Tips for conducting successful crowdfunding campaigns

When the two deadliest earthquakes in Nepal’s history struck in 2015, killing 8,500 people and leaving over a million more homeless, the world sprang into action. Local and international NGOs hit the ground running and funds poured in through the usual channels — governments, aid agencies, multilateral development banks, philanthropic foundations and private corporations. But millions of dollars for basic necessities like food, clean water and temporary shelter — as well as for longer-term projects like the rebuilding of schools, hospitals and houses — were raised through relatively small amounts of money from individuals and entities across the globe, mostly through the Internet. The global refugee crisis has inspired a similar outpouring of support, with people turning to online platforms to donate funds to both established organizations and individual fundraisers. Popular website Kickstarter, in partnership with the Office of the United Nations High Commissioner for Refugees, has already raised close to $2 million for Syrian refugees. The figures are similar for Generosity, Indiegogo’s free personal and social cause platform. Some initiatives are more small-scale and personal, such as a campaign that raised $191,000 — almost 40 times its initial target — to fund a refugee family’s new life in Lebanon. Crowdfunding, as the movement and practice is known, leverages social media and Web-based communication to solicit relatively small monetary contributions from a large group of people. And the emergence of more specialized crowdfunding websites, such as Humanwire, a platform specifically designed to provide financial support to refugees, and ShareTheMeal, a U.N. World Food Program app that raises funds to feed Syrian refugee children — suggests that this type of digital fundraising is becoming more widely accepted and more commonly used in the development and humanitarian community. “Crowdfunding is a powerful tool for fundraising to fill in the gaps that grants, government, and major donors can’t fill,” Rob Wu, founder and CEO of Causevox, told Devex. Crowdfunding campaigns seek to pool capital from various independent sources through a specific and open call to action. Campaigns or appeals are usually housed on third party web platforms which act as moderating venues or “marketplaces” where operators link initiators (those that put forward an initiative to be funded) to funders (those individuals or groups who financially support the initiative). “What's so inspiring about crowdfunding is that the flow of funds isn't limited to what people typically think of as from 'donor countries' to 'developing countries,’” Mari Kuraishi, president and co-founder of GlobalGiving, told Devex. Platforms can also provide important background and contextual information about the initiative, through narratives, videos and images, as well as facilitate comments and track overall interest and progress. These tools help platform users and prospective funders assess the merit of the initiative. To financially sustain operations, some platforms charge user fees or take a percentage of the total amount fundraised for successful projects, while others post advertisements. While the campaigns share many of the same characteristics as traditional online fundraising campaigns, there are some important distinctions. For example, crowdfunding campaigns typically operate within a timeline with initiators setting a target amount that they aim to raise within a certain number of days or weeks. If that specified goal is not reached, the initiative may be cancelled and committed funders may even get their money back. Reward-based campaigns even offer tokens, perks or pre-orders of a product in exchange for a contribution. Perhaps the most significant differentiating factor between many forms of crowdfunding and more traditional fundraising campaigns is the very essence and motivation of the funder. Driven by the proliferation of the Internet and social media culture, active crowdfunders often intimately identify with the initiative they choose to support. They may personally believe in a specific social cause or want to adopt a certain innovation early and see it gain traction. Many are proud of their investment and promote their engagement or commitment through their own personal and social media networks. But there are other practical reasons why some campaigns blow past their funding targets, while others struggle to garner even a little bit of traction with donors. Indeed, crowdfunding success is influenced by and depends on a wide variety of factors and not all of them are well-understood. Based on our research and conversations with nearly a dozen crowdfunding experts and campaign managers, there are some best practices that all development organizations should adhere to when launching a crowdfunding initiative. Here are a few important tips we learned. 1. Set a realistic goal. It might be tempting to shoot for the stars, but crowdfunding experts advise setting a low funding bar for your first several campaigns. Lower targets not only increase the chances of achieving your funding goal, they mean lower risks, especially for all-or-nothing platforms like Kickstarter that only release funds if the goal is met. “Make sure that the amount is attainable and the amount is the bare minimum that you need to make some sort of impact,” Ishita Anand, CEO and co-founder of BitGiving, told Devex. Initiators should not expect to raise all the funds they need from a single campaign or crowdfunding platform, but should instead use the new mechanism alongside other fundraising techniques. On some sites such as Indiegogo, campaigners can start with a low minimum goal, and simply establish “stretch goals” once the initial target is met. Aside from raising money, crowdfunding is also a great way to test demand for a new product or initiative. “Crowdfunding not only de-risks an initiative by providing up-front financing and support, it is also a low-risk approach to testing your idea,” Caroline Angus, commercial director of GravityLight - an innovative foundation that launched two highly successful campaigns - told Devex. “If you don’t hit your target, it may not mean you shouldn’t launch your initiative, but it does mean you should understand why people didn’t support it and how you can improve your proposition.” 