Crowdfunding gives nonprofits, artists a new way to raise money -- fast

The National Lutheran Choir isn't exactly known for techno-savvy fundraisers. But when it wanted to raise $10,000 quickly to cut a new CD, it filmed an upbeat video pitch, posted it on an online fundraising platform called Kickstarter and scrambled to inform sometimes puzzled fans.

The choir hit its goal this month and joined the growing ranks of nonprofit success stories through crowdfunding — raising money through direct, often quirky, public appeals on the Internet. The online solicitations bypass the usual e-mail and snail mail, and typically include a personal plea from someone who would benefit.

Hundreds, if not thousands, of Minnesotans have enjoyed success. They range from leaders in this week's Minnesota Fringe Festival to the historic Mounds Theater in St. Paul to a Minneapolis public school art mural.

"It's revolutionized how people can communicate with donors and raise money," said Laura Zabel, executive director of the St. Paul-based Springboard for the Arts, which has sponsored hundreds of crowdfunding appeals.

Kickstarter was the first major crowdfunding ­platform: Donations exploded from $29 million during its launch in 2009 to $318 million last year. It's used not just by nonprofits or folks with a cause, but also by entrepreneurs, artists, filmmakers and musicians.

Dozens of other crowdfunding sites have since emerged, based on cause and geography. GiveForward helps folks navigating medical crises. Sprigster.com collects for military veterans and their families. Mobcaster raises money for independent television programs.

This month, a new Minnesota site called Barnraisings hit the Web, seeking both cash and volunteers for a variety of local causes. It joins GiveMN, an online giving platform for Minnesota nonprofits started in 2009.

"We had a lot of questions from board members and donors," said Gretchen Boulka, choir marketing director. Some didn't want to donate online.

"But a lot of our singers are younger, and we engaged them and their friends," said Boulka. "I think it will benefit us in the future."

The choir's first step was to ask Kickstarter if it could join its platform, said Boulka. It then had to provide financial data to prove legitimacy.

It set a goal of raising $10,000 within six weeks. If it all wasn't raised, the choir would get zilch under this model. The rationale: Donors prefer to see something tangible, not an endless general fundraiser.

The choir then pulled together videos and photos for its fundraising pages.

Then came the hustle.

The staff, the board, the singers — all were posting on Facebook, Twitter, online — anywhere — trying to get people's attention. It wasn't until the last minutes of the campaign that the goal was reached.

"We all started clapping," said a relieved Boulka.

Justin Kazmark, a spokesman for the New York-based Kickstarter, believes that sense of urgency helps make such fundraisers successful, as well as the personal connections between donors and recipients.

For Minnesota's 5,000-plus nonprofit community and its residents, who donate more than $1 billion each year, the fundraising shift has been mind-boggling.

Candida Gonzalez, a community education coordinator at Jefferson School in Minneapolis, helped raise more than $5,000 over the past month through a crowdfunding platform to help pay for a Central Neighborhood mural project. She'd never given crowdfunding a thought before, but now she's a convert.

"What people want is flashy, colorful video that you can easily share on Facebook or get on your mobile phone," said Gonzalez. "It makes that easy."

Minnesota's newest crowdfunding site, Barnraisings has raised just over $1,300 since it was launched in July. Its creator, Jim Rettew, expects that will change as more Minnesotans learn about it.

"There's a niche for a local crowdfunding site because it features your neighbors," said Rettew, adding that the website also seeks volunteers, not just cash.

Barnraisings already has attracted the unexpected. The Hollywood Studio of Dance, a small nonprofit dance school in north Minneapolis, has just signed on. The studio has provided dance lessons and a sense of community to more than 1,000 students in the past 20 years. But as the economy faltered, so did many parents' ability to pay full fare. The school is now seeking funding for student scholarships.

"I never heard about this before," said Diane Elliott Robinson, the studio's founder. "But I thought, 'This is a great way to raise money and great way for us to get exposure.' "

There remain some risks. Individuals seeking cash without nonprofit or other institutionalized backing may not be fully vetted. The winner-take-all-or-lose-everything model can be devastating for those who don't reach their goals.

"It's still a little bit of the Wild West," said Jennifer Ford Reedy, president of the Bush Foundation. "There's a lot of faith involved. But mostly I see it as a great opportunity for people to get funding for something they are passionate about."