Crowdfunding is an increasingly hot topic for fundraisers. Millions of dollars are raised every year through online crowdfunding platforms, of which there seems to be an ever increasing list.
But while the surging popularity of online crowdfunding may be a recent idea, drawing on the power of the crowd to raise funds isn’t exactly a new one. In the summer of 1885, the Statue of Liberty made its journey from France to New York. The statue arrived safely, but encountered one major problem: the group raising money for the statue’s pedestal was $100,000 short of their goal.
The Governor of New York rejected the use of city funds on the project. So Joseph Pulitzer launched a massively successful crowdfunding campaign. He made an appeal on the front page of his New York World newspaper, promising to publish the names of every single donor. Within five months, 160,000 donors had contributed $100,000.
As the Statue of Liberty shows, crowdfunding offers the possibility of harnessing the power of an extremely large audience of very small donors to raise a significant amount in a short time. And the benefits go way beyond the funds raised. Crowdfunding gives you the opportunity to communicate directly with donors about an important project, raise broader awareness for your organization, and test the types of messages and incentives that best motivate your donors.
A successful crowdfunding campaign can also be a good way to prove demand and support exists for your work, which can be leveraged in your larger donation requests. For example, you can highlight your successful crowdfunding projects as evidence of community backing in your grant applications.
The Help Get Us to the Market Campaign
As part of its School Grown program, FoodShare runs a schoolyard-farming social enterprise. Last winter, the cargo van used to take the produce grown by students to the market was in an accident. FoodShare badly needed a new vehicle to bring their food to markets during the summer season. So they decided to launch their very first crowdfunding campaign.
The campaign goal was $20,000, and they successfully raised $20,201 from 229 donors. This allowed FoodShare to purchase a used, fuel-efficient vehicle plus a cargo bike and bike trailer.
Tips for Crowdfunding Success
1. Plan Ahead
To be successful, crowdfunding campaigns require a significant amount of time and effort. For the Get Us to Market campaign, FoodShare developed and implemented a comprehensive communications strategy which included soliciting media coverage, participating in and hosting public forums, open houses, and tabling at community events.
If you are thinking about crowdfunding for the first time, FoodShare recommends that your communications strategy include compelling campaign visuals including videos and photos as well as social media plans that will keep supporters interested and compelled to share your story with their broader network.
2. Establish a concrete and manageable goal
One of the reasons for the success of Get Us to the Market was that the need for a vehicle provided a very tangible product with a hard deadline. Crowdfunding to tackle a major societal problem or to provide your organization with operating support probably won’t be effective, because donors are more likely to support campaigns that have tangible goals.
3. Determine a fixed duration
One of the most common mistakes made in crowdfunding campaigns is playing it safe with a campaign that’s open-ended or at least several months long. According to Breanna DiGiammarino, Cause Director at Indiegogo, the most successful campaigns are between 21 and 40 days, because this allows you to build momentum while still maintaining a sense of urgency. The Get Us to Market campaign lasted a brief 28 days.
4. Start with your existing donors
DiGiammarino recommends that your campaign should have a soft launch, meaning that you share the campaign with your existing donors and networks first. The aim is to raise 30% of your goal within the first 48 hours of going live. FoodShare heard similar recommendations when preparing their campaign, and subsequently sought out some donations upfront before the official launch. They found that reaching out to frontline supporters to share the news and build an early foundation of donations seemed to have a real impact on the first few days of their campaign. This early support also uplifted team morale as they embarked on their campaign.
5. Don’t Overdo It
While FoodShare was blown away by the generosity of their community and will consider other crowdfunding campaigns in the future, they are weary of exhausting their donor base. Particularly as most of the donations to the crowdfunding campaign came from people who were already connected to FoodShare. The fact that their increased social media presence and media coverage did not result in a huge increase in donors who had no previous connection to FoodShare was one of the key takeaways of the campaign.