PhilanthroTech: How Nonprofits Are Using Crowdfunding

Note from Beth: I’m headed down to Austin, TX for SXSW where I will have the pleasure of facilitating a workshop on measuring social media with KD Paine with case studies by David Neff and Carie Lewis.   David is based on Austin — wanted to share with you a post about crowdfunding to celebrate Austin Giving Day #AmplifyAtx that raised over $2 million earlier this week.

PhilanthroTech: How Nonprofits Are Using Crowdfunding – guest post by David Neff
Crowdfunding. Crowdfunding. Crowdfunding. The word is ringing in the ears of nonprofit fundraisers and executive directors this year. So why is this buzzword suddenly all over the place in the nonprofit world?
There was a lot of buzz about crowdfunding in 2012: a video game called Star Citizen raised more than $7 million, Kickstarter banned nonprofits from using its platform (see #3 on that page), and a Tumblr popped up that takes aim at suspicious crowdfunding projects. For nonprofit leaders who are paying attention, the crowdfunding trend is hard to miss.
But crowdfunding isn’t new to nonprofits; it’s something they have been doing for years. They build up an online and offline community, create great projects, and then ask the community to fund them through donations. However, there is a new way that nonprofits are using crowdfunding: giving days. I foresee that 2013 will be the year that this strategy really takes off.
Giving days are 24-hour online fundraising competitions that combine gamification and deep social interaction to bring communities together for local causes. In November 2012, the giving day platform Razoo partnered with GiveMN, an organization that aims to grow online giving in Minnesota, to break a world record by raising $16.3 million for Minnesota charities in just 24 hours. More than 53,000 individuals contributed to that giving day, and as a result, 4,300 nonprofits and schools received critical funding.
How can we test this this theory, and how can you be a part of it at SXSW this year? I’m so glad you asked. Austin is hosting its own giving day, called Amplify Austin, on March 4, 2013. The goal is to get more than 200 nonprofits to participate and then raise at least $1 million for them. (Full disclosure: I’m on the planning committee for this event.) You can also learn more about crowdfunding from a variety of presenters at SXSW—check out the speakers from Crowdfunder, TechShop, and a group of four speakers including those from Citizinvestor and CivicSponsor, Inc.
I’m one of the PhilanthroTech bloggers posting here on the Groupon Grassroots blog as we prepare to head to the 2013 SXSW Interactive Festival in March. Stay tuned for more conversations about topics ranging from microvolunteering to disaster response. We are looking forward to engaging in these conversations with you over the next couple of months.
How do you think offline or online crowdfunding will affect your favorite causes in 2013? Add your comments below.

David J. Neff is author of The Future of Nonprofits: Innovate and Thrive, The creator of the npo Lights. Camera. Help., and a Digital Strategist at PwC in Austin, Texas. He has more than 14 years of experience driving innovation and change in the nonprofit sector. Check him out on Twitter @daveiam.