise the needed funds. 

Expand your in-crowd Friends and family go only so far. Before a campaign, use social media to reach out to influential leaders and bloggers in your industry. Haarburger, who built a smartphone mount for bicycles, cultivated design bloggers and people in biking groups.

Make it a full-time job You can't just ask for money and then walk away. Carefully track your campaign to answer questions and stay in touch with donors. Haarburger tracked his contacts and interactions with spreadsheets, which ensured he was taking consumer feedback into account.

Give yourself wiggle room Many people underestimate the time and cost of making and shipping a product--so adjust your financing requests and timelines accordingly.

Plan your endgame Before you launch a campaign, know exactly what you want: Are you starting a long- term company, creating a standalone product, or trying to realize a more finite goal?

 Join us

#GivingTuesday Morgan County Christmas Assistance Program
To follow everything #GivingTuesday and our push, follow the CFMC on Facebook at Community Foundation of Morgan County and on Twitter @CFMC_IN

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