Crowdfunding is a very popular and powerful way to raise funds. It is a $34.4 billion dollar industry that launches products, makes dreams come true and provides funding for people with life and medical emergencies.
With the holiday season rapidly approaching and people fundraising for different causes, it's a good time to dispel four common fundraising misconceptions.
If you're using a fee-based platform such as GoFundMe, there are fundraising fees that range from 5% to 10% of funds raised plus processing fees per transaction. On free, donation-based platforms such as FreeFunder, you can give your backers a big “thank you” by avoiding platform fees. The payment processor still charges a small fee regardless of platform fees.
Promotional and video costs should also be factored in, if you plan to use external resources.
It is important to remember these fees and potential expenses when you set your funding goals.
Crowdfunding is equal parts science and art. Sometimes you can follow best-practice tips and have success. But everything doesn't work for everybody. Success will likely require some effort.
To differentiate your campaign, you should have a plan. From social media promotion to getting press, know where to go and who to tell before, during and after you launch. A solid plan helps you keep the momentum going.
Work the plan. The extra effort can make a big difference.
Crowdfunding usually starts with family and friends but rarely ends with them. Most people hear about campaigns via the press, social media or word of mouth. So unless you've had a highly-publicized event or emergency, or the platform features your campaign, you'll have to bring the crowd (aka your family and friends).
This one is tricky. Successful fundraising may take a day, month or longer. Some fundraisers actually reach their goals within hours. No two campaigns are the same. It is about reaching the funding goal, not how fast you get there. Set a goal. Make a plan and be patient. It is the quickest way to success.
Overall, crowdfunding is a great way to raise funds. To be successful make sure you don't get caught up in any of these myths.
When Nancy Dear hit some rough times and needed help in order to pay her rent (both personal and for her hair salon), she set up a FreeFunder campaign as a last resort. Friends and community members starting pitching in immediately. Nancy needed $2,500 in order to get caught up, and after donations came in from 59 people in only 2 weeks, she ended up raising $2,655.
"Yesterday was particularly rough, but I made it through, got a hefty pile of sleep, and woke up this morning to the beautiful miracle of community support! THANK YOU THANK YOU THANK YOU!!! You have saved my business baby, saved my home, saved me. I LOVE YOU. HAIRPARTY LOVES YOU. YOU ARE AMAZING. " - Nancy Dear