The Grant Writing and Funding Coach

Chapter 6

Crowdfunding Your Idea

The desire to help and create a social balance thrives in a healthy portion of the population. My guess is that most people reading this book have participated in some cause-based activities, have helped coordinate, or invested time, energy, and money into them.

This desire to help sparks creative ideas to generate quid pro quo opportunities with swaps, exchanges, and currencies. Our drive to improve aspects of life is evolving at light-speed today. Though the methods and reach of how to fundraise are expanding, the principles remain the same.

The promising aspect of these efforts’ success is the restorative power people feel from knowing they’ve played a part in advancing everything from healthcare to stream restoration. The process draws people together and provides solutions to problems that they could see, that were too big to tackle on their own.

Crowdfunding is the online version of passing the hat in the offline world. One of the best examples of early crowdfunding was in New York in the summer of 1885. Rodrigo Davies, researcher at the Center for Civic Media at MIT wrote a 2013 BBC News Magazine article, “The Statue of Liberty and America’s crowdfunding pioneer,” about Joseph Pulitzer.

Davies explained that New York needed money for a plinth for the Statue of Liberty, a diplomatic gift from France. The American Committee of the Statue of Liberty had fallen short in fundraising, and New York Governor, Grover Cleveland rejected the use of city funds. Davies wrote, “It seemed as though New York had run out of options when renowned publisher Joseph Pulitzer decided to launch a fundraising campaign in the newspaper, The New York World.”

The campaign was a success in only five months. Davies continued, “The campaign eventually raised money from more than 160,000 donors, including young children, businessmen, street cleaners and politicians, with more than three quarters of the donations amounting to less than a dollar.”

People in the crowdfunding industry consider this one of the first crowdfunding campaigns, because it used newspaper media and massive numbers of small contributions to fund a discrete project.

Moving into the twentieth century, Canadian athlete, Terrance Stanley “Terry” Fox, aimed, in his Marathon of Hope in 1980, to raise one dollar from each of Canada’s then 24 million people for cancer research. His heroic cross-Canada effort planted the seeds for the annual Terry Fox Run, now the world’s largest day-event fundraiser for cancer research.

Taking these giving tendencies, ideas, and traditions and plugging them into the socket of today’s expanding technology and Internet connections gives us a world of options.

1. Crowdfunding Background

Our historic tendency to crowdfund now has a cyber-freeway which allows us to speed up and increase our cumulative power. It’s growing, morphing at light speed on the Internet. The people leading the industry are innovative entrepreneurs and there’s enormous potential for funding for social change. You can find industry statistics on the National Crowdfunding Association (US) (www.nlcfa.org) and the National Crowdfunding Association of Canada (www.ncfacanada.org) and the UK Crowdfunding Association (www.ukcfa.org.uk) sites.

In the span of time that I’ve researched and written this book, the crowdfunding freeway will have grown and changed even more. The freeway is massive. Individuals, corporate, and not-for-profit entrepreneurs are building new roads every day. Along this thoroughfare there are vistas for people gathering support for life-threatening illnesses, natural disasters, and all levels of global need.

Writers and artists are gaining funds for working retreats; crowds support people they don’t even know in reuniting them with loved ones in other countries. Some of the more sublime efforts include a crowd helping to fly a family’s Chihuahua, lost during a hasty move, to Tokyo. Zack Danger Brown’s famous Kickstarter.com campaign brought in more than $50,000 to make potato salad. There are many excellent platforms from which to choose, Indiegogo, Kickstarter, RocketHub, FundRazr. As a customer of these sites, you’ll want to make sure you’re choosing what’s right for you.

2. How to Get Started as a Newbie Online Crowdfunder

No matter your goals, you need a vehicle to get you into the flow of traffic on the crowdfunding freeway. If you’re fundraising for a nonprofit or community organization, you’ll need checks and balances and you’ll want a smooth ride to navigate away from the off-ramps of iffy systems.

For someone like me who normally works with clients with small staff teams, crowdfunding offers a miracle of tech support for getting the message out there.

I’ve done plenty of on-the-ground fundraising and grant writing. However, I hadn’t tried out crowdfunding because, working with a client’s campaign is different than asking people to support the potato salad I’m making. I generally deal with people who have plenty of checks and balances and who are fiscally conservative. There are many questions to ask.

Writing this book was the perfect opportunity to ask those questions and go through the newbie steps of getting into crowdfunding. On-the-ground fundraising requires steps, measures, reporting, acknowledgement, and transparent procedures for nonprofits. The same procedures should apply for crowdfunding.

I needed to find the right vehicle to get on the road. There were thousands of vehicles, or platforms, from which to choose. So, how was I going to find what was right for my clients?

