Crowd Funding 101: A Roadmap for Success
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Are you a nonprofit mystified by crowdfunding? This presentation provides a simple and easy methodology to help you master the art of successful funding via the various crowdfunding platforms.
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Crowd Funding 101: A Roadmap for Success
- 1. Crowd Funding 101 A RoadMap for Success @susanmcp1 November 10, 2015
- 2. In 2014, Forbes reported that 30% of the $5 billion raised through crowd funding over the course of a year went to social causes. That’s $1.5 billion. And the numbers continue to grow.
- 4. Crowd funding is a major opportunity – but you have to be smart about it.
- 5. Have you ever done a crowd funding campaign?
- 7. Indiegogo
- 8. Crowdrise
- 9. Causevox
- 10. Kickstarter
- 11. Razoo
- 12. The elements of a great campaign
- 13. Focus on a specific project
- 14. Be realistic about your goal
- 15. Tell an awesome story VIDEO
- 16. Story: Overcoming the Monster VIDEO
- 17. Story: Rags to Riches VIDEO
- 18. Story: Quest
- 19. Story: Tragedy
- 20. Your favorite crowd funding story or campaign?
- 21. Be Rewarding
- 22. Plan, plan, plan
- 24. Build momentum – keep it going.
Editor's Notes
- Explain why crowdfunding can be so powerful. How many of you have engaged in a crowdfunding campaign? Personally or your nonprofit?
- Touch on personal story – explain why you did this campaign, power of crowdfunding
- Emphasize that you have to be prepared, do your research – not every campaign is successful and it
- Open question to crowd
- We’ll begin by diving into the platforms available – all about picking the one that’s right for you. HubSpot suggests asking these questions. Who uses the platform? Whether it's individuals, nonprofits, schools, or businesses, you want to use the platform that is going to fit your needs. Leading by example, most platforms highlight who is the best fit for their platform with featured stories and case studies. Be sure to review these in your evaluation process. What is the pricing structure? Make sure to evaluate each platform's pricing or request more information if it's not available online. Some platforms have monthly or annual fees, and additional payment processing fees. Be sure to do your due diligence to compare and contrast pricing packages and pick one that fits into your budget. What features are included? Whether it's peer-to-peer fundraising pages, event ticketing and registration, or CRM integrations, make sure to review all features offered and find the platform that best fits your fundraising needs, not necessarily the one with the MOST features. Think less is more in this scenario if you're just getting started with crowdfunding.
- Indiegogo is a crowdfunding site for a variety of businesses and individuals, but also with a dedicated category to verified nonprofits looking to fund their campaigns. These campaigns would be considered grassroots, including disaster relief campaigns like that for Hurricane Sandy or the Restore the Shore campaign, which raised $1.04 million. Pricing: Indiegogo has specific pricing for 501(c)3 nonprofits, which is 25% less than the general platform pricing. To use the platform the fee is 6.75% of your campaign versus the 9% for for-profit campaigns and an additional 4% for payment processing fees. Bonus: If you reach your goal, Indiegogo will “reimburse 3.75% of funds raised as an additional discount, so that your net Indiegogo platform fee is only 3%”. This is a great incentive to promote your campaign and hit your goal.
- Crowdrise is a crowdfunding platform focused on empowering the fundraiser. They are going right to the source of the crowdfunding and empowering individuals that may or may not have ties to a nonprofit to start a campaign. They have a focus on endurance event fundraising, including a place to browse events, including the New York City Marathon and 2013 Spartan Races, and to fundraise for or give to those events. Pricing: Crowdrise has a tiered pricing structure, with a free basic account and subsequent packages with monthly fees between $49-$199 per month and payment processing fees between 3-5% with additional credit card processing fees.
- CauseVox is a platform tailored for nonprofits and social good projects. . You can customize your donation page using one of the pre-made templates or by creating one of your own. Boasting the ability for non-profits to easily change the look of their fundraising page without a developer, CauseVox makes it easy to embed multimedia – like videos or Flickr slideshows – just by pasting a link. Special Plan for Nonprofits: CauseVox is designed with nonprofits in mind and offers design help as well as 24/7 customer support. Cost: CauseVox offers pay-as-you-go plans. There's a free trial plan that waives CauseVox's monthly fee (if applicable) until you raise $5,000. Once you surpass the limit, you will be given an option to transition to one of the plans.
- Perhaps one of the most buzzed about crowdfunding platforms, Kickstarter is a way to fund projects. It’s open to project-makers of any kind, but Kickstarter makes clear that it is about funding for projects, not charity or cause-related fundraising. Cost: This is an all-or-nothing platform, meaning that if you don't meet your fundraising goal, you don't get to keep any of the donations. If, on the other hand, you succeed in raising the funds for your project, Kickstarter will charge a 5 percent fee on the amount collected. Nonprofit Success Story: Ushahidi, a nonprofit headquartered in Kenya, used Kickstarter to launch production of BRCK, a Wi-Fi router and mobile modem built to withstand the elements. Kickstarter might be a bit of a gamble for nonprofits. Unless you have a very compelling project that already has generated a lot of interest, you might not want to invest in a Kickstarter campaign (especially since you won't be able to keep the funds you raise if you fail to meet your stated goal). On the other hand, because Kickstarter is so popular, you might be able to garner a lot of press or attention for your campaign. Make sure to review Kickstarter's guidelines, as the platform has been known to pull campaigns for not conforming to its criteria.
