I know that my readers have eagerly awaited the next post in my Create Your Own Project series. Well, you are in luck! Today, I am here to write about a very popular fundraising tool that can be both wildly successful and embarrassingly abused. If you look up the definition of crowdsourcing, you will find something along the lines of, "obtain by enlisting the services of a number of people, either paid or unpaid, typically via the Internet." This simple idea eventually grew into crowdfunding, a way to reach out to many people for financial support via service websites. If you haven't heard the term crowdsourcing or crowdfunding, I am sure that you have heard of Kickstarter, Indiegogo, GoFundMe, and RocketHub. These are four very popular sites that any accidental (or quite intentional) entrepreneur can use to raise funds for everything from products to projects or to pay substantial medical bills or salvage financial emergencies. How does one go about running an effective campaign to raise financial resources for a project?
(Please take a moment to look at my own example on RocketHub and consider donating to my global dance storytelling project, "Core-ography," by clicking here)
Should I go the crowdfunding route?
One of the biggest downfalls of crowdfunding is that it quickly became an exhaustively saturated platform to raise money. Thousands of people have innovative thoughts and concepts every single day. Some of these people dream of making these innovations a reality. When the urge to create strikes, one needs to be realistic with themselves. Is this passing inspiration or is it something which you are really prepared to fully commit your energy?
Too often I see people with great (or less than great) ideas who create a Kickstarter campaign on a whim. They've put some amount of thought into their wishes and dreams, but very little preparation or hard work into the process that is necessary to be successful (like a business plan, budget, mission, target market research, audience, donors, etc.). I've seen campaigns seeking complete and total funding to start one's own business from the ground up. I have seen campaigns asking in upwards of $70,000 to fully fund one's new startup. When I see people asking the public to hand them a no-interest, no-effort gift, I feel hints of embarrassment that they assume people like them so much or think their idea brilliant enough that people will just throw money at them. In these cases, I'd suggest going to a bank and asking for a loan.
My best suggestion here is to tell you to take a moment before you go the easy road to success and consider whether you are being rational in jumping into your campaign. Chances are that your integrity and intentions will be put on display in your first foray into crowdfunding. And if you look greedy and lazy in your first campaign, it will be difficult to regain public trust for any future campaigns. Take the time to do your research on your project/product. Are you truly being innovative? Are there better ways to secure financing? Are there multiple avenues to approach funding your project? Have you done any budget research to assure it is realistic? Check all of these items off your list and, only then, see where a crowdfunding site may fit. Perhaps, like me, crowdfunding isn't your initial destination to seek support.
To finish up this section, I feel it is really important to be acutely aware that most people can see right through a crowdfunding campaign. Whether one chooses to be transparent or not, most potential donors can easily determine whether your ask is a well-conceived idea or a lazy approach at getting free money from people. You need to show that you are willing to put out an effort equivalent or greater than the gracious donations of your supporters.
How do I choose which crowdfunding site to use?
So, you've put a lot of thought into whether crowdfunding is the appropriate route and you've decided that all systems are a go. There are a handful of different sites to choose from and, for the most part, there are only minor differences between each individual service.
|My "making-a-decision" face?|
The most popular site to raise crowd-sourced money is Kickstarter, likely because it was first to break into the mainstream. Here is a great article produced by the Foundation Center (the best place to search for grants of all kinds - thanks Chris Rudd) that shares different criteria to consider when considering the best platform for your project. Each of these sites has a different look and a unique format, so it really comes down to preference when looking at their templates.
What is most important when considering a crowdfunding platform is the fees. There are generally two fee scenarios for a majority of these sites. These companies are providing a service for any entrepreneurial soul to seek funding, so they deserve payment for providing their services and for funneling donations back to you. The two most common fee types that you will find are either an all-or-nothing approach or flexible-funding that allows more leeway if you don't meet your goal.
The all-or nothing setup means that you either reach your goal and receive funding for your ask or fall short and get nothing. Essentially, this system is put in place to encourage fund seekers to project realistic fundraising goals. As I stated earlier in this post, I've seen crowdfunding projects with unrealistic goals fail so badly that I actually felt a hint of embarrassment watching the entrepreneur reach 3%-10% of their goal in the entire month of their campaigns. They had asked for such an exorbitant amount of money that it was clear to everybody except themselves that they weren't being realistic. Beyond that, they had shown no effort on their side other than putting together a project page. The plus-side of using an all-or-nothing approach to your fundraising campaign is that, if you are successful, you get a smaller percentage taken out of the money you raised when it is funneled back to you. For these websites, I have seen fees charged in a general range of 4%-7%. In other words, if you raise $100, the service will take $4 to $7 of what you raised.
The second type of fee charged for these services is typically called flexible-funding. This works with two possible outcomes of your campaign. Either you reach your goal or you don't. If you reach your goal, then you are charged a lower percentage similar to the all-or-nothing approach. If you miss the mark, then a larger chunk of the pie is taken out of what you raised. I have seen these charges range anywhere from 8%-12%. These higher fees are used as a deterrent to those setting unrealistic goals. In this situation, you need to determine if it is more important that you receive a larger chunk of the money you raised (and you are absolutely confident you will reach your goal) or if you are comfortable taking the risk of not meeting your goal but still receiving a (smaller) portion of the monetary reward of your efforts. Some platforms force you to make this decision at the launch of your fundraising, while others will wait until the end of your campaign to see whether you met goal or not.
