Ahead of our appearance at next week's Crowdfest, we've put together some good questions to ask to help build a deeper understanding of what crowdfunding can do for your cause.
Strategic or tactical?
Are you planning to develop a strategic crowdfunding programme, delivering multiple crowdfunding campaigns a year? Will crowdfunding play an important role in stimulating and rewarding innovation, developing supporter journeys, building your brand and giving people rewarding experiences of your cause?
Or are you planning a tactical, project based approach, raising funds for a specific project or policy campaign that wouldn’t happen otherwise, or aiming to build awareness amongst colleagues, and understand how to spot occasional crowdfundable projects and develop campaigns?
The financial case
Ask yourself what needs and challenges crowdfunding is going to help you to meet, and how. With a few exceptions, you need to have authentic, time defined projects that genuinely won't happen if the goal isn't reached. The benefits go far beyond hitting the target but, when most people think about crowdfunding, they think of money first so these questions will help you think about why you are using crowdfunding in preference to other methods.
1. Are you testing novel, innovative projects? Do you need to prove the concept for before you or other donors will commit to funding them at scale?
64 per cent of those who had raised funds via donation-based crowdfunding were unlikely or very unlikely to have received finance elsewhere
2. Do you have an urgent cash requirement, that needs to be met in a matter of months?
Emergency crowdfunders only work once, so approach with caution. Make sure you have a plan for how you’ll use crowdfunding to leverage more sustainable funding in future.
3. Do you need to re-engage our existing donors with our cause?
Project based fundraising enables people to reconnect. For example, existing major donors are often open to asks for match funding for projects, which can provide the incentive for existing individual givers to follow their lead and give their continued support.
4. Could this be the opportunity to test whether social media fans and followers will donate and fundraise, and what to?
This group are going to be important crowdfunding backers. 90% of people who have backed a donation-based crowdfunder promote it through their own social network* and sharing creates a powerful social incentive to give.
5. Do you want to bring new money into the cause?
Three in four of those who have used crowdfunding to support a social project said that the money they spent was in addition to what they what would normally give to charity*.
6. Can we manage the consequences of failure?
Crowdfunding campaigns have to be genuine and transparent - all or nothing campaigns (where the money is returned if the goal isn’t reached, and the project doesn't happen) are more likely to succeed than keep it all campaigns (where the cause keeps the money anyway). The better your campaign is planned and resourced, the better the chance of success. However it’s important to consider the consequences of failure and ensure that you can manage them, and still steward the valuable relationships that have developed through the campaign.
These questions will help you think about how crowdfunding can support brand, communications, marketing, campaigning and volunteering and how to leverage the legacy impact of your campaigns.
7. How could crowdfunding help us build our brand?
Crowdfunded projects have to be authentic and transparent to work, so they say a lot about what you stand for to large numbers of people - both through social channels and by providing compelling content for PR and other marketing and communications.
8. Can crowdfunding help us find more of ‘our people’?
Strong stories and intelligent social media outreach to niche communities of interest can rapidly unearth people who have an affinity with your cause and help to build your ‘movement’.
9. What will people who’ve backed our crowdfunders be open to doing next?
People who have backed policy focused crowdfunders (like buying billboard space for public campaigns) will be open to campaigning asks if you continue to involve them in the right way. There can also be huge benefits to volunteering, with one in four people* who give to a crowdfunded social cause offering to volunteer for the project they fundraised for.
10. How can we use the data and insight from our campaigns to build relationships for the future?
Digital gives you a wealth of insight about people’s interests and networks. How can you store, analyse and use it to help you to design them relevant, meaningful supporter journeys?
Building the Business Case will be one of the topics at Crowdfunding 101, the first module of The Crowdfunding Academy’s Expert Practitioner Course, starting 10th November. If you’d like to join a growing community of crowdfunding experts, then please email us at email@example.com We’d be happy to talk to help you work out if the course is right for you and your cause.
*With thanks to Nesta's Crowdfunding Good Causes report for the facts and figures.