Importance of Social Media to Crowdfunding

Aug032017

Audiences have moved to new online tools, new digital places. Social media is the new access point for discovery, referrals and trust building–all of which are essential for building your donor list or gaining support for your projects. Social media and crowdfunding are a natural combination. Social media helps you tell a personalized story and extend your reach beyond your known network.

But maybe you’re wondering, does social media really work? Do you really need great storytelling for successful crowdfunding?

The answer to both question is an unequivocal “yes”. You need combine social media with your crowdfunding efforts in order to make the biggest impact.

Social media is one of the most important tactics for connecting supporters to an institution/organization. This goes for all engagement projects, and crowdfunding is no different. Social media gives you the ability to engage your supporters where they are–online. It also gives you the opportunity to create new connections. (You’d be surprised who you may be missing if you don’t have a social media strategy!)

In order for your success to grow, you must be looking beyond your current community. Social media lets your current supporters and your new supporters to easily share your crowdfunding efforts–expanding your community with every click, like and share. It’s important to understand that the crowd you are looking for is not necessarily looking for you. Social media helps you to find them.

According to The Globe and Mail, Gen Y (1977 – 1994), commonly known as millennials, are the next important demographic for philanthropy (Bouw, 2016). Compared to Baby Boomers, they prefer online donations over traditional fundraising efforts. Gen X (1965 – 1976) are just as important; they are just as tech savvy as millennials; and they are just as interested as online donations (Coleman, 2016).  

(If you a bit of an explainer on crowdfunding, you can read our recent blog post, Introduction to Crowdfunding).

Social Media Growth and Behaviour

In order to understand where to go, it’s always a good idea to look back from where we came. Social media started from a social platform called Six Degrees which was established in 1997 and allowed users to create a profile and then friend other users (Hale, 2015).

Then came blogging and instant messaging–ICQ, MSN messenger and AOL were some of the most popular tools.

Next, we saw the birth of social media platforms: LinkedIn (2002), Myspace (2003), Facebook (2005), Twitter (2006), Tumblr (2007), Flickr (2010) and Instagram (2010) have all risen to prominence in the last 15 years (Hale, 2015). The quick escalation of social media shows us how important it is to the public…and to many of your potential or current supporters. In the last 20 years, social media has become highly advanced and important for all marketing purposes.

When it comes to user behaviour, Facebook remains the king of all platforms, as it is used by 92% of social networkers. LinkedIn comes in at 33%, and Twitter and Instagram at about 26% each (Rody-Mantha, 2016). Further, 70% use two or more social media platforms (Rody-Mantha, 2016).

The number of users on each platform is staggering: Facebook has 1.94 billion, Instagram has 700 million users, LinkedIn has 500 million users and Twitter 328 has million users. On top of that, almost 5 billion videos are watched everyday on YouTube.

And if we really want to know where social media is going, we have to  look at the importance of mobile. The use of mobile devices for social media networking grew from 60% to 68% in one year (Rody-Mantha, 2016). That’s the kind of growth you want to access.

Social Media and Donating

Okay, social media is popular. We all probably knew that. But when it comes to fundraising, why should you care?

More and more, this is where engagement is happening, and investors need to feel as if you are taking your social media efforts seriously (Clawson, 2015). If you’re not willing to meet them where they are, why should they donate to you?

Companies who used social media to connect and promote their crowdfunding campaign saw an increase of 30% of success (Clawson, 2015). According to a recent study, social media plays a role in 35% of all donations; Facebook, alone, plays a role in 93% of direct donations (Te, 2017).

It doesn’t stop there, 55% of people who engage with nonprofits on social media, end up taking some sort of action, such as donating, volunteering or attending/participating in charitable event (@Pay LLC, 2016).

Social Media: Gen Y and Gen X

According to Edge Research, Gen Y donates $649 on average every year (about $300 less than Baby Boomers) (Bouw, 2016). However, this has more to do with Gen Y earning less, than it does their “lack of desire to donate” (Bouw, 2016). It’s also because Gen Y makes more demands on who, why and how they donate (Bouw, 2016). They want to know exactly where the funds go to (Escobar, 2017). Which differs from many Baby Boomers, who are known to be loyal donors–donating to the same cause, time and again (Escobar, 2017).

Gen X tends to be a mixture of traditional fundraising and digital, due to them working in the digital era, but raised in the traditional one. However, they tend to be forgotten about in nonprofit or marketing plans, generally because they represent a smaller segment of the population in comparison to Baby Boomers and Gen Y.

Social media is an important engagement for Gen X as well; about 47% follow a nonprofit on social media (Upleaf, 2017). Gen X also values transparency. Many have stated that their decision to donate is dependant on whether they can see their donation having impact (Upleaf, 2017). Interestingly, they may be on their social media networks more than Gen Y (Bromwich, 2017).

Social Media and Crowdfunding

You may be wondering why this matters for crowdfunding. It matters because in order to be successful, you have to engage individuals and communities…make them feel connected to your fundraising efforts. Your efforts need to be done on the right platform at the right time, and you need to tell the right story. It’s not enough to post a campaign and wait for donations to come through. Your donors are not necessarily looking for you. You have to find them. Social media has been proven to be a successful tactic for reaching potential supporters.

This doesn’t mean that your current supporters (who may not be on social media as much) should be pushed aside…not at all. They have been proven to be loyal supporters. However, you don’t want to miss the opportunity to  connect with your digital supporters, Gen Y, in particular, and Gen X.

Every generation is different, so how you reach them is going to be different. For both of these generations, digital is an important way to connect. Generic donations to the overall institution can be unsuccessful because both generations want to know exactly what donations will be used for. Social media gives you the ability to easily share, post, like and drive traffic to your website. Adding social media to your crowdfunding campaigns allows you to connect with a larger number of potential donors.

When you want to launch a social media campaign, there are many insights to keep in mind. If you wish to learn more, you can read through our blog post, Four Insights to Better Content.

If you need more help connecting with your desired audiences, we know where they are and we can help you connect with them.

Reach out to us to find out more, sales@bv02.com . We like helping passionate people meet their goals, and we can help you with the crowdfunding platform, campaign marketing and research that will help you reach your fundraising goals.

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