Crowdfunding

Recently my good friend Danny decided that he wanted to travel to Columbia and provide medical care to the impoverished, underserved communities. In order to get the proper resources to make it to Columbia, Danny has decided to use a crowdfunding service to support his goal (don’t worry, I won’t be soliciting you for donations in this post). Before setting it up and spreading the word, Danny decided to turn to his savvy CSOM friend for assistance. Sadly, that friend was busy, so Danny then asked me what to do.

My first piece of advice was obviously to leverage social media. Before spreading the word, I advised Danny to first consider what social media channels he had the largest following in while also taking into consideration what channels he was most comfortable with. Typically, Facebook and Twitter are the best platforms for crowdfunding because they reach the most people and encourage the most interactivity. Obviously, if one’s campaign caters to a more professional audience, LinkedIn is more appropriate. For Danny’s cause he will be using Facebook and Instagram because that’s where his largest and most active communities exist. Danny’s community (both digital and real world) is the most powerful asset for meeting his crowdfunding goals. His friends/followers will help him reach new audiences and drive donations. Beyond simply making a few posts on his personal page, Danny should amplify his reach by creating a separate page or group for his campaign. Pages are preferable because Facebook readily provides analytics which enable users to see their performance of the page based on likes, reach, enagagement and demographics. By utilizing Facebook Insights, Danny can determine what’s working on his page and what he needs to adjust. In time Danny will get a better feel for how he should craft appealing content for his specific audience.

Danny mentioned he had some reservations about asking for donations, saying it made him feel uncomfortable to ask people for money. So my second piece of advice was plain and simple: be shameless. People have literally billions of different options on what to spend their money on, and they won’t be willing to give him any money if he’s meek about it. The challenge becomes particularly difficult when considering that no donors will be getting anything in return for their money (other than the satisfaction of helping a noble cause). Danny has to be willing and able to effectively communicate his intentions and the value he will bring to the table. On the various crowdfunding sites alone, Danny will have to compete with campaigns aiming to restore natural landscapes, build innovative technologies or send some fratbros to the SEC Championship game.

SEC Championship

You too can help these fratbros get one step closer to having a midget serve them Natty Lite

As his campaign gains traction, Danny should ensure that he regularly engages with his audience. Beyond simple “sales pitches” asking for donations, Danny should continue to update his community on the issue he is trying to address along with updates on when his campaign hits major milestones. Of course the most important posts will be Danny thanking his contributors, as expressing gratitude is a great way to engage with his community and build a stronger following.

Finally, Danny needs to decide which crowdsourcing website is best platform for his mission. There are numerous crowdsourcing websites available, each with distinctive capabilities and resources. By far the largest and most well-known crowdfunding site is Kickstarter, which incentivizes donors by offering rewards for various levels of donations. With over 67,000 projects funded thus far, Kickstarter is capable of hosting any and all campaigns/projects. Then there are more niche crowdfunding websites such as StartSomeGood which provides a funding platform exclusively for social good initiatives, no matter if it’s nonprofit, for-profit, or unincorporated. Unfortunately, all StartSomeGood campaigns must meet their “tipping-point” in order to receive the funds. This “tipping point” is a percentage of the listed goal. Then there’s GoFundMe, which is catered to far more personal projects than business endeavors, such as raising money for a friend’s operation, providing resources for the homeless, or even crowdfunding a family vacation. Advertised as the world’s number one personal fundraising website, GoFundMe has raised over $400 million, including $3 million for the victims of the Boston Marathon Bombings. I recommended that he use GoFundMe, mostly because I think its platforms lends itself to attract additional donors that he doesn’t have the ability to reach.crowdfundinglogos

If Danny can quickly and succinctly communicate his mission and its benefits, then people will hopefully be willing to donate at least a dollar to his cause and slowly but surely he will meet his goal. Personally, I’ve only ever donated once through a crowdfunding website. For what you ask? For Super Troopers 2 of course (viewer discretion advised).

What do you think of crowdfunding sites? Are there any campaigns/projects that you’ve donated to?

8 comments

  1. Crowdfunding sites have completely revolutionized donations and the marketing operations to incite them. You give some great advice for Danny to start off and evaluate which platforms to use and how to communicate with his audience.

    One thing I always would encourage is to offer something in return, not necessarily a product or service, but a thank you or other form of social reciprocation (such being able to share that you donated to make people feel impactful). Especially if a person is invested in your cause, keeping people up-to-date and involved in the progress makes them more invested. This could be as simple as updating the Facebook page, tweeting out thanks, posting videos, images, or articles (created or sourced), and maintaining contact after the funding limit is reached and during the trip (such as a blog). This is even more important if other fundraising efforts will be made in the future.

