Crowdfunding has become a hot topic for many development professionals in the United States, accounting for $2.7 billion dollars raised in 2012. Estimates for 2013 were even higher. It appeals to many fundraisers because it leverages the social networks of donors to generate funding for projects and organizations. With the proliferation of crowdfunding sites and the recent success of campaigns on platforms like KickStarter and IndieGoGo, development programs in higher education are beginning to take notice. Questions persist about how the platform translates to fundraising in higher education and if it has the potential to become a sustainable addition to the tool kit of annual giving programs.

1. Using Crowdfunding in Higher
Education
What is crowdfunding and can it be
used effectively in higher education?
Dayna L. Boyles-Carpenter

2. Project Abstract
Crowdfunding has become a hot topic for many development
professionals in the United States, accounting for $2.7 billion
dollars raised in 2012. Estimates for 2013 were even higher.
It appeals to many fundraisers because it leverages the social
networks of donors to generate funding for projects and
organizations. With the proliferation of crowdfunding sites and the
recent success of campaigns on platforms like KickStarter and
IndieGoGo, development programs in higher education are
beginning to take notice.
Questions persist about how the platform translates to fundraising
in higher education and if it has the potential to become a
sustainable addition to the tool kit of annual giving programs.

3. Project Introduction
How can crowdfunding be used by higher education
institutions?
 Understanding crowdfunding principles and
practices
 Applications to donor renewal and retention
 Cannibalization of unrestricted annual giving
programs

4. Project Context and Relevancy
 UMBC launched its crowdfunding program in June of
2013.
 Development professionals in higher education are
starting to experiment with the crowdfunding model,
but its use in higher education is so new that not a lot
of research exists.
 This research will serve as a resource for
development professionals in higher education prior
to their launch of a crowdfunding project.

5. What is crowdfunding?
crowd·fund·ing
ˈ
kroudˈfəndiNG
/
noun
1.
the practice of funding a project or venture by
raising
many small amounts of money from a
large number of people, typically via the Internet.
"musicians, filmmakers, and artists have
successfully raised funds and fostered awareness
through crowdfunding"
(Oxford Dictionaries, 2014)

6. History of Crowdfunding
 Originated from crowdsourcing
 First platform launched in 2001
 Musicians and artists
 Grassroots political fundraising
• 2008 Obama Campaign
• Blue State Digital
• Raised $272 million from over 2
million, mostly small, donors
(Gerber, Hoi, and Kuo, 2013, p. 2., Howe, 2009,
and Parry, 2009).

7. Crowdfunding is Growing Fast
$5.1
Billion
2013
$2.7
Billion
2012
$1.5
Billion
2011
(Gerber, Hui, and Kuo, 2012, Jarrell, 2013,
Danmayr, 2014, and Hanselman, 2014)

8. Four Primary Crowdfunding
Platforms
 Donation
 Lending
 Rewards
 Equity
(Danmayr, 2014, and ScaleFunder, 2013)

9. Two Types of Funding Models
Threshold Model
• Funds held in escrow account until the goal is reached.
• If goal not reached, contribution is refunded to donor.
All-or-Nothing Model
• Project owner keeps all funds
raised, regardless of whether or
not the project goal is reached.
(Valanciene and Jegeleviciute, 2013, p. 41)

10. Motivations of Crowdfunding
Donors
 Digital Natives vs. Digital Immigrants
 Want to believe that their contributions matter
 Feedback loops
 Goals
 Challenged
 Specific
 Attributed to an individual vs. group
 Reciprocal relationships
 Rewards/Perks
 Wash’s Completion Bias
 Social Loafing
(Howe, 2009, p. 261, Brabham, 2013, Gerber
and Hoi, 2012, Wash, 2013, Danmayr, 2014,
and Klaebe, 2012)

11. Frameworks for Analysis
 Rosso’s Concentric Circle Constituency
Model
 Danmayr’s Archetypes of Crowdfunding
Models
 Kihlstedt’s Four Phases of a Capital
Campaign

12. Rosso’s Concentric Circle
Constituency Model

13. Danmayr’s Archetypes of
Crowdfunding
 Type of Crowdfunding Platform Offered
 Business Model
 Platform Setting
 Target Group for Platform Users
(Danmayr, 2014)

14. Kihlstedt’s Four Phases of a Capital
Campaign
 The Quiet Phase
 The Campaign Kickoff
 The Public Phase
 The Campaign Closing Celebration
(Kihlstedt, 2009, p. 178-179)

