Join me on April 19, Manchester for a Crowdfunding Workshop

Social media has enabled crowdfunding campaigns to reach friends, family and known supporters across time and space

But what about the crowd you don’t know, who might donate – if they only knew you were there?

Can we learn from research into social network habits and social networkers?

   In most online communities 1% actively contribute, 9% do so intermittently and 90% are named “lurkers” – who read but do not engage or contribute.

Crowdfunding can only reach a tipping point to be being part of our social, community and financial landscape if campaigns reach beyond their immediate social networks.

The 1% active contributors also frequently access mobile social media which increases interaction; they generate, not just consume, content; they follow more organisations or companies and use less traditional media (TV, newspapers). (The social habit – frequent social networker) .

Use of social media sites is growing in all age bands – the 2010 social network report shows that in 30 days 88% of 18-34 years olds visited a social network, with 69% of 35-49 years olds and 41% of 50+.

What campaigns need to do:  use as many social media platforms as possible for their campaigns – making it easy to access, support and donate; use blogs as news media; ask supporters to write for you; get “liked” by your supporters or get a link from sites popular to your social networkers.

Recent research has suggested ways of categorising social networkers

• Tourists: drop by, have superficial interest, few social ties
• Minglers: strong social ties, less interest in the subject
• Devotees: interested in the subject but few social ties
• Insiders: strong interest in the subject with many social ties

So your landing page or website might have many hits – but fewer donations – because 90% will be tourists or lurkers – with little interest and no social connections to your site.

What campaigners need to do:  link devotees (those with an interest in the subject) to minglers (the socialisers) to make your campaign something they want to connect with.

Crowdfunding can create a relationship that makes them feel they are playing a valued and powerful role in making new ideas happen. 

2010 social network report gives the main reasons (above) why people use social networking sites – that is to connect with people (friends, family and reconnecting). Fun is the second highest . Those that might seem more related to crowdfunding – political (or issue) interest, meeting like-minded people and gathering information are lower, much lower.

Campaigners need to – ensure they reach people through their friends, family and wider social networks. Give permission for those with wide connections to post updates, make videos for you – as well as simple retweeting.

Remember Fenton?

Make your landing page fun – however serious the cause

UK businesses have raised £2.3million via Crowdcube in its first year.  The Rushmore Group achieved  the first ever £1 million through crowdfunding. The platform was named as best start-up 2011 by Startups.co.uk and “Best Alternative Funding Provider 2012” by the Moneyfacts Group. This is a fantastic achievement for Crowdcube and for crowdfunding in general. Success like this should increase the number of people who invest beyond personal connection.

What helps to inform crowdfunding in the future?

Successful businesses on the platform

21% of prospective bids were accepted to be posted on Crowdcube. Of this 7% successfully reached their target. This is lower than most crowdfunding platforms which generally have a success rate around 40%.  With equity-based crowdfunding investors are expecting a real return on their money, in the medium to long-term, rather than the usual rewards or perks. Investment is a risky business and the small unsophisticated” investor can stand to lose a great deal. This is different to donation-based crowdfunding where friendship or a shared passion forms the basis for involvement.

Location of businesses

The successful projects are all in the South of the UK. The majority of projects currently on the platform are from the South, some from the Midlands and only a few from the North/Scotland.  This fits with the overall UK pattern which has more businesses in London and the South East than any other region. The recession has also hit the North hardest and the local economy in the South is recovering quicker. 

The entrepreneurs

The average (not sure which average they chose though) age of the entrepreneurs was 42. This fits with research that says the majority of entrepreneurs are white males, in their 40s, living in the South East. 10%  were female. At present around 14% of small and medium enterprises are run by women.

Entrepreneurship is of increasing importance when unemployment is so high. With so many women and young people out of work and the North hit so hard – we need to encourage a greater age range, more women, more from ethnic minorities across the whole UK to start businesses.

The investors

8811 people are registered on Crowdcube with 872 (or around 10%) actively investing and 74% of that number investing only once. Which means that there is massive untouched potential within Crowdcube’s community. With interest rates so low, and promising to be for some time, more people are likely to turn to investing – if they feel the system is trustworthy. Crowdfunding platforms should prove popular as they are a community in themselves and encourage personal connection between investor and entrepreneur.