Here’s how I started:

• I began by exploring any reviews professional organizations I belong to have written about crowdfunding platforms.

• I checked with colleagues who may already be using a platform to get their feedback on the pros and cons.

• I reviewed crowdfunding associations including the US-based National Crowdfunding Association, the National Crowdfunding Association of Canada, and the UK Crowdfunding Association. These sites discuss industry standards, best practices, and have excellent tutorials, current stat reports, and interviews. They also provide great links to informative videos and interviews with leaders in the industry.

From this research, I narrowed my search down considerably but there were still hundreds of choices.

3. Crowdfunding Online: Getting Down to Clean Lines

I’m going to talk about cars for a second, because, stick with me, it has something to do with how I ended up with a “best fit” for crowdfunding.

One of my most memorable experiences as a child was visiting a Ford dealership in New York with my father to look at cars. I recall the feeling I had the first time I saw the beautiful, clean lines of a Thunderbird. There I was, a seven year old, looking at a complex machine pared down to something that presented fine and fast potential for the trip across country we were about to take.

“Sleek,” the salesman called the T-Bird, and my father nodded. I knew from the looks on their faces that they had car-culture respect for the engine under the hood that ran this machine. For a few moments, they let me sit in the T-Bird and I passed my hands over the piped upholstery.

I realized that Ford had carried the quality and clean lines of the exterior to the interior fixtures, upholstery, and dashboard. It was a revelation for me and my first understanding and emotional response to a concept branded years later as a value-driven product.

My father ended up buying a family-style sedan that day, a different model. Knowing him, he’d done his homework and believed in the product. Nevertheless, the same quality and intention of the company carried through in the sedan and it served my family well.

In reviewing crowdfunding for this book, and in embarking on a crowdfunding campaign for a client, I’ve been looking for those same exterior and interior clean lines and quality.

Why? Because any donor who is serious about clicking on “contribute” to invest in your cause wants the same quality assurances that your project is value driven and has integrity. Any nonprofit embarking on a campaign needs the same. Also, quality and longevity are the constants here, not the technology itself. No matter how much technology changes, what will remain in ten years’ time will be the same need for transparency and the ability to make the tax people and donor happy.

Donors want assurances that you’re legitimate, that their information is safe, and that payment will be acknowledged and used by your organization appropriately. You can’t do this all on your own. The crowdfunding platform you choose has to understand nonprofit business and help you to meet the same payment privacy, transparency, accountability, and acknowledgement criteria that a nonprofit organization is required to provide to government bodies, funders, and their constituents.

If you’ve had a chance to look at crowdfunding platforms, or their reviews, you’ll know that there are a confusing number of makes and models from which to choose. A colleague asked me one day how to choose because, “There are a cajillion out there.” People are raising billions of dollars.

It’s exciting, creative, fun, and appears to be a virtual dream-come-true for everything your organization could ever desire. Some call it democratic. It’s open to all ages and has proven to have enormous opportunities for greater good.

However, let’s face it, there’s also potential for not-so-greater good on the platform and participant side. So how do you sift through this mountain of information to find a sound vehicle? What fits your long-distance needs, is good on gas, and can anticipate change in the future?

When I began to search for a quality platform for a client, the opportunities seemed to be endless.

After gaining a general knowledge of the industry, I decided the only way I was going to be able to make a decision to suit my clients’ needs was to refine my search even further.

Using the experience I gained from looking at the Thunderbird with my dad, I created a checklist of five “clean-lines criteria” in which the needs of the nonprofits with whom I work would drive my platform choice. This gives me a constant standard, no matter how much the industry changes.

4. Clean-Lines Criteria for Choosing a Crowdfunding Platform

Here are my clean-lines criteria for choosing a crowdfunding platform:

1. The exterior design, reputation, and industry recognition of the platform conveys quality and integrity to a donor.

2. The internal integrity matches the exterior quality with excellent technology, easy-to-understand setup, an accessible team that understands the nonprofit sector, and a system that meshes with existing social media.

3. The platform offers solid payment privacy, transparency, accountability, and donor acknowledgement functions.

4. The options and solutions provided by the platform reflect an awareness of government reporting requirements for social enterprises and nonprofits.

5. Numbers one through four narrow the field down: Now you can view YouTube and social media interviews of founders and staff because of one final clean-lines criteria to add. The platform’s leaders and team have the optimism and creativity to go the distance in the growing crowdfunding industry, and the agility to stay current as it changes.

I added the fifth point because crowdfunding requires time, people, and money investment. My goal is to develop an enjoyable, long-term relationship with a platform that stays current and user-friendly.

Speaking of raising money, on an online crowdfunding platform, you’re also paying out, on average, 5 percent of the donations to your provider. I think of this as an investment. It’s working with an extended creative support team with whom you have a mutual-benefit arrangement. For what you receive, it’s a good investment.

