Read this to help you decide if crowdfunding is right for you.
The right kind of project
Crowdfunding is a bit like the digital version of taking a tin round your local pub or cafe. You pick a specific thing you believe is important to do and ask for support in social spaces online. It’s a way of raising money for projects that don’t fit other income streams or sources.
Crowdfunding can work really well if any of these statements are true:
you have a good online network of supporters and want to reach out to them or you have the time to run a campaign to build that network
you have an idea for a focused fundraising effort over a set period of time
you have some ideas for rewards you can offer in return for donations that would encourage people to donate
you think that a short-term campaign focused on a particular target amount would encourage your supporters.
Crowdfunding can be particularly powerful if your audience has hobbies which also use crowdfunding for new products. Board games and computer games are very popular on crowdfunding platforms.
Differences between crowdfunding and other digital fundraising
There are lots of ways to run digital fundraising campaigns available now. How can you tell if what you want to do suits the crowdfunding approach?
Crowdfunding focuses on projects.
Crowdfunding campaigns have targets and time limits.
Crowdfunding allows you to take money from people only if you reach your target. This gives them certainty that you will do what you said you will do. It gives you the freedom to start the project only if you get enough money.
Crowdfunding is set up so you can easily communicate with your supporters and send them rewards if you want to. It helps you start building fundraising relationships with the people who make donations.
Pros and cons of crowdfunding
The strengths of crowdfunding
You can give people who donate a clear sense of how you will use their money.
You can use it to fund a broad range of social projects and initiatives that may not get other funding.
You can motivate people who might not have given otherwise.
You can use it to raise awareness and support for your cause at the same time as donations.
There are lots of online crowdfunding platforms to choose from. They charge fees but it is usually cheaper and easier than setting up your own donations platform.
You can tell whether people think your project is valuable depending on how much they donate.
Most crowdfunding platforms provide help and guidance on how to run your crowdfunder. This can be really helpful when you don’t know where to start.
The weaknesses of crowdfunding
Crowdfunding can be a popularity contest. So if your project doesn’t capture people’s attention it might not get donations.
You do need to be able to put time in. Crowdfunding takes a lot of social media effort.
Giving rewards in return for donations needs care. You have to make sure the rewards you are offering don’t cost you too much.