As traditional grants for artists become scarce, creative people are coming up with new ways to raise money. Crowdfunding is a popular online fundraising technique that you can use whether or not you have non-profit status. Although successful crowdfunding requires a significant investment of time and effort, it can work well if you have strong online networks of fans and friends that you are willing to ask for money and to help spread the word about the campaign.
What is Crowdfunding?
The Power of Many Small Gifts – Many of your fans, friends, and acquaintances may only be able to give small amounts, but if you can get a big enough crowd of them to donate, you can reach your funding goal. The problem is figuring out how to reach enough people without spending a lot of money on publicity and advertising.
Donate2it solves this problem by offering you a simple way to create attractive online fundraising pages that you can publicize through your email lists, Facebook pages, blogs, or any other social networks. You can also ask your friends to publicize your campaign through their networks. The more people you can ask, the more likely it is you will reach your goal.
You could accomplish this same kind of outreach by doing snail mailings to large numbers of people, but that would be much more expensive and time-consuming. The advantage of online crowdfunding is that it provides a cost-effective way for independent artists and small organizations to reach many more people.
For-Profit or Non-Profit Projects – Crowdfunding can be used for either for-profit or non-profit projects. If your project has non-profit status, then you can offer your donors a charitable deduction on their income taxes for their gifts. If you don’t have non-profit status, you cannot offer tax deductions, but you can offer other rewards or incentives.
For instance, if you are making a film, you could offer people a DVD of the finished project, signed posters, or an invitation to see the film at a special preview. For small gifts, the charitable tax deduction is small, and many people will be much more excited about having a direct connection with an artist or getting a gift related to the project.
The traditional way of obtaining funds for “for-profit” projects is to find people who will invest in the project in exchange for a percentage of the future profits. When you use crowdfunding, you give away other kinds of rewards, and you can often keep 100% ownership of your project. You have the freedom to do any kind of project you want, as long as you can persuade people to give you money for it.
Doing A Crowdfunding Campaign
Define Your Project – If you are interested in crowdfunding, the first step is to define your project and set a fundraising goal for it. You need to be able to write a few paragraphs that will explain to people what you want to accomplish, how much money you need, and why they should support you. This is actually the first step in any fundraising effort.
Set Your Funding Goal – To decide whether your funding goal is realistic, you need to think about how many people you need at each giving level to reach your goal.
For instance, you could reach a goal of $5,000 with the following combination:
10 people at $100 each = $1,000
30 people at $50 each = $1,500
100 people at $25 each = $2,500
Total from 140 people = $5,000
Do you know enough people that you are willing to ask who could give at the levels you need. If not, is there a way you can draw new people to your project? Can you organize a fundraising team where each team member agrees to raise part of your goal? What could you offer your current supporters that would get them excited enough to make a gift and tell their friends to help you too?
The answer to these questions with crowdfunding is to get the campaign in front of enough people to achieve the goal with many small donations. Start by asking friends, family and supporters to post, like and repost to their social networks prior to launching the campaign, gather the troops. Post to Facebook and other social media to engage people. Don’t do the “Spray and Pray” approach, it does not work. Instead create post and tweets that inform people about what you are doing and follow up on questions and comments. People are interested in supporting your Project not the fundraiser. Of course you need to have links to the campaign but that is secondary to the purpose.
If this is your first fundraising effort, it is good to set a goal that you think you can reach. Fundraising is like anything else, you get better with practice, and once you get started, you may discover you can raise more than you thought.
Create a Crowdfunding Web Page – Once you can explain your project, know how much you need, and have figured out who you can ask, the next step is to set up a page online to collect your donations.
Your page should provide a clear and concise overview of your project, state the amount of money sought and exactly what it will be used for (i.e. post-production on a documentary film, or studio time to record an album). Ideally, your page will also contain a video about the project or other examples of the work, such as a song to listen to or an excerpt of a script to read.
Supporters should be able to donate money simply and easily through your page. You will encourage more gifts by offering incentives and rewards to supporters at different levels (i.e. a donation of $25 will get the supporter a free digital download of the artist’s album, and $40 will get the supporter a signed copy of the album on CD). It is good to take some time to figure out rewards that will be appealing to your supporters, but not too hard for you to produce.
Ask As Many People As Possible to Give Money and Spread the Word – Once your page is up, you can reach out to your entire online network, using Facebook, Twitter, blogs, and e-mail. Ask everyone not only to give money to the project, but also to spread the word to their networks, or at least to specific people they think might be interested in funding the project.
Keep Asking Until You Reach the Goal
As you get closer to your goal, send frequent updates to keep building the excitement until you reach your goal. Keep in mind that some people may not be able to give you money, even if they want to. Don’t take it personally, just stay focused on finding people who have enough money to make a gift. Keep promoting and engaging people until the goal is achieved.
For artists, crowdfunding is a practical and relatively simple way to raise money directly and to connect with their audiences in a more personal way. Not only will a successful campaign generate money, it will generate enthusiasm for the project. Supporters who make even a small donation feel involved in the project, and are more likely to spread the word about it to their networks. A successful crowdfunding campaign can be the first stage of a publicity campaign for the project.
In addition, in recent years we have seen a decline in government and foundation grant money for artists. While foundation grants remain a valuable source of support, the time-consuming process of writing applications coupled with the slim chances of receiving a grant is very frustrating. Also, the foundation process is usually slow. Many foundations only accept proposals once or twice a year, then it often takes them several months to decide about your application.
Crowdfunding is a good option for artists who need to raise money quickly for a specific project and don’t have the time to apply for grants, or for artists who need to supplement grant money they have received. It’s also a good option for projects that don’t necessarily fit any grant guidelines, or that have a niche audience that can be easily broadened using the Internet.
What Makes a Crowdfunding Campaign Successful?
Artists who have success with crowdfunding typically:
- Have networks of contacts and make the most of these networks to mobilize supporters to donate.
- Are willing to ask everyone they know for money and ask those people to spread the word about their project.
- Include visual and/or audio material on their project pages to give potential donors a good idea of what they are funding.
- Send frequent updates to their current and potential donors about the state of the funding campaign, and continue to keep their supporters informed about the progress of the project after the campaign is over.
- Provide rewards to supporters that are meaningful but don’t take too much time to produce – be careful not to spend all the time you want to be working on your project working on making rewards for supporters!
- Set realistic funding goals and timelines to raise those funds.