Two weeks ago a new crowd funding platform was launched in Scotland: SoLoCo – which, as they said, is an ‘Obama-style’ fundraising platform for the voluntary sector (to be honest, I’m not sure if it was they or someone else who said it but you get the idea).
In case you’ve been living on the moon for the past few years, Obama and his team raised impressive amounts of ground level support – and funds – through a well-thought out, original and well-executed online campaign that captured the imagination of ordinary Americans in the lead up to his historic election. (And the fact that I can’t imagine Dave Cameron or Ed Miliband achieving the same probably illustrates (yet another way) that the US differs from the UK).
Crowd funding has mainly been used to raise start up funding for small businesses and social enterprises but, of course, it was only a matter of time before the innovators in fundraising saw its potential. Of course, using the power of many to help meet funding needs isn’t a new phenomenon – think of Comic Relief’s annual fundraising event or the direct mail that pops through your door from large national charities ranging from cancer to animal welfare and everything in between. The key difference, apart from the delivery mechanism, is that crowd funding brings the power of mass fundraising to small organisations that have neither the resources nor brand recognition that would warrant the spending required for a large direct mail appeal.
And, while these sites are dedicated to crowd funding, there are also existing social media platforms that can be used to help organisations with their fundraising aspirations and goals. The best know being Facebook. A couple of months ago, SOFII featured a case study on their blog about the Soi Dog Foundation’s hugely successful Facebook campaign, which raised an unprecedented $300,000 AUD – through using Facebook alone! This is a fantastic success story about the power of the internet to raise funds without costing a significant amount of money (although, I suspect that it still required a high level of commitment in terms of time to get off the ground at least).
Last week, the Big Society Network launched Spring: an initiative that aims to help develop and support technology enabled giving and philanthropy. According to their website, “Spring aims to realise the potential of technology to enable people to make smarter choices in giving their time and money. Spring will focus on exploring how we use technology to give and raise money, time and expertise in the UK.” I have to admit to a level of scepticism about the UK government’s so called Big Society. However, given the emergence of WeDidThis, SoLoCo and others in the UK, as well as the opportunities to fundraise through social media platforms, such as Facebook, any real research into the potential impact of this type of fundraising should be welcomed – particularly if it can help charities and donors to make informed decisions.
Crowd funding and crowd sourcing, as well as the use of other forms of social media, have taken the online world by storm. They are a fantastic way of engaging with new donors and encouraging them to support your campaign or project by making a small donation while neatly demonstrating to them the impact their small donation will have on your organisation. Projects are often looking for small amounts; they can be effectively illustrated online; the donor can see how their donation has impacted on the target immediately and – perhaps most importantly – despite the fact a donor may not be familiar with an organisation at all, if the target is not met the donations are returned to the donors. They’re not spent on something else and they’re certainly not squandered. So donors know that their donation is being spent on your project regardless.
Crowd funding has been hugely effective in the US. Initially launched in 1997 in the US when fans of the band Marillion used it to raise funds for a tour of the States, it has achieved real success across the Atlantic where New York based, Kickstarter has received pledges of $35 million. However, the flip side of this is that only 45% of projects submitted to the site have reached their target so, while the results have been considerable for some, it hasn’t worked so well for others. It is still relatively untested in the UK and, while the arts have been early adopters of this type of fundraising, it is still yet to be seen whether or not we can emulate the success stories of the States over here, although early signs are hopeful. And, of course, perhaps initiatives like Spring can help the sector to establish effectiveness and make a real impact on crowd funding for the good – we’ll just have to wait and see.
One final word of caution (I’m a fundraiser, it’s my job!). Diversification is key to any successful fundraising strategy, which means that I wouldn’t advocate either using social media as your only type of fundraising or – worse still – dumping all the methods that have worked for you in the past to focus your efforts on something new. However, social media fundraising can be a cost effective, creative and inspiring way to engage with a new audience of online donors, helping to increase awareness of an organisation and boosting brand awareness. It certainly seems to be here to stay for the foreseeable future so may well be worth your organisation considering as part of your overall funding mix.
Further Reading (some examples of crowd funding sites):