How to Choose the Best Crowdfunding Platform for Your New Nonprofit

One of the most important steps to a crowdfunding campaign is choosing your platform.   

There are a LOT of crowdfunding platforms out there. And they run the gambit from broadly known platforms, like Kickstarter and GoFundMe, to platforms geared specifically for nonprofits and social causes, like CauseVox and StartSomeGood. 

So, having a general understanding of what you’re looking for and doing research on some platform options is essential.

When considering platforms, ask yourself the following questions:

Who does the platform serve? 

Is the platform geared toward artists, nonprofits, entrepreneurs or individuals? Is it intended to raise donations, or donations in exchange for rewards or some other incentive? Or does it cater to investment opportunities that yield profit?

For example, Kickstarter is geared toward creative projects, and every project is required to contribute something concrete back to the world (e.g., a documentary or a product).  

This Kickstarter campaign raised $155,186 to support the building of an underground park in NYC’s Lower East Side.

On the other hand, GoFundMe is much more flexible and designed to support any community-based fundraiser that is for a personal cause.

This GoFundMe campaign raised $149,514 to support the expansion of Rancho Relaxo, an animal rescue farm.

Finally, there are a variety of platforms that are designed specifically for social cause campaigns.  Some, like GlobalGiving, require you to have a fully functioning 501c3 organization (or at least have a fiscal sponsor), whereas others, like StartSomeGood, do not require you to have tax-exempt status yet.  

Many of the platforms geared toward nonprofits, like CauseVox and Classy, also incorporate other nonprofit fundraising functionality. This can include peer-to-peer fundraising, event registration, donate pages and donor tracking. 

Note: if you’re at the stage of testing out a new idea and don’t have a nonprofit yet, or if you don’t have your tax-exempt status yet, your platform needs may change over time once you set up your 501c3 organization.  

You may want to look for a platform that caters to both individuals and nonprofits. Fundly is a good example of this type of platform.

What are the barriers to entry?  

Do you have to pay a fee to join? Is there an application or vetting process to get your project onto the platform?  Or do you just sign up and go?

A lot of platforms have a “sign up and go” approach.  The fees are primarily transaction fees from money raised.  These platforms can be great if you’re comfortable experimenting with crowdfunding.

Some platforms require an annual fee to join, or they offer lower processing fees in exchange for an annual fee.  This raises your up-front costs, so be sure that you’re ready to commit to that platform first. 

Other platforms have more extensive vetting, approval and training components. GlobalGiving is a good example of this type of platform. This GlobalGiving webinar explains GlobalGiving’s application process.

If you’re looking for a lot of support in building your campaigns, this type of platform might be helpful.

What fees does the platform charge and when?

Most platforms charge a transaction fee, as well as a fee charged by the third-party payment processing agent.  So be sure to look at both when calculating the cost.  

Some platforms offer discounted fees for larger campaigns. Others offer an annual subscription fee in exchange for lower transaction fees. And some offer subscription fees for add-on services. These options may be helpful as you gain experience and success with crowdfunding.

Also consider which third-party payment processing agent you and your supporters will be most comfortable with. Some common processing agents used by crowdfunding platforms are Stripe®, Paypal® and WePay®.

Note when your donations get processed, and when and how will you receive them. Is there a waiting period before processing?  

Keep in mind that for all-or-nothing crowdfunding campaigns (see below), your donors won’t be charged until you reach your goal.  

And finally, how upfront is the platform about its fees?  

Some platforms list their fees clearly on their website.  Others list only fee ranges on their website.  Some platforms don’t list fees on their website at all and require you to reach out to them first before they share fee information.

Is the platform a “pure” crowdfunding platform? Or is it a hybrid platform, offering multiple methods of fundraising?

Hybrid platforms geared towards nonprofit organizations may offer crowdfunding, peer-to-peer functionality, donation websites, event registration, etc. 

They may also offer “CRM”. This is the “back office” type software to allow you to meaningfully track your donors.  Classy Manager is an example of a platform that offers CRM.

