Are You Ready for Crowdfunding?
A few years ago, something amazing happened in the world of fundraising. Historically, raising money meant looking for deep pockets. One or two investors or funders could change the course of a project or program. Donor cultivation was about appealing to an audience of few.
When crowdfunding entered the scene in 2003, it was largely designed to support the arts community. But the launch of extremely successful projects over the last decade or so have made crowdfunding a part of doing business.
As a grant writer, this shift was visible in one major way. Before crowdfunding began to make the news, people would suggest an idea or concept and joke, “Think I can get a grant for that?” Then, one day, after a few campaigns for albums and art projects and potato salads reached viral status, for better or worse, the joke became, “I think I’ll launch a Kickstarter.” And the years since have been interesting.
Crowdfunding democratizes investing, creating a forum where someone with some time and a great idea can reach a large number of potential supporters. This has changed the way that we think about fundraising. Instead of telling a story that motivates one key individual at a foundation or investment firm, its now vital to consider telling a story that touches the hearts of a broader audience. Before crowdfunding, it was critical to meet narrow grant proposal guidelines that may not have reflected the most current community needs. Business concepts needed to be competitive and show large returns. But since the advent of a high-engagement, person-driven funding method, telling a story well, to as many people as possible could fund projects. This changed everything.
Today, crowdfunding is used to raise money for everything from honeymoons to tech inventions. It provides a way to maintain independence and authenticity, while gaining access to capital with relative speed. For individuals, these campaigns offered a way to meet needs or launch ideas by accessing a larger base of support.
In spite of how straightforward it may seem, it’s really important to have a clear sense of how crowdfunding works before you get started. A few key pieces should be in place before you launch a campaign.
1. Have a crowd.
I have seen no shortage of organizations launch a Facebook page and crowdfunding campaign on the same day. This is a huge miss. Crowdfunding mandates that you have a crowd to turn to. An active social media base and an up-to-date website that sees reasonable traffic are the absolute minimum here. I would also consider an email list to be an extremely helpful tool.
Once you have these in place, including a decent following that regularly engages with your content, you’re ready to get started.
2. Set a reasonable goal.
It can be exciting to think about the possibilities, so it’s never a surprise when a client considered launching a $100,000 campaign with only a few hundred Facebook friends to support it. The thought seems to be, “Why not set the bar high? It could get people to give more!” But it’s important to think about the campaign from the perspective of the donor.
Similar to the way fires are fueled by oxygen, crowd funding is fueled by enthusiasm and momentum. Even the most important projects need both to survive. If a donor visits your campaign on half way through and sees that you’ve only raised 5% of your goal, their instinct will most likely be to draw back, feeling as though they are giving to a failing effort.
On the other hand, wildly successful campaigns are set up with stretch goals and match grants in place to keep people enthusiastically engaged. The best example I know is the Radiotopia Kickstarters. Both campaigns included multiple stretch goals, sometimes inspiring donors to give more than once. One brilliant point was a goal that actually tracked the amount of donors rather than funds. So individuals could give as little as a dollar and feel as though their contribution was a valuable vote of support.
The psychology of giving is vital to understand. It’s much more exciting to give $25 to a 90% funded campaign for$10,000 than it is to give $25 to a 9% funded campaign for $100,000. In spite of how much they may care about your cause, most donors will struggle to sign on for an out-of-reach goal.
3. Communicate. Communicate really, REALLY well.
This is the most important thing. Post on your social media feeds about your campaign during peak hours for engagement. Cross promote on the pages of other local organizations and ask your followers to post for you as well. On Facebook, links and images will help visibility. On Twitter, short and concise is vital; strive for zero ellipses! Send an email to your email list. But it’s also really important not to inundate your followers. Make sure to keep up with regular content as well to boost engagement. No one wants to evoke the feelings of resentment that arise during the NPR membership drive, so keep it positive!
Also, don’t stop online. Press releases can be really helpful, especially for innovative projects that may excite local or national support. Call people. You may even want to send a letter to certain people- though I’d advise against supporting an online campaign with an direct support mailing.
And lastly, be sure to update and thank your donors as you go. This is best done with a quality over quantity mentality, but its absolutely vital to ensuring repeat gifts.
So there you have it: answers to the most common pitfalls of crowd funding campaigns. For further reading, why not check out these awesome campaigns:
Radiotopia’s Second Kickstarter
Lovability: Condoms Marketed for Women