Crowdfunding is rapidly becoming part of the funding zeitgeist for creatives, start-ups and non-profits. New platforms are launched every month. There are platforms for social projects (e.g. Buzzbnk) design and technology (Co-FundMe); public spaces (Space Hive); books (Unbound) and one for the equity-based model (Crowdcube), and more.
Contributed by Anne Strachan from CrowdfundUK
And that’s just the UK! The pattern is mirrored across Europe and the USA.
Projects have reached targets of £1 million in the UK and $1 million in the US. A million people have backed $84 million for 13,000 projects on Kickstarter alone in the past 3 years.
Why is this - are we all just short of cash? Yes we are - grants are drying up for the charitable and arts sectors and the banks are not lending to small business and start-ups.
Crowdfunding seems to be the answer to fund services which would otherwise close down; films that would never be made or a business that would not get off the ground.
So, it’s project, not people led - the wrong way round.
And so campaigns are posted and around 40% reach their target. The others sit on the site and wait for the money to come in - and it never does.
Because it’s not just about the money; it’s not even about the projects - the crucial factor in crowdfunding is your crowd. You have to find them, connect, engage with them and continually ask them to support and fund your project.
And that’s hard because your crowd is not one body with one motivation. A crowd is a slippery concept to grab hold of - many people all with different ideas, values, interests and, of course, willingness to part with their cash.
I recently ran a training session on crowdfunding for groups who all wanted to raise money. All keen, certain of the worth of their ideas, and sure as anything that everyone would think so too. But, when asked what would motivate them to donate to a campaign - all sorts of questions, barriers and concerns arose.
We are funny with money
Think first - who is your potential crowd? What concerns will they have? Why would they donate or support you? Then, and only then, should you design your campaign.
Have your own crowdfunding tipsand opinions? Share them in the comments.