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.”
That was his first mistake. People fund your project to get the prizes. That is really one of the best ways to get your Kickstarter funded.
“Do the numbers,” he says. “If you have something that needs 1,000 backers, can you get them? Don’t make your $20 level be a T-shirt. Do you have any idea how much it costs to get a T-shirt made? Even one T-shirt, with eight colors, costs $25.”
Tif 2: Do your research
You will put the same amount of work into your Kickstarter if you research or don’t, and you will have vastly superior results if you do the research. Kamm suggests watching 150 successful project videos and 100 unsuccessful project videos to pick out the characteristics of successful Kickstarters.
Tip 3: The top 2 secrets to Kickstarter success are …
Marketing and marketing. And marketing is — BOOM! — fundraising! Kamm suggests getting started early on this. Look at other similar projects on Kickstarter and the blogs they’re featured on. Then comment on the blogs and create a relationship with the bloggers. Then launch your Kickstarter and ask them in a quick pitch email to cover it. Do not try to find the email addresses of people who have funded other Kickstarters. Big no-no.
Tip 4: How do you set a fundraising goal?
“For our XO event, we set the price at $400 per ticket because that was the cost, including our time,” Baio says, adding that you should set the goal at the minimum you can to make the project worth your time.
“Figure out what your core reward is, and price that fairly. That is what people are primarily backing the project for,” he says, adding that Kickstarter frowns on stretch goals. Just put a modest goal, and then talk in the description text about what you will do if you exceed that goal.
Tip 5: What should you use for prizes? And how many levels?
Baio suggests $5 as a level to start at and, as a prize, provide backer updates (which is a nice way of keeping people informed about your project). He also says that if you’re selling high-end tickets, you should sell them but give something more to people who maybe can’t make it to the event. Because his conference was about honoring and highlighting do-it-yourself (DIY) artists and crafters, Baio offered a DIY kit; T-shirt; and goodie box with coffee, Etsy-bought crafts and artwork. He suggests three to four prize levels, tops. Admittedly, he says, he’s seen up to 40 prize levels in a Kickstarter, but those usually work best with role-playing games.
If you give people too many choices, he says, they’ll run away from your project. Remember this when you’re giving people 10 options to donate on your website. Maybe just have one to start, and make it more complex later.
Tip 6: What makes a successful Kickstarter video?
Videos should be no more than two minutes and 53 seconds, says Kamm, who is a filmmaker. Why? People have short attention spans.
And if you’re thinking, “Well, all I have is an iPhone,” that’s OK. Frayne made his Kickstarter video with his iPhone and iMovie on his computer.
“Look, the main thing that comes through is sincerity,” he says. “If you can be sincere, and find your audience, and speak to them in the language they understand, you will create fans. People will feel connected to your story and become your fans, and back you again and again.”
Frayne also mentions that people might just see your video on Kickstarter and want to mentor you or partner with you in other ways. For his invention, he says, he’s talking with a rubber company in Canada on a potential partnership to market his product with its product, which he would never have gotten if he hadn’t had the exposure of a Kickstarter project.
Tip 7: It’s not just about the money
(This one will have fundraisers nodding their heads!) It’s about creating true fans — people you can call on again and again to back your Kickstarter projects. Which is like saying, “Build a donor base, and keep asking donors to get involved!”
Duh. A woman in the audience said, “Oh, well, but I don’t want to ask my backers to give again!” To which all three of the speakers responded, “Why not?”
In the end, it’s a free country, and they have the right to refuse you. But why deny them the choice to give to you again, if that’s what they want to do?
That is an excellent motto for fundraising, really.
If you’d like to read more about how to have a successful Kickstarter, I also helped an artist and filmmaker create a successful fundraising email last year. Read about it here.
Mazarine Treyz is author of "The Wild Woman's Guide to Fundraising," "The Wild Woman's Guide to Social Media" and "Get the Job! Your Fundraising Career Empowerment Guide," as well as the Wild Woman Fundraising blog. Reach her at firstname.lastname@example.org