Roughly 32 percent of people say they donate to a crowdfunding effort each year, according to a September 2020 survey of 1,535 adults by the Lilly Family School of Philanthropy at Indiana University. People were most likely to give to appeals made by a family member or close friend: More than half of respondents who had supported a crowdfunding campaign said they had given to one such effort. Campaigns organized by charities were the second most popular, with more than 47 percent of crowdfunding donors saying they had donated to a nonprofit on a crowdfunding platform.
That finding should pique nonprofit fundraisers’ interest in crowdfunding campaigns, said Una Osili, associate dean for research and international programs at the Lilly School. “Charitable organizations can start to think about how they can build crowdfunding into their strategy,” she said in a webinar presentation on the report.
Participation in crowdfunding campaigns is still relatively low. About 91 percent of people surveyed were familiar with the concept, but just under 32 percent said they had given to such an effort. Still, that’s an increase from four years ago. In 2016, just 22 percent of Americans made contributions to a crowdfunding campaign, according to a Pew Research Center report.
While these campaigns aren’t booming, they’re clearly growing, Osili said. “Getting in now and brushing up your own ability to use this new tool is going to be critical for many nonprofit organizations,” she said.
What’s more, people who had already given to crowdfunding campaigns grew more comfortable giving that way during the pandemic, when individuals’ and nonprofits’ financial needs skyrocketed and many took to mass giving platforms to appeal for contributions toward rent, medical bills, funeral costs, and other expenses. Among donors who routinely gave to crowdfunding efforts before the pandemic, more than 47 percent said they had contributed to a stranger’s fundraising appeal during the previous year. That’s nearly 10 percent higher than the share of all donors who said they had supported a stranger’s crowdfunding campaign.
Nine out of 10 donors surveyed said they’d continue to give the same amount or more to crowdfunding efforts over the next three years.
Moving fundraising to social media and crowdfunding platforms isn’t replacing giving by check or through an organization’s website, Osili said. Rather, these campaigns are “growing the pie.”
Younger and More Diverse
The survey also captured some demographic trends that set crowdfunding donors apart from those who give through other means. Crowdfunding donors are slightly more racially and ethnically diverse than donors who give by check or through a charity’s website. They’re also more likely to be younger, single, and less religious, according to the survey.
What’s more, because crowdfunding donors give most often to people they know, those who prefer this giving method can be ambassadors who introduce charities to new donors among their family and friends. That potential hasn’t yet been realized, however. More than 62 percent of donors to crowdfunding efforts say they never use social media to ask their friends or family to join them in giving to a campaign.
Charities could broaden their reach by asking supporters to tap their networks for gifts, says Lloyd Hitoshi Mayer, a professor of nonprofit law at the University of Notre Dame Law School. For now, crowdfunding campaigns tend to post the biggest numbers when they respond to crises, Mayer said.
That was the case this summer when a GoFundMe memorial fund for George Floyd received almost 500,000 individual donations — the most people ever to support one campaign on the platform. That fundraising effort was one of many to see donations skyrocket as protests for racial justice surged across the country. The Lilly School survey found that roughly 20 percent of donors to crowdfunding campaigns give to social-justice causes. Nonprofits with social-justice missions could use crowdfunding to connect with new donors, Osili said.
While crowdfunding is still maturing — and potential donors still have questions about security and trust — Mayer says the fundraising tactic has promise: “You have to embrace these new tools because otherwise you’re foreclosing an avenue for potential supporters.”