There are many quality platforms from which to choose. For the purpose of my going through the newbie process, I chose one of the platforms that met all five of these criteria and more. FundRazr.com, based in Vancouver, British Columbia, and launched in 2010 by CEO Daryl Hatton, struck me as the right fit for my client.

FundRazr established a partnership with PayPal early on and was also one of the first platforms to set up a system that can be embedded into social media. So, if you’re already using social media, you can link your updates and posts directly into that system and members and followers can spread the word through their communities.

They have excellent information sheets, tips, and videos, and a responsive support team. In fact, their team was so responsive that I was surprised when Hatton contacted me and I was able to ask a few questions about future opportunities he might see on the horizon for nonprofits as the crowdfunding industry grows. FundRazr’s Crowdfunding Success Guide can be found at: https://fundrazr.com/pages/pdf/fundrazr-success-guide.pdf. It is quick and easy to set up.

Another dimension of FundRazr that I found beneficial, because I enjoy working with rural communities, was the company’s awareness of the potential for grassroots partnering and its collaboration with InvestLocalBC, a Community Futures-led program which is an outreach program of the Canadian federal government. This program is restricted to Canadian causes, however, there are likely similar programs in other regions and you can look for them by contacting platforms such as FundRazr.

No matter what your location, take a look at how much the platform is putting back into the community; it might make a difference to you.

There are many excellent platforms that you can explore with the clean-lines criteria. I’ve used FundRazr as an example because I can say I’ve tried it, it works well, and I know I’ll use it for other campaigns.

To try this out, I set a goal for an organization with which I work to raise $5,000 for a roof project. This is a relatively small amount compared to some campaigns, but as a friend who regularly works with millions in projects once said to me, “The principles are the same, you just add some zeros.” You might also want to double your number of bookkeepers and accountants.

The campaign I created with a client and FundRazr began on July 7. By August 23 we had reached our goal. More than half of the donations came in via checks straight to the organization without a percentage off the top to FundRazr. Although many of the starters on our campaign were people comfortable with donating through the site, some of the larger amounts came from people who preferred to provide anonymous checks. We also had an “at the door” information campaign to which people could donate, which allowed smaller donations to go into the campaign on a regular basis. This kept up the momentum.

There are some tips I can share with you from this experience that I hope will help you as you make your platform decision, in Checklist 1.

Checklist 1: Crowdfunding Platform Decision

5. Where Did the Money Really Come from and Why?

You might ask, where did most of the money come from when we ran our starter campaign? The donations came from small and large contributors and from all ages. Some people donated online and some submitted checks and cash.

I expected the campaign to take longer. The reason why this project succeeded so quickly was that we sent a lead-up article to the newspapers talking about the history of the project and introduced the crowdfunding campaign. We then edited that article down and distributed it through the society’s monthly enewsletter with a link to the FundRazr campaign. Potential donors received it, linked over to the FundRazr site, and, one donor in particular mailed in a generous donation that clinched the campaign.

This was a good outcome. The campaign worked because we used FundRazr’s format to focus on the campaign on a number of levels daily, sent out thank-yous quickly, and believed in the project. I suspect that, if people approach campaigns without considering it to be part of daily operation tasks, and just wait for funds to fly in, that it would be more of a challenge.

When it comes to campaigns, Daryl Hatton, CEO of FundRazr stresses the need to reach people by telling your story in a succinct way. He adds, “But what is even more important is helping a potential contributor understand the magnitude of the problem or opportunity, its effects on you, and the impact that their contribution will make. Describe the impact of the lack of funds on you and don’t hold back.

“This isn’t about complaining; it is about stating the facts so that there is no doubt. Then, describe how a contribution will make things better or help solve the problem. If you’ve done a good job of telling your story, the contributor will have an emotional response. Sometimes the emotion is sympathy or concern. Sometimes it is hope or excitement that they can help.”

In looking at the roof campaign, I would guess that our simple story about the roof of a legacy heritage home needing repair evoked concern, hope, excitement, and a willingness to give. Contributing to this simple project made things better and solved an urgent problem. It was also a gift upon a gift, sustaining and acknowledging a generous bequest made years ago. Carrying the torch for common-sense generosity if you will.

Other reasons people gave to the project? They’d probably include being part of a grassroots effort that makes a difference, community connectivity, and caring about social investment. The good news is that people contribute. They contribute in their own ways for their own personal reasons, whether to an individual, family, or nonprofit.

Connectivity, enjoyment, and social investment thrive in local and rural communities which may have more freedom and latitude than larger institutions to make independent decisions, shape progress, and collaborate. Crowdfunding has many levels of opportunities for nonprofits and donors and is the perfect platform for expanding these connections.