Crowdfund-Ed: The 4 Truths of Crowdfunding
The misconceptions about crowdfunding are endless. Here are 4 truths about crowdfunding.
Editor's Note: This post was originally published on June 20, 2018. This post was updated on September 28, 2022.
The misconceptions about crowdfunding are endless
Across crowdfunding platforms, it has been estimated that the overall success rate of campaigns is 5–10%. That’s projects that hit their crowdfunding goal. Even the most successful and popular platform of all time, Kickstarter, only has an average success rate of 30%.
Why is this?
The reason for this is one the largest misconceptions about crowdfunding; the idea that if you build it they will come. The majority of Project Creators in crowdfunding believe that if you create this page and post on social media, then the donors will come rolling in. And so the campaigns sits there unfunded until the end.
While you might have a dream, this is not “Field of Dreams.”
Here is the stone cold truth about crowdfunding
1. Crowdfunding is exactly like traditional fundraising in its efforts.
The time you put into crowdfunding should reflect what you would do in any fundraising campaign. That includes having a well organized team, getting friends and family involved, and having events to bring success.
Crowdfunding requires leadership, roles, and (sometimes uncomfortable) delegation to create a team that will bring their own networks in to help hit the goal. The more people you get into the campaign means the more people you will have vested in supporting your project’s future, and the more people they will bring in to donate to do the same.
2. The crowd isn’t going to find your campaign
...unless they are connected to it. That leads me to another major misconception: that social media will connect people to your project. You have to work your social media. You need to have varying messages tagging and targeting different audiences.
We often see campaigns post the same thing throughout, “Hey, we are doing this campaign, help us by donating here.” You have to think outside of the box. What other organizations are doing work that you can tag and highlight? Is their staff within your organization that should be highlighted and tagged? Is there a related fun fact you can share about your work? Is there something cool you are offering as an incentive to donate? These all make dynamic posts that ,if you tag properly, can bring in networks outside your own.
3. It isn’t all about online sharing and marketing
If you have a serious goal you will likely need to do some on the ground work, as well. Having events or finding platforms to speak about your project and have an ask of a captive audience can be a huge boost in meeting your fundraising goals. This is generally accepted in traditional fundraising, but it still stands to be recognized in crowdfunding. Getting people to take time in their day and focus their attention on the good work you are doing will likely lead to donations, if you make an ask.
4. Crowdfunding isn’t for everyone
Through my work the past four years in civic-based crowdfunding at Patronicity, I have encountered people from rural towns of 300 to thriving cities with hundreds of thousands of citizens. One thing that can be said is crowdfunding isn’t a great fundraising method for everyone. Some folks are just not comfortable working online, some towns don’t have adequate internet connection, and some people have an existing fundraising method that works just fine for them. However, we at Patronicity have worked hard to make our site extremely user-friendly to support those who aren’t tech savvy.
All in all crowdfunding remains a wonderful tool to get people connected to what you do, create a vested donor base for your organization’s future, and raise money for your work or cause. However, it would be great if we could create a sentiment around crowdfunding that is, “Hey, nobody said this was going to be easy,” so that everyone is better prepared.