Which is why crowdfunding is shifting the paradigm, away from the usual sources of finance.
We all know it’s no longer enough to shake a tin and count on the patrons that have supported us in the past. We need to move away from this traditional route to fundraising to a more innovative, creative, wider reaching and longer-term approach to raising money.
So, what is crowdfunding?
Crowdfunding is simply a new way of using technology to help people with an idea raise money to bring it to life, whether that’s a business idea, a startup, a community project, a charity or a social enterprise.
Did any of you do a sponsored event when you were at school – take the form home and ask your parents who asked their friends? You collected the money and took it back to school.
That was crowdfunding.
Do you remember your history studies? The Darien scheme back in the late 1690s, when a quarter of the money circulating in Scotland was pooled in what became an unsuccessful attempt to make Scotland a world trading nation by establishing a colony called New Caledonia in Panama.
That was crowdfunding.
Crowdfunding is a global phenomenon that provides an alternative route to donations – from an extended audience – it’s all about community and that truly lends itself to charities.
It’s the explosion in the use of social networking sites that has brought crowdfunding to the fore; as users of Facebook, Twitter and LinkedIn grow, so do the opportunities to reach out for support.
Crowdfunding is simply an extension of what people have been doing for centuries – patronage, supporting family and friends and the local community.
Millions of pounds, dollars and euros are donated every day to support exciting, innovative and life-changing ventures around the world. The impact on businesses, individuals, communities – and the economy – is significant.
But it’s not just about business and entrepreneurs, crowdfunding works for communities, social enterprises, charities, youth groups, schools and more.
Charitable crowdfunding – it’s not just about the money
Money is obviously important, but it needn’t be the only driving factor behind a crowdfunding campaign. Crowdfunding delivers more than just money.
Donor fatigue is a real issue, local communities will have regular supporters of charitable activities in the area, but it’s important to widen the donor pool.
Crowdfunding enables you to reach out to the diaspora, people who have moved away from the area but who maybe still have family there, or memories that keep them tied and supportive.
It means you can engage with young people more easily – Gen Y are not only engaged in social, they live it, breath it, dream it.
And then there’s the Corporate Social Responsibility opportunity for you to engage with large corporates to help them with their CSR – if you can come up with ideas or projects that could be crowdfunded, you could get their employees involved in the campaign, then ultimately ask the corporate to match the money raised. You get double the impact and a terrific community legacy.
Crowdfunding can often trigger matched funding, so it’s important to explore these options.
And even if your crowdfunding campaign is unsuccessful, you will have an up to date database of new backers to reach out to, and a significantly raised profile beyond your immediate location.
The legacy is a much more engaged community of supporters, and for those who haven’t engaged with social media effectively in the past, this is a great starting point
So how does it work?
Bring your community and build interest in advance of your campaign. Do your research, find out where your target market is consuming their data, spending their time, and go there, start to engage before you launch your project.
Create your project – it’s simply an online pitch, so tell your story, engage people, choose the amount of money you want to raise and a time limit – 30, 45 or 60 days. Upload images and video to illustrate your story.
Create rewards – a series of compelling, unique, exciting rewards will make it a much quicker and easier decision for strangers to your project to back you. So be creative, ask your patrons and backers to donate things, use any celebrity connections you have. They’re bound to be on social media and will happily publicise anything they’re involved in. You’re reaching their followers each time they tweet, ultimately extending your own reach.
Then the hard work starts, reaching out to your community and asking them to support you. It takes time and it takes effort.
Create a mini campaign plan and work hard. It’s not a one-off activity, this is all part of building your supporting community for the future.
At the end of the day you get out what you put in, there’s potential to raise much more than you initially ask for, and you can post as many different projects as you like.
Images courtesy of siteorigin.com and harrods.com)
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