3 Keys to Crowdfunding
The Internet has forever blurred the line between consumers and creators. And now with people more connected than ever, it’s gone one step further by allowing consumers to act as investors, helping to support the work of others with just the click of the mouse.
It’s called crowdfunding: the collection of small donations pooled to fund otherwise expensive efforts. It’s a fundraising strategy made effective with the help of social media networks and sites dedicated to connecting the ideas of artists, writers, start-ups and nonprofits with individuals willing to support them.
Last year, crowdfunding platforms were responsible for raising nearly $1.5 billion and funded more than 1 million campaigns, according to a May report from Crowdsourcing.org.
If you’re a budding entrepreneur or artist, here’s some advice on how to ride the crowdfunding wave and raise some cash:
1. Be Realistic
Perhaps the best thing you can do for a successful fundraising campaign is to set a feasible goal and deadline. Sites like Kickstarter have all-or-nothing provisions that will return pledges if you don’t meet your goal, so plan for success by taking inventory of your needs. Make cuts where you can while still covering the basic needs of your project.
2. Match Your Project With the Right Site
There are tons of options if you’re looking to get a bright idea off the ground, but many of the 150 platforms analyzed by Crowdfunding.org specialize by type of project. Petridish for example exists for research scientists, Razoo is exclusively for registered nonprofits and charities and for entrepreneurs there’s Rock The Post. Most of the sites operate the similarly. You post information about your project along with fundraising goal then share it through social media and wait for support to start rolling in. For their help, the sites collect a small commission (usually less than 5%) but offer easy-to-use tools to give and receive donations. Inc.com, Forbes and Mashable all have handy lists of crowdfunding sites with brief comparisons to begin your search.
3. Engage Donors
In crowdfunding your project, the sky’s the limit if you have a solid game plan. Donations could come from your best friend or a perfect stranger in any amount. For maximum exposure, share as much as you can about your project. On Petrdish, researcher Erica Hermson needed $2,500 to study the best method to lure wild cheetahs. Hermson exceed her goal by more than $700 by outlining her project, detailing why it matters, potential discoveries, how the money would be used and a little about herself. This engaging strategy allowed donors to be a part of the work. Consider these questions in your fundraising. For a bonus, create updates throughout the process with creative videos or messages to energize your backers.
Photo Courtesy, Tax Credits.