If you’re looking for CRM functionality, consider how it integrate with whatever you’re already using to track donors. If you’re not tracking donors yet, can you use the platform’s CRM to track all your donors (i.e., including those that don’t donate through the platform)?

A pure crowdfunding platform may be more appropriate if you haven’t set up a tax-exempt organization yet.  In that case, you’re really just crowdfunding as an individual to test and fund your project idea. 

On the other hand, if you have a 501c3 organization, it may be helpful to use a hybrid platform designed for nonprofit platforms that provides multiple fundraising options.  

For example, a platform that provides crowdfunding and peer-to-peer will give supporters two ways to support you. They can donate to the crowdfunding campaign. And they can also set up their own fundraising page to raise funds themselves for your project.  

Check out Causevox’s discussion about peer-to-peer campaigns.

Is the crowdfunding platform an “all or nothing” platform or a “keep what you raise” platform?

Does the platform require you to campaign for a specific project using an all-or-nothing approach? This is the traditional crowdfunding approach. It means that you set a fundraising goal for the project, and if you don’t meet it, you don’t get anything.  

Some argue that this approach is most effective. They say that defined projects have greater success than ongoing campaigns.  

The all-or-nothing approach is intended to create a game-like atmosphere and a sense of urgency on the part of your potential donors.  It also keeps you from ending up with a half-funded project.

Other platforms allow you to set up a campaign and simply keep what you raise. You lose the game-like element, but you also avoid the risk of raising nothing.  

Keep in mind that you’ve promised your funders that you will deliver on a project. So, you should have a backup plan if the campaign only raises a portion funding needed to carry out the project.

Finally, platforms like StartSomeGood use a “tipping point” model, where you set a lower “all or nothing” goal and a higher “keep what you raise” goal. StartSomeGood’s blog includes an interesting discussion about their approach.

How does the platform integrate with social media and other online tools?

Does the platform prompt donors to invite their social networks to follow their lead after they give?  For example, a platform may offer a thank you page where donors can click to share on Facebook® that they just gave to your project and inviting others to give. 

Sometimes, this comes with a pre-populated message followed by a link, making it even easier for donors to share with their network.   They can choose to use the suggested text or edit it, but either way it is intended to increase the odds of sharing and expand the reach of your campaign.

Integration with social media platforms increase your campaign’s chance’s of success. Check out Fundly’s discussion of how Fundly allows you to accept donations on Facebook® .

What other features does the platform offer?

Some examples of features that you may be interested in are campaign customization options, the ability to process different currencies, mobile-friendly options, and gift cards. 

Which features do you care about?

Another feature that may be important, particularly if you aren’t technologically advanced or staffed up, is a user-friendly platform and design process.  It may be worthwhile to request a platform demo or trial period to try out the interface and determine for yourself if it makes sense to you.

How much support does the platform provide?

Some platforms provide one-on-one support, which may be helpful particularly with your first campaign.

A lot of the crowdfunding platforms have blogs and articles that are designed to help newbies navigate the process. It’s worth looking through the platform’s website to determine how helpful you find the guides and resources on the platform’s website.

Some platforms also offer add-on support options for an additional fee. This can range from courses to one-on-one consulting to actually designing and building your crowdfunding page for you.

Does the platform help you promote your campaign?

While a few platforms do claim to promote their user’s campaigns, most crowdfunding platforms do not help you promote your campaign. 

The platform may get a lot of traffic. But your fundraising goals will be dependent on your efforts to get people to view your campaign page and your ability to engage with them in a way that inspires them to give. 

What reputation does the platform have?

What do people say about the platform? What do user reviews say? 

Consider looking for ratings by Charity Navigator the Better Business Bureau or GuideStar.

Choosing the right crowdfunding platform is important. But, in the end, the success of your crowdfunding campaign is going to depend on how you design and promote it.  So, go with the platform that will best allow you to do that.