CROWDFUNDING FOR A CAUSEHOW BROAD BASED FUNDING MODELS ARE CHANGING TRADITIONAL PHILANTHROPY

GARRETT GOLDBERGIDAHO NONPROFIT CENTER – 10 T H ANNUAL CONFERENCESEPTEMBER 27, 2013

QUICK CROWDFUNDING OVERVIEW• CF is a method of soliciting small amounts of

investment from a large group of people (micropatronage)

• Sometimes equity and sometimes for goods or services

• Companies can more openly advertise for funding as SEC has lifted the general solicitation ban

• How new generation is starting to (and will) support its favorite causes – including charities

PROGRAM RELATED INVESTMENTS [PRI]• CF is consistent with PRIs:

• Sometimes equity and sometimes for goods or services

• Furthers mission and expects accountability

• Foundations have more leeway (and less penalty) to make investments

• How new generation is starting to (and will) support its favorite causes – including charities

CASE STUDY

Trey McIntyre Project

http://www.kickstarter.com/projects/treymcintyreproject/ma-maison-a-documentary

QUICK CROWDFUNDING FACTS536: estimated number of crowdfunding sites [2012]

$2.7B: estimated volume of funds raised on crowdfunding sites

[2012]

$5.1B: estimated volume of funds raised on crowdfunding sites

[2013]

• Donation based crowdfunding increased by 43% in 2012, representing 29% of the market share.

• SOCIAL CAUSES was the most active crowdfunding category in 2012, with almost 30% of the activity

• The average successful crowdfunding campaign is $7000 and last for 9 weeks source: www.startingtrends.com

DEVELOPING A THESIS1) Concepts vs. Projects [new PRI rules]

• Crowdfunding inherently helps nonprofits define project scopes and goals, thereby increasing accountability to the donors; consistent with PRI

2) Joint Conversation on Accountability

• Given the changing landscape of funding models (both for profit and nonprofit), this is an opportunity for a joint discussion to shape path forward

3) Group Thoughts?

KEY ASPECTS TO A CROWDFUNDING CAMPAIGN

1) Tell Your Story

2) Provide Value for Value

3) Introduce Scarcity

4) Create a Marketing Event

5) Highlight Examples of Social Proof

6) Build Credibility and Legitimacy

7) Interact with your Supporters