We have explored free or "nearly free" platforms in other posts, but this post jumped to the forefront of my creative mind YESTERDAY, when I received an unsolicited email for the 3rd time this month (and its only the 10th) from our friends at GoFundMe.
I donated to a campaign some time ago back in 2018 to a family I am close with that suffered a catastrophic loss.
The email I received yesterday was promoting ANOTHER campaign, and while I'm sure the cause was justified and needed - it just wasn't for me. But nevertheless, the emails have been coming pretty steadily since I made that donation.
If the platform is "free" - how do they make revenue?
GoFundMe changed their revenue model some time ago to be powered by donor "tips". Previously the platform costed 5%, plus the 3% charge for payment processing (this is a fairly universal charge).
There is a prevailing thought that there is some sort of paid sponsorship and display/promotional advertisement revenue stream happening behind the scenes.
The truth is that once you reach their scale ($100 million in 2016), you have an advantage of being able to create revenue a variety of different ways.
What does this mean to your high school band, or non-profit organization?
A free platform is certainly attractive, however consider the fact that FansRaise completed an analysis of our active campaigns and compared results to campaigns run from a standard "GoFundMe" format...
It was determined that campaigns that are run with the FansRaise platform and that followed their model of participant engagement, include an email marketing component, and are lead by an executive org leader produced results that are 417% higher.
Here's some MATH to prove the point:
100 participants in an Organization run a crowdfunding campaign using GoFundMe:
- The group leader creates a GoFundMe page, sets up a WePay account and links the 2 together (that's another separate log in, by the way), and then shares the page across the organization with the request to "please share this page".
- Since there are no real monitoring tools to assess buy-in, activity, or accountability, some people do while most others do nothing.
- A safe assumption is that a GoFundMe campaign involving a group of this size should raise about $3,000 (roughly $30 per 'participant') although only a few people actually do ANYTHING to promote the campaign. This is a pretty typical scenario that is quite common.
- The campaign would bring $3,000 to the organization since GoFundMe doesn't require a fee.
Now, compare this to a similar campaign using the FansRaise platform:
- It's likely that 80% of participants engage (provided that the campaign participants are guided, 'coached' and motivated by their leader, director, or manager).
- The 80 campaign participants are asked to produce 20 potential donor contacts into the platform - which in reality ends up averaging something more like 10 per member.
- We now have a contact list built of over 800 potential contacts, and once the campaign begins the FansRaise platform begins sending personalized email messages to those contacts from the voice of the participant. The participant doesn't need to write any messages or really DO ANYTHING, since our system does it for them.
- The combination of targeted and personalized email, along with the occasional social media share brings about more net-new donations.
- FansRaise creates customized Supporter Requests that help drive more views, shares, and donations to your page over the course of the campaign.
- The campaign cycles through and ends, and the average amount raised comes in about $80 per participant (this is on the lower end, by the way), and across the group the total raised is $6,400.
- After subtracting FansRaise's 15% fee, the total to the group becomes $5,440.
By giving up 15% of your donations, you have an 85% share of a MUCH bigger pie. Your group just netted over 81% more money.
Seriously - would you rather get a check for $5,440 or $3,000?
Where is GoFundMe missing out? Why would my group's campaign be better off elsewhere?
GoFundMe largely exists in the social media realm, meaning that it's depending on your campaign stakeholders to share your donation page on their various social media accounts.
This leaves your page promotion in large part up the the mysterious Facebook Algorithm - which is the software logic that builds your Facebook timeline and social feed every time you log into your account.
It's estimated that you only see 14% of the posts that are shared by your Facebook connections. This means that only a limited number of people will ever be exposed to your campaign message, and when they are it will be buried inside of much more engaging content, like videos, ads, and lots of cat pictured.
The other less-talked-about issue is that social feeds are LITTERED with endless donation requests for money. By bringing your ask directly to the recipients email inbox, you are much more likely to cut through the clutter and static, and get a positive result.
And how are donors handled after the campaign ends? You guessed it - they are forever on GoFundMe's opt-in marketing list. Take it from me, donors kind of hate that.
Also consider the news and the media coverage of large high-profile crowdfunding platforms in general. If you read some of the more revealing and unfiltered accounts of GoFundMe scams, you'll be shocked at how people can use and abuse a non-moderated and unsupervised platform to make money for a variety of shady reasons. Of course your organization would never go for this type of approach, but many people are becoming turned-off by repeated accounts of fraud and unscrupulous behavior using GoFundMe.
In the end - a smaller, focused, and specific niche platform that understands and supports your goal is the best option.
FansRaise was created by former educators, arts administrators, and booster parents to help groups raise more money faster. End-to-end support and coaching of campaigns is a part of every client engagement we undertake, which is something that other larger crowdfunding operations do not have the time or inclination to undertake.
We've got your back. We would love to help!
If you're considering a crowdfunding campaign to help your organization grow, grab our free $10,000 Blueprint and use that as your roadmap as you chart your course: