Register at a website like Feedthemuse.net or slicethepie.com. These sites are designed to allow musicians to raise money to record a CD, tour and accomplish anything else an artist needs capital to do.
Create your profile at these sites. Upload pictures and any music you might have previously recorded. Include as much information as possible to sell your band to the public.
Write up a mission statement/pitch for your project. Describe just how much money you need to record your CD, what kind of music you play, and other details about your music. Be specific about your intent.
Submit your pitch to the website and wait to see if your project is accepted. The more unique the project, the more likely it is that it will be accepted.
Offer rewards to people who donate money. After your project is accepted, you can create a pay scale in which fans get bigger rewards the more money they donate. For example, you may offer a fan that donates $50 the chance to have her name in the liner notes of your CD. You may offer a fan that donates $200 this same reward on top of getting a chance to name one of your songs.
Use shows as a fundraising opportunity. Keep a donation box at your merchandise table. During your set, announce to the audience that you are accepting donations to record a CD. Organize shows yourself and use any profits you have to record your CD.
Alert your fans to the fact that you need to raise money to record a CD. Post often about it on social networking sites and on your website. Offer special rewards to people who donate money, such as an autographed CD (when you record it) and T-shirt.