Whether we like it or not, disruptive innovation is now the name of the game in higher ed. What’s to blame? Internet technologies, of course.
No doubt your institution has had to change its marketing and communication practices over the last five years to adapt to the paradigm created by the rise of social media. Meanwhile, the academic side is under pressure to offer alternatives to the traditional higher education model through MOOCs and venture-funded startups.
As if that wasn’t enough, converging factors point to college and university fundraising as the next item on the soon-to-be-disrupted list, from what some predict will be a rise of crowdfunding in higher education.
What is crowdfunding?
As its name suggests, crowdfunding relies on the participation of anyone who takes an interest in a particular goal or project. Heard of the “The Veronica Mars Movie Project” on Kickstarter, which raised more than $5.7 million in a few weeks last spring? Earning attention from social, online, and traditional media, this project is one of the better known examples of the power and potential of crowdfunding.
The word crowdfunding appears to date back to at least 2006 and is typically defined as “the collective effort of individuals who network and pool their money, usually via the internet, to support efforts initiated by other people or organizations.” A quick look at Google Trends shows that mentions of crowdfunding in the news have skyrocketed over the past 18 months.
But is it for higher ed?
Crowdfunding has been used mainly to raise funds online for artistic projects, innovative products, and promising start-ups. The biggest platforms, Kickstarter and Indiegogo, have hosted several campaigns submitted by students, faculty members, or schools. Indiegogo has partner pages with the University of California, San Francisco as well as Haas School of Business at UC, Berkeley and the University of San Diego.
Niche crowdsourcing platforms have also started to approach some higher ed communities and institutions. Platforms such as USEED, launcht, and GiveCorps Pro work directly with schools to take advantage of the growing interest in crowdsourcing. Others, like AlumniFunder or PIGLT, bypass traditional fundraising channels to play matchmaker between enterprising students and alum donors.
As research funding falls prey to the budget ax, crowdsourcing sites such as Microryza and Petridish have even pledged to help researchers find the funds they need.
Why should you care about crowdsourcing?
While it’s not yet on the radar of most development professionals in higher education, crowdsourcing has become a very noticeable part of the online fundraising landscape for younger donors.
“People are already using platforms like GiveCorps Pro, Kickstarter, FirstGiving, and IndieGoGo for their personal fundraising efforts, so why wouldn’t we want to meet them where they already are?” says Dayna Carpenter, associate director of annual giving at the University of Maryland-Baltimore County.
The power of crowdsourcing lies in its ability to pool together thousands of small donors in very short periods of time, so it’s also a great fit for the aspirations (and wallet) of the younger donor. As the 2012 Millennial Impact Report survey of more than 6,000 active donors aged 20 to 35 revealed, 75 percent prefer to give online. Moreover, 42 percent say they like to “give in the moment” as an emotional response that’s often triggered by social media appeals.
Millennials may not yet have deep pockets, but it’s important for them to know their gifts make a difference.
Project-based crowdfunding is a great and cost-effective way to keep these donors philanthropically engaged in smaller fundraising initiatives at their alma mater.
“With limited resources, not every program or giving opportunity can be a priority for development officers,” says Michael Cather, associate vice president for development at Towson University (Md.) Cather believes crowdfunding offers an ideal platform for students, faculty, and other advocates to spread the word and support the good work being done.
What are the main opportunities and risks?
“Crowdfunding can help us engage donors that we have never reached before,” says Andrew Gossen, senior director for social media strategy at Cornell University’s Office of Alumni Affairs. “Young alums or graduates for sure, but maybe the thousands of people taking MOOCs at Coursera or edX as well.” He thinks these nontraditional students may want to use crowdfunding to give money to the institutions offering the free online courses.
But, just as the social media explosion caused admissions and marketing departments to rethink their efforts, crowdfunding means that conventional fundraising paths may face disruption. These initiatives often bypass the traditional fundraising arm of the institution, and may divert funds from annual fund or capital campaign efforts.
As the strength and popularity of crowdfunding grows, institutions will have to adjust their thinking to accommodate what has already proven to be a successful tool.