  2. I think crowdfunding is a very interesting concept. Like you mentioned with your friend, if someone needs money to pursue a goal, they can set up crowdfunding to help them get there. I’ve had some friends do this and post it as their facebook status. I also have heard some cool stories about crowdfunding. There was a lady who made various colored handmade lamps and put them in her frontyard. Some anonymous neighbor sent her threats and told her to take them down because her lamps were “homosexual”. As a result, people in the community started a crowdfund and raised money so she could make more lamps and put them in everyones yard. Thought it was a cool story!

  3. Thank you for an great post. I think crowdfunding sites help to make dreams come true. If you had a great idea in the 80’s you only had your close circle of friends and family to solicit to. With crowdfunding you are open to the world (if you play your cards right in reaching as many people as possible). I guess if this were still the 80’s you could access a phone book and mail out pseudo personalized messages asking for funding. That seems like a daunting task compared to creating a post and strategizing a campaign on social. It is a good time for ideas to formulate into a reality.

  4. Crowdfunding is a really cool phenomenon in that it has been around pre-Internet, but socal media has made the job so much easier. I remember a painted baseball bat outside my elementary school showing how many donations were received when trying to raise enough money for a new baseball field for one of the Cape Cod Baseball League teams. being somewhat involved in various cycling and running events, it seems Facebook is the standard platform to turn to when needed to reach a certain donation level. Especially big events such as the Pan-Mass Challenge which require up to $4,000 in donations- reaching out to your network is vital!

    I also can relate to feeling uncomfortable asking people for donations. I participated in the Relay for Life at BC my freshman year. Even though it’s for a great cause, I still felt weird asking my family for donations. Thankfully, I overcame that barrier and was able to raise some money via our team page. Also, as you mention, the technological capacity makes it so much easier to get individuals to donate money. I wonder if mobile payment apps like VenMo will change behavior and encourage more people to donate due to their convenience.

  5. This past summer, I had the great experience of raising money and racing in a 100 mile bicycle event, so I understand the anxiety and challenges described for your friend. As you mentioned, to a certain extent, one must convince others their cause is more important or worthy of the donation than others; thus, it is about marketing the event well. Furthermore, I found people were very receptive when I thanked them and updated them on my race and the amount of money the entire bicycle event raised. People want to know their money is going to have an impact and expressing gratitude and showing the larger picture goes a long way. As we mentioned in class about Zuckerberg’s past philanthropic endeavors, there are far too many foundations and donations that go to waste. Glad to hear he is doing this to make a real change!

  6. Thanks for sharing! Crowdfunding has completely revolutionized the way that people collect money in today’s world and I must say, it is absolutely awesome. One of the most fascinating things about crowdfunding is its network effects. GoFundMe actually posts to social media sites that you are donating for certain causes if you so choose and shares this information to other people, creating social pressures for others to donate as well, and spreading the news about things that you are funding. Given that Danny is collecting money for a rather noble cause, I’d say your recommendation to turn to social media is absolutely spot on, and he can leverage these network effects to collect quite a sum of money. The most valuable outcome of crowdsourcing, however, is hands down the consumer-to-consumer innovation that results from it!

  7. Great post! Your advice to Danny was really insightful and a good analysis of various crowdfunding platforms. It feels like a financial petition that backs an idea/project and gives participants the satisfaction of feeling like an activist, even if it’s for a less serious cause like a party.

    At my internship this summer, one of the interns had crowdfunded her rent for the summer in order to take the job. Thought it was a super ambitious way to make sure she wasn’t giving up a good opportunity and she found that her friends supported her goals, which must have felt that much better. Thanks for sharing!

  8. Since Obama passed the Jobs Act, which allowed startups/people to solicit private donations from non-angels/VCs (now known as crowdfunding), the latter has been increasing dramatically and has adjusted the scales of power. On one hand, crowdfunding has been great because it has given individuals/startups more bargaining power and access to funds. On the other, it sometimes hurts companies by giving them more access to “dumb” money rather than investor money, which comes with access to a network. That said, I think crowdfunding has more pros than cons and in your friend’s case – it is an excellent medium to meet his goal! I absolutely agreed with all of your recommendations. The only that I might change, given that his fundraising is for a one-time trip, is to only have the destination page (i.e. GoFundMe page) rather than a Facebook page that leads to that page to minimize the number of clicks potential donors would need to get through to make the actual donations. But beyond that, great job, hope he is successful!

%d bloggers like this: