Online Fundraising - Pros, Cons, and How to Choose

Blog Summary: This blog discusses the advantages and disadvantages of online fundraising. It provides insights into its wider reach, cost-effectiveness, convenience, real-time updates, social sharing capabilities, and engagement tools. It also addresses challenges such as company fees, technical issues, high competition, donor fatigue, and verification concerns.

In today's digital era, online fundraising has revolutionized how individuals and organizations raise money for various causes. Whether it's a nonprofit seeking to fund its latest project, a school needing extra resources, or an individual with a personal cause, online fundraising offers a flexible and efficient way to gather support.

The internet's convenience and reach have made it possible to tap into a global audience, making online fundraising an attractive option for many. However, like any fundraising method, it has advantages and challenges. Before you plan to organize an online fundraiser, learn its pros and cons and how to choose the right online fundraising company for your needs.

Pros of Online Fundraising

Wider Reach

One of the most significant advantages of online fundraising is its global reach. Traditional fundraising methods often limit the reach to local communities or specific geographic areas. In contrast, online fundraising breaks these barriers, allowing campaigns to be shared across the world. This wider reach fosters a sense of community, leading to increased donations and support from people who might not have been aware of the cause otherwise, making the audience feel connected and part of something bigger.

Cost-Effective

Online fundraising is generally more effective than traditional fundraising methods. Traditional methods, such as event hosting or mailing campaigns, can incur substantial costs related to venue rental, catering, printing, and postage. Online fundraising companies, on the other hand, often have lower overhead costs, making it a more economical choice for many. Many companies charge a small fee or a percentage of the funds raised, but these costs are typically lower compared to traditional fundraising efforts.

Convenience

Online fundraising offers unparalleled convenience for both fundraisers and donors, making the process easy and comfortable. Fundraisers can set up campaigns quickly and easily, often within minutes. They can customize their campaign pages, upload photos and videos, and share their stories without the need for extensive technical knowledge. For donors, the convenience of being able to contribute from anywhere at any time, using various payment methods, makes it easier to support causes they care about.

Real-Time Updates

One key benefit of online fundraising is the ability to track progress in real time. Fundraisers can monitor donations as they come in, update supporters on milestones, and adjust their strategies as needed. This transparency helps build trust with donors, as they can see exactly where their money is going and how it is making a difference.

Social Sharing

The power of social media cannot be overstated when it comes to online fundraising. Platforms like Facebook, Twitter, and Instagram allow fundraisers to share their campaigns with a broad audience quickly. Social sharing can help campaigns go viral, reaching people far beyond the fundraiser's immediate network. This amplification effect can lead to a significant increase in donations and support.

Engagement

Online fundraising companies often come with interactive tools that help engage donors and keep them involved in the campaign. Features like comment sections, donation matching, and gamification elements like leaderboards can motivate donors to contribute more and share the campaign with their networks. Engaged donors are more likely to become repeat supporters, providing long-term benefits to the fundraiser.

Cons of Online Fundraising

Platform Fees

While online fundraising is generally cost-effective, it is not without costs. Most online fundraising companies charge fees for their services. These fees can vary widely, from a flat fee per transaction to a percentage of the total funds raised. Fundraisers must understand these fees upfront and factor them into their overall fundraising strategy.

Technical Issues

Online fundraising relies heavily on technology, and technical issues can arise. Website outages, payment processing errors, and other technical glitches can disrupt a campaign and frustrate donors. Ensuring that the chosen company has robust technical support and a solid track record of reliability is crucial. Additionally, fundraisers should have a plan to solve technical issues that may occur during their campaign.

Competition

The popularity of online fundraising means that there is a lot of competition for donors' attention and contributions. With thousands of campaigns running simultaneously, standing out can be a challenge. Fundraisers must invest time and effort into creating compelling campaign pages, engaging stories, and effective marketing strategies to attract donors. The competition can be particularly intense during peak times, such as the holiday season, when many organizations launch fundraising campaigns.

Donor Fatigue

With the increasing number of online fundraising campaigns, donors can experience fatigue. Constantly being asked for contributions can lead to a decline in donor engagement and a decrease in donations. To combat donor fatigue, fundraisers must be mindful of their communication frequency and ensure their messages are meaningful and impactful. Building a relationship with donors and showing appreciation for their support can help mitigate the effects of donor fatigue.

Verification

One of the challenges of online fundraising is verifying the legitimacy of campaigns. While most companies have measures to prevent fraud, there have been instances of fraudulent campaigns taking advantage of generous donors. Potential donors may hesitate to contribute to online campaigns if they know the legitimacy. Fundraisers must provide clear, transparent information about their cause and demonstrate their credibility to gain donors' trust.

How to Choose the Right Online Fundraising Company

Assess Your Needs

Before choosing an online fundraising company, assess your specific needs and goals. Consider the type of campaign you are running, the target audience, and the amount you aim to raise. Different companies cater to different types of fundraising, from nonprofit organizations to personal causes. This understanding can narrow the options and help you find a company that aligns with your objectives.

