7 Steps to Succeed With Crowdfunding in 2014

Have you ever thought about doing a Kickstarter or Indiegogo campaign for your nonprofit? I was approached recently by a board member of a nonprofit to give feedback on the organization’s Indiegogo campaign. I looked at its campaign text, and it was terrible. The organization was trying to raise operating funding, but its 18-minute video was a train wreck. Learn from this!

Before you dive in to a crowdfunding campaign, there are a few things you should know.

What is the same? How is Kickstarter crowdfunding like traditional fundraising? You build relationships with people and share your updates and stories with them so they want to give to you. And with your deadline, people get excited to give, tell their friends, and word spreads quickly.

What is different? How is Kickstarter crowdfunding not like traditional fundraising? People who back you expect to get something tangible out of the arrangement. It’s not just a “feel good” opportunity. It’s a chance to get something they want too. As far as I can tell, it’s kind of like online shopping … but with a feel-good twist that they’re helping other people’s dreams come true. And if the campaigns don’t make their goals, well, they haven’t actually spent anything. (Did you know that 56 percent of Kickstarter projects never make their goals?)

Recently, I went to a meetup about crowdfunding for startups. Each person who spoke had raised more than $150,000 via Kickstarter. One of them was Andy Baio, who raised $175,000 for his XOXO Festival. We also heard from Ryan Frayne, who raised $149,000 for a new invention that inflates and deflates things really fast, and Zeke Kamm, who raised $6,000, $223,000 and $87,000 with three different Kickstarters to make products for filmmakers.

Kamm and Baio both made products, and as they put it, “If you have an idea, it allows you to see if the idea is worth anything.” Say your nonprofit wants to start a project. Or your association wants to do a new, fun conference. Or maybe you want to start an earned-income stream — let’s say, getting the startup capital to make a new product for your nonprofit. (You’re a homeless shelter and want to make bedbug-free beds for other homeless shelters, for example.) Here’s some advice you might find helpful.

Tip 1: Cost it out
If you’re making a product, Kamm suggests, “Do not do a Kickstarter for a $10 product.”