Crowdfunding (the collective effort of individuals to network and pool their donations through the internet) is the most recent example of what President Clinton in his book Giving termed the “democratization of charitable giving, enabling citizens of modest means who share a common concern to amass huge sums of money.” One of the most democratic aspects of some of the crowdfunding platforms is the possibility for anyone to promote any project or idea. Case in point: in 2011, two of the Cannes Film Festivals nominations were funded by the crowdfunding platform PeopleForCinema.com.
Crowdfunding platforms like Kickstarter, Indiegogo and Razoo are best known because of the media attention a few of their million dollar campaigns have received like “Let’s Build a G—D– Tesla Museum,” which raised an Indiegogo record of $1, 370,461. At last count there were 536 CFPs, launching 650,000 different projects globally in 2011 and raising $2.2 billion in 2012 alone. It’s fair to say, that Forbes Magazine’s prediction is not accurate that 2013 will be the year this relatively new method of fundraising will consolidate, rather than expand.
Let’s get back to the million dollar campaigns-how did they do it? The short answer is mostly through social endorsements (likes and shares) on Facebook and Twitter made by “friends” and “followers” of the campaign or project who reached out to their networks. Recent research shows that people are 68% more likely to take the time to learn about a charity if it’s posted by a friend and 59% more likely to donate.
Thanks to the research of Andrea Ordanini and her colleagues at Bocconi University in Milan, Italy, we know that there are three phases of crowdfunding campaigns first: the “friend-funding” phase where the originator and the inner circle generally can be counted on to raise half of the campaign funds; the second phase “getting the crowd” phase where most campaigns slow-down and miss their goals without highly motivated volunteers who push the causes they care about out to their social networks. (Stalling in this phase can be costly if your charity has chosen a crowdfunding platform that uses an “all or nothing” approach in which projects are only funded if they meet their goal by the set deadline) and finally the tipping point of the campaign called the “engagement moment,” where it becomes clear that the goal is almost reached and those on the side lines jump into the pool so as to be part of a cause that made a difference.
Not surprisingly, charities with robust audiences of fans and followers have been successful in “getting the crowd” to support their campaigns. In UNICEF’s 2011 campaign it raised more than $3.4 million in donations and saw an increase in web traffic of 18.5%. The success was really in the numbers: with 405,000 web-site page views and their volunteers 1,165 sharing via Facebook and 956 retweets via Twitter.
UNICEF’s success is not the trend however because most charities are not using social media optimally for fundraising, while 98% of nonprofits have a Facebook page, only one-third of those organizations are using social networks for soliciting individual donations. Thus, charities are unlikely to use social media in conjunction with a crowdfunding campaign or to encourage their volunteers to do so-explaining why many campaigns stall.
The point: none of these platforms are a silver bullet-organizations need great strategy to spread the word!
If you are considering launching a crowdfunding campaign or project submit the form below and we will send you a checklist of questions to consider in choosing the best crowdfunding platform for your organization, or call WorldLink Communications directly and one of our consultants will partner with you to access your organization’s social media strategy.
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