What do we need to do to encourage a positive approach to crowdfunding from both investors and entrepreneurs?

• increase the traffic to crowdfunding platforms 
• publicise successes in both raising finance and increasing customer base
• build trust with, and competency of, the small investor
• increase the competency and confidence of women, young and ethnic minority entrepreneurs in placing strong business plans
• encourage and support applications from across the country – targeting areas of high unemployment

I have worked for 20 years in development education – raising awareness of development issues in schools and communities across NW England. Funding this activity has always been difficult but in the current climate it is almost impossible. Development education should look to crowdfunding to fund or co-fund projects building support and raising awareness of the issues at the same time.

Kiva is the most successful of the microfinance sites which use crowdfunding to provide loans, via microfinance institutions, for the poorest people in developing countries. Once the funds are repaid the original lender can lend to another cause, donate the funds, or withdraw them.

It is different to crowdfunding as the people do not post their own projects – these come from the microfinance institution via Kiva.

The impressive statistics from Kiva show a large number of people are keen to use their money for development in this way. Total loans made to date is $284,995,000, with 1,091,195 Kiva users from 217 countries who have given loans to 729,182 people from the global South.

There are an increasing number of crowdfunding platforms across the world. This infographic shows the spread. Some only take on projects with social impact such as Buzzbnk (UK), PeopleFund.It (UK) and StartSome Good (US).

Notable successes are Solar Water Disinfection on the Irish Site :Fund.it: The target was €22,000 to provide a borehole and reinstall the solar disinfection. By the end of their campaign they had raisesd $24,365 from 199 funders. Not just donations but micro loans can be obtained via Buzzbnk. Funding an indigenous community grow 30 hectares of trees in Bolivia the target was £45K and they raised £49,920 with repayment of the loans at 5% interest. 73 backers including 3 invested £5K

But these loans are directly funding community development and poverty not development awareness

What about development awareness?

Global Perspectives a Canadian campaign raised $620 on IndieGoGo to send young people, who have had a year-long development education programme, to live in a community in Nigeria.

I have yet to see a European development awareness organisation run a campaign there are plenty of projects that deal with education, equality and diversity, community development and sustainability issues.

Some successful examples

Film: Voices of the Transition a film project exploring solutions for a sustainable future raised £2,220 of £2000 goal with 55 backers.

Drama: Found: free theatre and dance workshops for women of all ages raised £1090

Fashion: Sara’s Sustainable fashion Project raised her target of £500.

Food: Grow for the Community raised £2005 for a children’s project.

Science and research: Oxford Biochar raised £8,000.

Transport: the Bicycle Academy raised £40,000!

What could we use crowdfunding for? To co-finance a project; publish educational resources; develop and run a community programme; run an arts festival; produce and app or a film.

Everything in other words!

So what are we awaiting for – permission?

It’s granted!

Join me on April 19, Manchester for a Crowdfunding Workshop

 Next workshop, Manchester 19 April 2012

Review of workshop by Crowdsource Gazette UK

Understand what crowdfunding is and how it works

• How crowdfunding can help you
• Find a platform to suit your needs
• Clarify your project or venture
• Plan a campaign using social networks and media

crowdfunding

using the power of social networks to finance projects or business ventures

A campaign can be to gather donations, obtain loans, raise your profile, offer equity, test and idea or product with your market or build an active supportive community for your organisation.

Crowdfunding is an empowering alternative to grant applications.

Crowdfunding can be for a variety of purposes – getting a project off the ground; refurbishing a building; financing a film or exhibition; or funding a startup company or small business.

Who will benefit from attending?

• Social enterprises
• Charities and community groups
• Third sector support organisations
• Fundraisers
• Start-ups
• Artists and film-makers

But where does crowdfunding fit in?

Thinking about adopting a diverse funding mix can help your organisation become more financially sustainable in the long-term. The key to ensuring stability is the diversification of income streams underpinned by effective management and planning.

Tips for sustainability include knowing what income streams are available,  being open to new approaches and adopting a sustainable and diverse mix of income sources, which often means adopting new income streams

• new opportunities need to be better understood and organisations need to take time to explore their potential.
• different income streams are accessed and managed in different ways and involve different relationships with the individual or organisation supplying the funds.
• the skills needs to access money from each income source also varies: for example, the ability to fill in a form maybe useful in winning grant funding, but understanding how to negotiate, might be needed to obtain funds through trading or contracting.
• whatever your organisation and its mission – the message of diversification is important to everyone. 

