Wednesday, March 11, 2015

To Crowdfund or Not to Crowdfund

Fractured Atlas had a great article on putting together a crowdfunding video (read it here), which made me think about crowdfunding in general.

In a recent Twitter chat I was on, one of the participants opined that crowdfunding was the same as begging, and a couple of other participants agreed. I don't.

Obviously, the couple that asks people to crowdfund their wedding celebration and honeymoon maybe be taking things too far. But in some cultures, it's okay to pin cash to the bride's dress during a dance to help the newly-married couple get off to a good financial start. What's the difference between that and crowdfunding a wedding? Reciprocation.

Crowdfunding is Reciprocation

If I ask for money and you have no idea what I'm going to use it for, that's begging. If you ask me for money to be used for you and you alone, for whatever purpose (even if it involves food or shelter), that's begging. But if you ask for money and tell me that you will use it for feeding other people or teaching illiterate seniors to read or launching a new public museum, that's crowdfunding.

Obviously, nonprofits have been crowdfunding for years. And so have inventors and filmmakers. Any time you ask people to invest in money in your ideas with an expectation of receiving something in return - even if it's only a line of credit among hundreds of others - you are crowdfunding.

What has changed over the technologically innovative last few years is how we may go about crowdfunding. We may use the tried and true direct mail or we may be experimenting with creating a YouTube channel, an Instagram account, or using Kickstarter or GoFundMe.

How well any of these platforms work will depend on:

  • How much planning we've done
  • How much time we put into the elements involved
  • How we have cultivated and engaged with our community to promote trust
  • How well we communicate what our plans are and how we will reciprocate
  • How well we follow up on our promises

No, crowdfunding isn't begging and nonprofits - particularly very small ones - should be evaluating every possible avenue to raise funds. If we don't, we are not doing our jobs.

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