Platform Features

When evaluating online fundraising companies, look for features that meet your needs, such as ease of use, customization options, integration with social media, and the ability to accept various payment methods. Some companies offer advanced features such as donor management tools, CRM integration, and analytics. Determine which features are essential for your campaign and prioritize companies that offer them.

Fees and Costs

As mentioned earlier, online fundraising companies typically charge fees for their services. These fees can be different for different companies and their services offered. Some companies charge a flat fee per transaction, while others take a percentage of the funds raised. Understanding these fees and factoring them into your fundraising strategy is important. Compare the fee structures of different companies to find one that offers the best value for your campaign.

Support and Resources

The level of support and resources offered by a company can significantly affect the success of your campaign. Look for companies that provide robust customer support, including live chat, phone support, and email assistance. Additionally, some companies offer resources such as fundraising guides, best practices, and success stories to help you plan and execute your campaign effectively.

Reputation and Reviews

The reputation of a fundraising company is an important consideration. Look for companies with a proven track record and positive user reviews. Research the company's history, including any past issues or controversies. User reviews or testimonials can provide valuable insights into the company's reliability, ease of use, and overall performance. Choose a company with a strong reputation and positive feedback from other fundraisers.

Success Stories

Success stories and case studies are valuable tools for understanding how other fundraisers have successfully used the company. See examples of similar campaigns and how they achieved their goals. Success stories can offer inspiration and practical tips for running a successful campaign for the company. Some companies highlight these stories on their websites, providing a sense of credibility and reliability.

Online fundraising offers numerous benefits, from reaching a global audience to providing real-time updates and engagement tools. However, it also comes with challenges like company fees, technical issues, and competition. Carefully evaluate your needs and the features of different platforms, and choose the right online fundraising company for your campaign.

When selecting a company, consider factors such as ease of use, fees, support, reputation, and success stories. By choosing a company that aligns with your goals and needs, you can maximize the effectiveness of your online fundraising campaign and achieve your fundraising objectives.

Please feel free to share your experiences or tips in the comment section below. Don't forget to subscribe to our blog for more tips and insights on effective fundraising strategies. Together, we can make a difference and support the most important causes.

FAQs for Online Fundraising - Pros, Cons, and How to Choose

1. What is online fundraising?

Online fundraising is raising money for a cause, project, or organization through internet-based companies. It involves creating a campaign for a fundraising company, sharing it with potential donors through social media and other digital channels, and collecting donations electronically.

2. What are the main benefits of online fundraising?

The main benefits of online fundraising include a global reach, cost-effectiveness compared to traditional fundraising methods, convenience for both fundraisers and donors, real-time progress tracking, enhanced social sharing capabilities, and interactive engagement tools.

3. What are some common challenges of online fundraising?

Common challenges of online fundraising include company fees, technical issues, high competition for donor attention, donor fatigue due to frequent fundraising requests, and difficulties verifying campaign legitimacy.

4. How do I choose the right online fundraising company for my campaign?

To choose the right online fundraising company, assess your specific needs and goals, evaluate the company features (such as ease of use, customization, and social media integration), compare fees and costs, check the level of support and resources provided, read user reviews, and look for success stories of similar campaigns.

5. Are there any fees associated with online fundraising companies?

Yes, most online fundraising companies charge fees for their services. These fees can include a percentage of the total funds raised, transaction fees, and sometimes a flat fee per donation. It is important to understand these fees and factor them into your fundraising strategy.

6. Can online fundraising companies handle international donations?

Many online fundraising companies can handle international donations, but it is important to check the specific company's capabilities. Some companies offer multi-currency support and international payment processing, while geographic regions may limit others.

7. How can I ensure my online fundraising campaign stands out?

To ensure your online fundraising campaign stands out, create a compelling and clear campaign story, use high-quality images and videos, engage with potential donors through social media and email, offer regular updates on your progress, and express genuine gratitude to your donors.

8. What should I include in my online fundraising campaign page?

Your online fundraising campaign page should include a clear and compelling story about your cause, high-quality images or videos, specific goals and milestones, detailed information about how the funds will be used, and regular updates to keep donors informed and engaged.

9. How can I build trust with potential donors for my online fundraising campaign?

Building trust with potential donors involves providing clear and transparent information about your cause, sharing your credentials and relevant experience, offering regular updates on the campaign's progress, and showcasing testimonials or endorsements from reputable sources.

10. What are some of the most popular online fundraising companies?

Some popular online fundraising companies include GoFundMe, Kickstarter, Indiegogo, Classy, Fundly, and Patreon. Each company caters to different types of fundraisers and offers unique features and benefits. Choose a company that aligns with your campaign goals and needs.

Author Bio

Clay Boggess has been designing fundraising programs for schools and various nonprofit organizations throughout the US since 1999. He's helped administrators, teachers, and outside support entities such as PTAs and PTOs raise millions of dollars. Clay is an owner and partner at Big Fundraising Ideas.