2. Make it personal. There are more than 1,000 crowdfunding websites all over the world, each one hosting a multitude of campaigns competing for the attention and resources of online funders and donors. So how do you stand out and attract backers amid all the fundraising noise? For many seasoned crowdfunders, it’s about knowing your audience and making your campaign story personal and relatable for them. “People contribute to people,” Breanna DiGiammarino, senior director of outreach at Generosity, and Alisa Cordesius, the website’s vertical manager for social innovation, told Devex. “You and your team should tell the authentic, personal story behind [the campaign]. Be as specific as possible about the impact you will have, and address the question, ‘why now?’” For campaigns run by individuals, this can mean providing a background on your involvement in the initiative or interest in the cause. Bigger NGOs can put a human face to their campaigns by focusing on the beneficiaries — sharing the stories of the people and communities they are working to help. “Because we’re both a business and focused on social impact, that means we need to have information on both,” Yve-Car Momperousse, CEO and founder of Kreyol Essence — a social enterprise that crowdfunded a record $100,000 loan through Kiva — told Devex. 3. Invest in a good pitch video. Providing visual elements to your campaign is a great way to engage potential funders and communicate your proposition in a clear and concise manner. In fact, Kickstarter believes that including a video can increase a campaign’s chances of success by 50 percent. Creating a video also helps convey the personality and nuances of your organization or social enterprise, and can help establish a more intimate connection with funders. “A good video is hugely important,” said Morgan Snyder, successful crowdfunder and co-founder of Sweet Bites. “For people starting out, it’s such a good way to learn your own elevator pitch and understand why you believe in your idea and why other people should believe in your idea too.” While the video need not be expensive, initiators should expend resources on quality production, including audio and visual quality. Keep it short but informative. Ending with a call to action or a strong “ask” is also a good idea, but make sure it’s clear and convincing. "We can't take everyone to Cambodia so we wanted to bring Cambodia to them,” said Melody Zavala, director of Books for Asia at The Asia Foundation, who recently managed a crowdfunding campaign titled Let’s Read! Asia on Indiegogo. 4. Tap into your own network. Simply launching your campaign on a high-traffic crowdfunding website isn’t going to be enough to bring in backers. Before reaching out to strangers and asking them to contribute to your campaign, make sure you first exhaust your personal connections and pitch your idea to everyone in your network. This means turning to social media and email marketing, as well as other channels of communication. “Being relentless about emailing your contacts and getting the word out about your fundraiser is the single biggest thing you can do,” Indy Bishop, communications director for CrowdRise, told Devex. “It’s easy to turn your fundraiser live and tweet about it once or twice but if you really want to have an impact, you need to send out emails to your community and tell them exactly why you are passionate about creating change. And you can’t stop at one email … you have to be relentless to create change.” Zavala suggested launching a more traditional corresponding campaign to draw attention to the crowdfunding effort. For instance, The Asia Foundation has held launch events in San Francisco where they show the campaign video and then try to solicit campaign commitments. 5. Leverage partnerships. First-time fundraisers looking to expand their crowd would benefit from partnering with bigger, more established organizations and media outfits to add visibility and credibility to their campaigns. SEEDS India, for example, worked with a leading radio station to crowdfund money for Nepal earthquake victims. The partnership helped make donors feel more comfortable about giving through a relatively new fundraising channel. Aside from bringing in additional backing, media exposure also builds awareness of your brand or cause. “Pitch your story to every relevant blogger and reporter you can find,” Devin Thorpe, author of the book, “Crowdfunding for Social Good: Financing Your Mark on the World,” told Devex. Campaigners should be aggressive in getting the word out, both online and offline. Just be sure it’s your campaign’s genuine, personal story that is always being told. 6. Quantify, quantify, quantify. People are more motivated to give when they understand and imagine the exact impact their contributions will have on a cause or project. They want to know how many solar lamps, sleeping bags or classrooms their money is helping provide. They want to know how a loan of $1,000 can help a cattle farmer on the other side of the world better provide for his or her family. Campaigners should not only detail exactly what the contributions are going to be used for, but also be transparent about their project’s plans and status. Good crowdfunders make the effort to keep in touch with their contributors, updating them on the developments, progress and setbacks every step of the way. “[Donors] don’t want to give to an NGO where they’ll give a small amount of money and they don’t know what’s happening with it,” Anand said. “They actually want to know that they’ve made a quantifiable impact.” Crowdfunding is not going to resolve a development organization’s fundraising problems overnight. Campaign sums remain small and the movement will likely never replace other larger sources of development finance such as bilateral and multilateral donors or corporations. But crowdfunding is playing an important role in global development today and could radically transform how development organizations and practitioners raise money in the future. 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