Another item that you must consider when determining your fundraising platform will be your time frame. Some sites only allow you to hold a campaign for one month, while others will allow you to fundraise for anywhere from 30-90 days. If you feel a longer campaign may benefit you, this may be a determining factor. But keep in mind that the longer your campaign runs and the more often you post about your fundraising, the more desensitized and annoyed your audience may be with your ongoing sales pitch.
Lastly, if you want to offer tax-deductible donations as a part of your crowdfunding campaign, you need to check in with your fiscal sponsor to see if they have a required platform, different fee schedule, or approval period. In preparing my fundraising campaign for my upcoming Core-ography project, I was required to use RocketHub's platform. I also had to seek approval from New York Live Arts before RocketHub would allow my project page to go live.
How should I go about creating my project page?
In developing my fundraising campaign, there were many things to consider. I really appreciated the template that RocketHub provided for me to set up the details of my project, my background information, rewards for donating, and further items.
I started putting my project page together by placing and editing the description of Core-ography I had already developed when applying for fiscal sponsorship, grants, and scholarships. From here, I wanted to create a few topics for the body of the project page that felt relevant to share with potential donors. This will be different for each and every person. One thing I have learned is that you need to provide enough details to give a clear picture of your end goal, but be brief enough that those potential donors with limited time don't give up on reading about your project. It's a finely tuned process.
The content that I included in the body of my project page includes a description of my project, a statement explaining "why you should donate to Core-ography," a list of items that donations will be used towards (budget), the Core-Artists who will take part, and my qualifications to make this project a reality. Each of these items offer something unique. Aside from the project description, I am hoping to build trust and purpose in order to build a bond with my audience and make my work relevant to them. Core-ography does matter to more than just me, but I need to cultivate interest and relevancy. I also included some details about my budget. This way donors know where their money is going and trust that I have already planned where funds will go? Lastly, I felt it was important for donors to know the artists that they will be supporting and their qualifications? All of these seemed like questions I would ask somebody before giving them some of my hard-earned money. So, I went ahead and answered these questions ahead of time.
Perhaps, the most taxing part of creating my page was determining the scaling of donation levels and the rewards that would be offered for giving to our campaign. The challenge was in finding perks that were realistic and affordable, yet meaningful and worth their value. I suggest opening options for people of all walks of life to donate. I find simple delineations at $10, $25, $50, $100, $250, $500, $1000, $2000, etc., are the best way to go. For my campaign, I decided to add one more category at $175 to allow a smoother jump from $100 to $250. Having this many options allows for those that want to give but have little expendable income, as well as those that are more secure in their finances. Unless you are capable of providing rewards where you can pay for shipping, travel, or products, it is best to keep your offerings reasonable. For instance, I am offering recognition in credits of our videos and a personalized thank-you for lower level contributions and Skype sessions or signed shoes from our Core-Artists for higher level giving, among many other options.
Now, if you have ever taken a look at any crowdfunding project, you know that the one necessity for any campaign is a quality video speaking about what you are creating and your intent for the funds you are seeking. It is important to put a face to your campaign. I found that putting together my ask video was the most fun, yet tedious aspect of producing the project page. If you don't have high-quality film equipment, do your best or ask a friend for help. I filmed my speech using Photobooth on my Macbook Pro and spoke right into my computer screen. I found that it was easier for me to speak each paragraph and then edit them together, instead of trying to nail the whole speech in one fell swoop. Plus, giving this speech in my city apartment presented many challenges with noise being recorded from the streets outside my window. Also, an audience doesn't want to stare at a talking head for a few minutes. So, be sure to add images and footage into your videos. This will also help with the edits you will need to make inbetween your transitions of your speech. If you do choose to go ahead and use some music in the background make sure it is either extremely relevant or quiet and lacking any acoustic distractions.
Who should I ask to donate to my campaign?
The best thing about crowdfunding campaigns is that you can ask anybody you know to donate, from personal contacts to acquaintances on your social networks. Previously, I mentioned a range of monetary amounts to ask for and the appeal to donors of all walks of life. So, at this point, you can send out your campaign to whomever you feel comfortable. Send out personalized emails to those that you think can make a larger donation. Post on your social media pages. Ask your friends and colleagues to share your campaign.
Do whatever you feel is necessary to meet your final fundraising goal. Don't be shy, but be conscious of your campaign. Keep in mind that there is a fine line between getting people's attention and reminding them versus trolling your contacts and ignoring any social protocol whatsoever. Scrutinize the response that you get to your campaign and fine-tune your approach on a daily basis (don't be afraid to lay off selling your campaign for a few days). Personally, if you ask me to donate to your crowdfunding campaign once, I will consider it. If you check in with me a week later, I may welcome the reminder. But if you check in with updates every other day, I will probably ask you to take me off your list. Be socially conscious in this greatly over-saturated market.
|Jackie McConnel in "Basic Disaster" - National Choreographers Initiative 2014 (Photo: Dave Friedman)|
Thank you for reading and for the support I feel from you all with every post that I write and share! Cheers!