Crowdfunding is a new opportunity, that needs understanding and exploring and which involves developing new relationships and skills

Funding Central’s Income spectrum online tool is a useful application for developing a sustainable funding strategy.

When third sector organisations are developing a funding strategy crowdfunding would seem to come under the Gift Economy – as income from donors. However if we take a closer look crowdfunding donations are not unrestricted income as they are tied to the successful delivery of a specific project. Though the requirements for monitoring and reporting are not the same as for grant income – organisations must deliver the promised rewards, update and keep donors as involved as possible. If there is a slip up – it will do great harm to their reputation with the people who matter.

If an organisation raises money through a successful campaign for its core mission or service then the funds can be categorised as unrestricted.

For start-ups and innovators crowdfunding is reaching out into the open market. If the product or idea is to be successful the campaign has a good chance of success.

The power behind such act is extremely impactful and contagious

Trendwatching takes this into the business world as a key trend in 2011  with even big companies using RAK as part of their marketing/ advertising strategies by doing something for customers which (appears)  random and personalised and thoughtful.This of course strengthens loyalty and generate positive word of mouth.

So what can we take from this for crowdfunding?

Our crowdfunding campaigns should not be cynical marketing to raise profits. They should also be about building community and gaining long-term followers, fans or customers. Take note of the top tips from Trendwatching.

Be genuine - demonstrate a brand’s attitude, not be a (temporarily) welcome exception to it 

Your campaign should be respectful, involve people and show gratitude from the start.

Be personal, but not too personal.

Think about you donors and potential donors and supporters. What can you do, in line with your campaign, that brightens their day?

Be compassionate, not crass – acts of kindness, rather than purely self-serving corporate marketing stunts

The extra reward for someone who has helped you – even though they have not donated enough. If you don’t make a big deal of it – maybe they will – if it has hit the spot.

Make it sharable – give someone a reason to share their R.A.K. with their friends and family

Think about this for your rewards – give two cupcakes not just one; a family ticket not just an adult one or bring a friend for free.

Be generous – really generous to a few people, rather than kind-of-nice to lots of people

Real generosity will spread the word – during or after your campaign (equally as important). A thank you on twitter is not generous. Though you can be kind-of-nice to everyone who supports you too!

Have meaning and purpose – encourage consumers to engage in their own R.A.K. And then (publicly) reward them for it 

Ask them to spread the word and thank them publicly (if they agree). Give a little extra – they have donated time or money after all.

Get real - deliver a R.A.K. right to them, in their daily lives

Though your campaign might be online – real contact is important. Why not Skype a few people, phone when it is free, send a personal e-card?

Don’t intrude, or be pushy, or sell – this isn’t about you or your brand, it’s about the recipient

Crowdfunding is as much about the people who donate as well as your project. It’s about tehir interests and passion and how this dovetails with yours.

There is a whole movement around RAK – have a look at Random Acts of Kindness Foundation

and why would they want to do so? 

People donate to projects because they know and like you; they believe in what you are doing; they want the rewards or desire through a shared passion to see the finished project happen.

But if you can mobilise your professional, as well as your personal networks, not only for donations but also, as important, for their interest in your project and their time and effort in spreading the word.

Professional contacts can help by:

• putting the message out their social networks – telling their friends, mentioning the campaign in a meeting
• inviting you to meetings
• coming with their colleagues to an event you are hosting
• introducing you to people who can help you
• posting on Twitter, Facebook, their blog or website
• writing articles, blog posts, updates or being interviewed

But why would they collaborate with you? Might you be a competitor? Might you be a bit player in their world? They should not see your request for support just to source donations for YOUR project, YOUR organisation or YOUR passion – there has to be something in it for them.

A professional interest in collaboration could stem from

• you are offering a joint venture in which they are partners
• if you succeed in crowdfunding – they might too
• they  hope to gain in some way from the successful project (e.g. a venue would host it, artists work for it, a designer help produce it)
• the campaign raises or promotes issues of common concern
• your project will add to the body of knowledge in the area

Why do you wish to collaborate with your professional networks? If you only want their contacts and money then you are not engaging with their agendas. In the same way as we seek partnership in other projects – seek it in your crowdfunding campaign.

