The Three Laws of Crowdfunding

By Anita Gallagher
Training Lead at HIPGive

Wouldn’t it be wonderful if there were thousands of people sitting browsing the internet right now, looking for opportunities to give their money away to social impact projects? 

Unfortunately, this isn’t the case. Publishing your project on a crowdfunding platform makes it more visible and you gain access to the technology to process donations securely, but it’s not magic. No crowdfunding platform can make money appear out of nowhere. So, undoubtedly the work involved in engaging potential donors and encouraging them to give is up to you. 

If you think you have what it takes, the first step to a successful campaign is understanding the three laws of crowdfunding. In the same ways that the laws of nature govern the natural phenomena of the world, the laws of crowdfunding are the inherent qualities that govern successful crowdfunding campaigns. 

  1. The law of INSPIRATION: select a project that inspires your audience. 

In a world in which we’re overwhelmed with information, the way to stand out is through inspiration. While it’s true that some people are more rational and will be swayed by the structure and activities of your project (what you aim to do), the majority of people make decisions based on emotions. The way to engage and inspire potential givers, therefore, is to present a compelling reason why the project is so important (why it must be done) and to spark positive feelings about what it will feel like to be involved in its success. 

In addition, don’t forget that the warm glow of giving can quickly cool off if the giver sees no discernable result. The projects most suited to crowdfunding are those that can be carried out in the short term, ideally 3-6 months after the campaign itself. This way, you can continue to uplift contributors with stories and images of the change they have helped create and they’ll feel inspired to keep on giving. 

  1. The law of INTERACTION: people give to people. 

When asked what the goal of their campaign is, many fundraisers will state that they want people to give money to their organization. They want to pay for an investigation. To purchase a new piece of equipment. Or simply to keep paying the overheads. 

But people? They want to give to other people. They don’t want to give to an organization, they want to give through an organization, right to the people (or sometimes, animals or ecosystems) who need help.

Integrate this basic principal into your strategy and you’ll find it much easier to communicate with your audience of potential givers in a way that is personal, sincere and meaningful. Instead of copy-pasting long, formal, technical descriptions into your project page or emails, imagine you’re talking face to face. Instead of explaining the organization’s needs, focus squarely on people’s needs: who they are and how their life will change as a result of the project. And most of all, instead of just publishing on social media and messaging apps in broadcast mode, remember that these are places of community. Striking up conversations, asking questions and listening to your community is still the best way to make them feel involved and ready to give. 

  1. The law of INTELLIGENT DESIGN: crowdfunding requires a crowd.

No matter how important your project, how creative your graphic design or how inspiring the stories you tell, if you don’t have an audience, you won’t reach your crowdfunding goal. Why? Because no one will find out about the opportunity to give.  

Crowdfunding requires a crowd, and to reach one (or grow the one you have) you need to put in place a smart outreach strategy.  Here are a few ideas for running an intelligent campaign:

  • Define your audience.Talk beforehand about who your crowd is, what characteristics they share and what reasons they have for supporting you. You can’t reach everyone, so don’t try. Focus on your selected target audience and you’ll achieve better results. 
  • Update your email list. It’s a simple move, but worthwhile. Tidy up your current lists and encourage colleagues to add new contacts so you get a bigger bang from each email. 
  • Encourage “ambassadors” to ask their friends, family and colleagues to contribute. Start with staff, Board members, volunteers or loyal donors as they will be most likely to share the projects in their own words with passion and credibility. 
  • Create compelling and shareable content throughout the whole campaign, not just at the start. This not only helps the ambassadors fulfil their role, it’s vital to keeping up the momentum and reaching your goal. 
  • Consider offline media too. The launch of a new campaign can be newsworthy and attract coverage in radio, television or newspapers if you find the right angle.

Inspiration, Interaction, Intelligent Design. Ignore them at your peril as these powerful concepts are at the heart of every successful crowdfunding campaign.

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