15. Methods and Context
 Developed a 37-Question Online Survey
 Emailed to institutions known to be using
crowdfunding
 Listservs
 Fundlist
 CampusCALL
 LinkedIn
 Higher Education Fundraisers Crowdfunding Users
Group
 The Annual Giving Network
 Crowdfunding University

16. Survey Participants
 University of Connecticut  Hartwick College
 Towson University
 St. Mary’s College of
 University of Bridgeport
 Cornell University

 Penn State University

 University of California,





Santa Cruz
Temple University
Washington State
University
Middlebury College
University of Maryland
Baltimore County





Maryland
St. Joseph’s College
DePaul University
University of Queensland
Augsburg College
Worcester Polytechnic
Institute
University of Cincinnati
Salem College
Anonymous

17. Results & Findings
 Institutions were motivated to explore
crowdfunding:
 To drive alumni participation rates
 To engage student and young alumni donors
 To explore all available revenue streams
 To be more donor-centric and to connect donors
with their impact on students
 To build a culture of philanthropy

18. Results & Findings
When did your institution first launch its crowdfunding
platform?
2010
0%
Other
10%
2011
5% 2012
5%
2014
35%
2013
45%

19. Results & Findings

20. Results & Findings

21. Rosso’s Concentric Circles
Constituency Model Applied to
Crowdfunding
(Adapted from
Temple, Seiler, and
Aldrich, 2011, p. 20-21)

22. Danmayr’s Archetypes of
Crowdfunding Platforms
 Crowdfunding Types
 Most colleges and universities are using a donation-
based model
 Others use hybrid approach with rewards-based
model
 Business Model
 Crowdfunding Platform Setting
 Target Group
(Danmayr, 2014)

23. Crowdfunding as an extension of major
gifts?
Planned or
Principle Gifts
Major Gifts
Annual Giving
Crowdfunding
Prospects
(Adapted from Temple, Seiler, and
Aldrich, 2011, p. 45)

24. Capital Campaigns
(Revisited)
 The Quiet Phase
 The Campaign Kickoff
 The Public Phase
 The Campaign Closing Celebration
(Kihlstedt, 2009, p. 178-179)

25. Crowdfunding and the Millennial
Generation
 Will inherit $140 trillion between now and 2052*.
 Respondents shared a goal of engaging younger
and recent graduates.
 15/20 respondents were using crowdfunding to
help support student organizations and grassroots student-generated programs.
 Passionate about causes, not
necessarily about organizations
or institutions.
(GiveCorps, 2014)

26. A fully integrated approach
 Don’t count out traditional vehicles
 Direct mail
 Calling programs
 E-solicitation
 Crowdfunding as online giving page
 Replacement for PURLs
 Giving Days or Challenges

27. Perks & Incentives
 Contributors are attracted to projects offering




tangible products and services.
Sixty-five percent of respondents were not
offering perks or incentives.
Fair-market-value
Management
Experiential vs. Tangible

28. Recommendations
 Define Your Campus Needs
 Build an Army of Advocates
 Educate Project Owners
 Identify the Project Crowd
 Define a Timeframe
 Plan for Success
 Utilize Metrics
 Stay Flexible

29. Cautions
 Crowdfunding should not replace traditional
annual giving strategies.
 Oversaturation of constituency.
 The dangers of third-party sites:
 Hard credit vs. soft credit vs. no credit
 Loss of brand control
 Proliferation of start-ups
 Crowdfunding is not just for young people.
“Crowdfunding is not a silver bullet .
. .”
(K. Williams, personal
communication, 2014).
(Greenberg, personal communication, 2014 and
McDonald, personal communication, 2014)

30. Conclusions
Crowdfunding in higher education can:
 Help drive alumni participation rates
 Broaden fundraising constituency bases
 Serve as a lead generation and data capture tool
 Educate students and young alumni about the
impact of philanthropy
 Provide a seamless experience for newly acquired
donors as they transition to be long-term and/or
major gift donors

31. For more information, please contact:
Dayna Carpenter
Director of Annual Giving, UMBC
410-455-3377
dayna@umbc.edu
www.linkedin.com/in/daynacarpenter/
This presentation was submitted as partial completion of the requirements for the MS in
Strategic Fundraising and Philanthropy degree program at Bay Path College.

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