- Razoo has raised more money as a nonprofit platform than Kickstarter and Indiegogo two combined, and it isn’t restricted to project-based funding. But it can certainly be used that way, as Razoo lets any nonprofit create project-specific fundraising widgets. You can offer rewards just like the other platforms and the costs are lower by half or more, but you do lose the visibility of being on the cool-kid-on-the-block site. If you have your own large-scale reach, this shouldn’t matter, but if you’re hoping for a bump from high traffic on one of these sites, you may want to pay extra to use one of the others. **ASK PEOPLE IF THERE ARE OTHER PLATFORMS THEY”VE USED – WEFUND is a large one as well
- Not always, but generally speaking, Crowdfunding tends to work best when there is a particular project or cause at stake. People like the immediacy of giving five, ten, or twenty-five dollars to one specific need. Share examples of what this could mean (creating a new product/ a specific event/ launching a new arm / getting X many kids into school/ paying for the medical expenses of a single kid / ending a current problem) The example here was a hugely successful campaign around building a new tesla museum.
- Your goal aligns your team and supporters with your crowdfunding campaign. You have to find a balance between what is within reach and what is an aspiration. If you’ve fundraised online before, ask yourself a few questions to get a baseline of what is achievable. How much have we raised online in the past year? What is the average amount that we have raised in a campaign or event? What is the average donation amount online for us? (it’s $88 for in crowdfunding) If this is your first time with crowdfunding, you can ask yourself: How much do I need to make an impact? How much does the product or service that I want to create cost? How much did similar crowdfunding campaigns raise?
- The most valuable aspect of crowdfunding is actually getting the story out there – it’s what differentiates you and draws people in. It should be personal, engaging and authentic – not corporate. A big part of this is the video. Remember that your video doesn’t need to be perfectly produced. It just needs to tell your story. Make it 1-3 minutes and be sure it converys your goals and intentions. The first ten seconds of your video count. First impressions are everything. The story Rob Wu, CEO of CauseVox, recommends thinking of your story as a Hollywood movie and following one of these storylines, which we’ll talk through in the upcoming slides.
- Overcoming the monster – Similar to James Bond, Batman, or the Avengers, you can show your organization overcoming a villain or some form of adversity. For example, Earthrights International fights against corporate human rights abuse. They raised $20,000 with this storyline.
- Story: Rags to riches – Like Chris Gardner in Pursuit of Happiness, showcase your organization or individual(s) transitioning from a low to a much better place. For example, Project Renewal helps homeless people get off the streets. They showed Harry Dickerson reclaim his life from homelessness on their Giving Tuesday campaign and raised over $70,000 with this storyline.
- Quest – Like Lord of the Rings, tales of a dedicated group of people who encounter perils along the way to reach an ambitious goal can be highly engaging! This storyline is best used as a part of peer-to-peer fundraising, where the individual can share their story. For example, a group of friends shared stories of their beard-growing journey to raise funds for breast cancer research. They raised $28,000.
- Tragedy – In Breaking Bad, Walter White dives into the world of making meth. He falls into something bad and gets more and more evil each day. You can focus on the negative as part of your storyline. For example, the CEO of CauseVox raised $120,000 for Japan disaster relief by showing how the tsunami destroyed cities and displaced communities.
- Open up to audience
- Rewards are items, recognition, or a service that you’ll get for contributing a crowdfunding campaign. They are also known as perks or gifts, and are used as incentives to motivate people to support a campaign. Surprisingly, research has actually shown that rewarding donors can cut donations in most situations. The reason? Donors that received a gift, felt selfish, which in turn reduced the motivation for giving. The best solution here may be to focus on impact-focused rewards. Impact-driven fundraising gifts are an all-around win-win because it matches both the donor’s motivations to give and the tangible impact on the one who received it. Think: hand-woven scarves by the community you’re donating to or “You’ve helped donate 10 books.” That said, there are some cases – especially when you’re trying to recruit new donors – that call for a more traditional award structure. WE CAN BE HEREOS example (explain) -- Answer the call today to help take on the hunger crisis. You’ll get comic books, lithographs, props and more from the creators behind Batman, Superman, Wonder Woman, Green Lantern, Green Arrow, the Flash, Aquaman and Cyborg. You can only get it right here. Get it before it’s gone, because each hero will only be here for one week.
- Just having your crowdfunding campaign up won’t do anything. This is a full-fledged campaign and you have to think of it as so. (Susan, talk about your experience here – you need social marketing, email marketing, make lists – who will help you promote? Who will donate? Who might help you fundraise? You’ll want to share different messages with each of these lists. Get your copy, your design, your schedule in place.
- Once you’ve identified who will be your promoters, fundraiser and donors, give these people the tools they need to help share and promote the campaign, from day one and throughout. Also think about the partners and organizations that can help you get the word out. (talk about your experience doing this and what worked/what didn’t)
- The crowdfunding campaign doesn’t stop on day one. Keep thinking of ways to get people excited, even after they’ve donated – send updates about progress, re-send sharing asks, etc. Send thank you notes – tag people on social media. Then Use crowdfunding to mobilize a larger crowd of support, which, in turn, can broaden awareness and build momentum for a particular cause. The Allstate Foundation Purple Purse Initiative, a campaign by the Allstate Foundation to bring domestic violence and financial abuse out of the shadows, is one recent example. The initiative launched a nationwide campaign on Crowdrise during a single month as a way to encourage organizations to extend their reach and to bring greater attention to the movement to end domestic violence. Crowdfunding can be an amazing way to get new donors, raise money and engage your audience – but you have to keep that momentum going.