Unless you avoid social media, newspapers and the population in general there is good chance you’ve heard about the online fundraising phenomenon that is crowdfunding. But how does it work?
We’ve packed this article with heaps of useful information about how online fundraising sites work and how you can make online fundraising really work for you.
What is crowdfunding?
Crowdfunding is exactly what it sounds like – someone creates a campaign and a crowd of people support their campaign because they believe in that cause.
Where does the ‘crowd’ come from?
Ah, well that is the easy part – you probably know them already. Your crowd will be your friends, family, colleagues, associates, and anyone else you know.
Who else could be part of your crowd?
Your crowd is pretty unique, but all the people we have just mentioned have their own crowd too. So, once they start sharing your campaign with their crowd, voila! Your crowd just got a whole lot bigger!
But what about strangers?
This is the biggest misconception in crowdfunding. Everyone hears about the hundreds of strangers who donated to an amazing campaign. In truth, those people are most likely part of your crowd, or the crowd of donors that is growing with your campaign’s momentum. Of course, you may not know them, but there is a good chance they know someone in your ever-growing crowd.
So how do you reach out to your crowd?
Networking and marketing are key to reaching out to donors. Social media, emails, word of mouth, forums, blogs, website appeals, event hosting, advertising – the list is endless. The one thing that is guaranteed to make an online fundraising campaign fail is, to create a campaign – and then sit back and wait for the magic to happen. At GoGetFunding we recommend 3 – 5 hours a week being spent actively promoting, updating, thanking, organising and planning each campaign.
So what do the fundraising sites actually do, if you are doing all the hard work?
Now this is where it gets really interesting, so sit forward and listen. NO TWO CROWDFUNDING PLATFORMS ARE THE SAME. There are so many different features being offered by crowdfunding sites that it is easy to become dazzled by the big names, or the huge donations. Make sure you find a crowdfunding site that is working for you. Here are some of the top things to consider:
- What are their site fees?
- What payment method do they offer donors, and what is this fee?
- Are donors charged anything?
- What happens if I don’t reach my target? Are there penalties? Are donors refunded?
- What customer support do they offer?
- Is the site itself user-friendly?
- What features or tools do they have that really help my campaign?
- How soon can you access your funds?
So what are you getting for your money?
Your chosen crowdfunding platform would have invested a great deal of money into developing your crowdfunding page to ensure it maximises your chances of a successful donation. Even the size of your photo and the positioning of your donation button has been researched and tested! You should be confident that you and your donors are using a secure, effortless payment option that actively tackles fraud. Your page should be able to handle large volumes of traffic and should be as interactive as possible for both you and your donors.
And behind the scenes?
When a donation is made through a secure page, your crowdfunding platform is talking (albeit electronically) to your payment processor ensuring that when that donation has been approved by the donor’s bank and accepted by your payment processor, that donation will appear on your campaign page. If you have enabled features such as automated ‘thank you’ emails, or a message of thanks at checkout, these too will be sent. And, if you are offering rewards, all the data you need to ship any items will be stored and accessible at any time.
So, is there a magic formula for success?
There is no magic formula. Even the most unlikely of campaigns can capture the hearts and imagination of others. However, this little tool is a great calculator: http://crowdfunding.io/ and if you choose the right platform, are dedicated, spend time creating your campaign, work at sharing it, and have a crowd behind you – then something magical could happen for you.