What can you do?

Well you could ask them

We all like a picture that puts us and others (but mostly others) in boxes. Thanks to Smarter Collaboration for the 9 types of collaborator. You will meet people like these (and a mix of the personas and ones that are missed) both in your team and in the people you seek to involve. Ideally your socialite needs to talk to their socialite, managed by the ring leader and bringing on board the others.

The more you think about “THEM” in your campaign – the better, as crowdfunding is not just about YOU.

IndieGoGo says that A good video campaign will earn 122% more than a non-video campaign. The better your video the more likely it is that you’ll get funding.

It is therefore surprising that many campaigns do not have a video on their landing page. 

You are asking for people’s help, so you need to show them that you take your project serious and how much you care. 

Crowdfunding donors are in the main giving to an individual who is passionate about something that interests them 

Before you produce your own spend time researching successful (and unsuccessful) campaigns.

Pick up a camera. Shoot something. No matter how small, no matter how cheesy, no matter whether your friends and your sister star in it. Put your name on it as director. Now you’re a director. Everything after that you’re just negotiating your budget and your fee. James Cameron

General points

Be careful with copyright and ask permission to use photos of people.

Make it under 5 minutes. If you want to show different aspects of your project add these as updates.

Write a storyboard, rehearse, ask for comments and reshoot if necessary.

Make it interesting and engaging. Have a strong beginning and ask for support at the end.

sure it has a good hook.

Using a webcam is a bit limited try a camcorder better. 

Upload to YouTube or Vimeo (better quality) or then link to site. Embed on your blog, website and ask others to do the same

Anybody can direct a picture once they know the fundamentals. Directing is not a mystery, it’s not an art. The main thing about directing is: photograph the people’s eyes. John Ford

Tips illustrated with current campaigns

Involve different people: your customers or service users, their children and pets, people in the street .. FoodCycle Station House Community Cafe  on PeopleFund.it involves customers and volunteers in the pitch. Note: be careful that a video for a community or social impact venture is not dull. It can still have a light touch around the serious issues you wish to raise.

 Tell them what you are doing – show it if you can. If it does not exist then show what you can. Trust Mico, pitching for £50K on Crowdcube, for a customer review site does so by a cartoon.  The pitch for  Uncle Tacko’s Imaginarium, on PleaseFundUs, shows Uncle Tacko and his puppets in role – so you can believe in him.

 A story should have a beginning, a middle, and an end… but not necessarily in that order. Jean-Luc Godard

Target your audience . Bands may want to use humour as well as their music. IndieGoGo’s funniest video of 2011 Dillon Ain’t Playin raised $2390 of a £1500 target raised from 72 funders.

Show your rewards if you can. Borneo Soundscape Project on Fundageek aiming to map the sounds of the rainforest shows this with images and sounds from the area.

Quality – if you are a filmmaker or photographer then your pitch must be of exceptional visual quality. Ludmilla’s pitch video  on Crowdfunder, for a book on Gypsies from Postarka, combines music, photography and quotes and is effective though she is not seen. The more money you ask for – the more professional your video.

Show yourself – be human. Anna and Christine’s face to video pitch for CanRehab on BloomVC is descriptive and informative (perhaps too much so). It could be more varied with use of other images. Henry and Sam’s video pitch The Mongol Rally on Sponsume is human, funny and well produced with the pitchers as true eccentric characters in the story.

And – I love libraries and I love this lady! Saving our public libraries (US)

  I steal from every movie ever made. Quentin Tarantino

Join me

Crowdfunding for building community, raising finance or market testing ideas crowdfunduk.eventbrite.co.uk  

February 2nd 2012  Bridge-5 Mill, 22a Beswick Street, Manchester M4 7HR

and worse

Rewards or perks are an essential part of any crowdfunding campaign.

They 

• are essential thank yous to your supporters for their money or time
• build support in the future for the funded project or your organisation or product
• act as marketing and promotion

They should be creative, tied to your project or mission and be gratefully given.

Here are some low cost rewards or perks from crowdfunding sites across the world that have caught my eye – for good or bad.

The Good – these are low cost, creative, some can be prepared in advance, offer something unique and show gratitude

• Ten minutes in the rainforest – a download of sounds from the Bornean forest plus descriptions (this is why you funded this project – so the sounds could be heard)
• An exclusive collection of unique photos (the subject matter interests you – and this is exclusive)
• MP3 of the first track to be released on the album (before everyone else gets it too)
• Free ticket to the show (and you’ll bring your friends)
• 20% off your purchase from us (this will bring you to the store)
• A chance to use our service free 3 times (3 times!)
• A raffle to win a blouse from the Collection (and you’re worth it!)
• A collection of 4 exclusively designed desktop/Iphone wallpapers available for download (you like the work and an exclusive design definitely appeals) 
• A high-definition digital download of Series I, edited as a full length movie (and you’ll be donating to series 2!)
• Your name carved into a virtual tree within the app forest world (oh yes!)

• A special bookmark you can download
• Full access to pre-edited pictures, that will be posted on the Flickr account
• Signed picture by one of the computer centre students
• A “Thanks for Giving Card” that states you have funded one hour of job training for a youth employee

The Bad – not as clever as the ones above but show some thought

• An invite to the exhibition & eternal thanks (this is OK as long as it is a personal invitation)
• Your name in the credits of the documentary…..and…. OUR ETERNAL GRATITUDE! (what’s with the “eternal” all of a sudden? This is an OK reward because you’d  like to be part of the film you’ve supported)
• You will be named as a founding supporter of the Trust in the forthcoming new Journal when it is printed (as above “founding supporter” sounds good and recognises your contribution)
• A hand written thank you (so few hand written notes are sent nowadays that this seems special!)

And the downright ugly

(now with added attitude!)

• Just the great feeling of being an arts funder! (you may not even get a thank you here – who’s the one being patronised now*)
• Your name on our website (should take all of two seconds in return for your money or time)
• Email receipt for your donation (a receipt – emailed – not even a personalised thank you!)
• Biweekly email update of project progress (all supporters should get this anyway – you are just another name on their database)
• Personalised “Thank you” message sent via Twitter (oh for *@!*’s sake!)

* patronage

1. the support or encouragement of a patron, as for an institution or cause

2. a condescending manner

Join me

Crowdfunding for building community, raising finance or market testing ideas crowdfunduk.eventbrite.co.uk  

February 2nd 2012  Bridge-5 Mill, 22a Beswick Street, Manchester M4 7HR

The Statue of Liberty was a gift from the French for America’s centennial in 1876 to celebrate the French ideals of the republic; the friendship between the countries and the American democracy. France provided arms, ships, money and men to help America win independence from Britain.

The French designed the Statue and the United States provided the pedestal and the site.

The French financed the statue by public fees, a lottery and entertainment.

But as the price for the pedestal soared funds ran out half way through. In 1885 Joseph Pulitzer and his newspaper The World raised the rest in a six month campaign. $102,000 was given by over 120,000 donors (the equivalent of $2.3 million) was donated in 5 months – much of it came in amounts of one dollar or less.

Fundraising activities included prize fights, art exhibitions and theatre. There was a celebrated donation of a poem by Emma Lazurus “The New Colossus” written in 1883 and which appears in bronze on the pedestal. The sonnet was auctioned for the fund.

Pulitzer also publicised the stores which sold statuettes at no profit at $1 (6 inches high) or $5 dollars (12 inches high). These were sold on behalf of the American Committee of the Statue of Liberty.

Lessons for us crowdfunders now

Half the fund had already been raised before the campaign started

Pre-launch pledges are important for any campaign. If you can get 20% immediately this gives great impetus for other donations as people like to back a winner.

Role of the media

Not just social media but websites, blog, TV, radio and newspapers. Publicity will help gather in donations but also publicise your cause or business.

Involvement of celebrities, artists and anyone else

This will get you noticed and lend glamour or credibility to your campaign

Make an emotional cross-generational appeal to the public – to make them feel proud to donate 

If you appeal to children – they can bring in the parents.

Use standard fundraisers such as raffles, meetings, community events etc. These will help build your community and encourage people to spread the word as well as increase donations.

A tiered rewards system

The most popular statue was the one for $1. They did produce a bigger statue as a gaslight but this did not sell as well.

The design of the statue and pedestal was protected by patent

If you are crowdfunding an invention or innovation protect your IP or be willing to open the idea to the crowd.

See

The Statue of Liberty was crowdfunded blog 13.10.10