With the growing popularity of crowdfunding, it seems that everyone wants to launch a campaign to raise money for something. Those who do it well make it look easy, but the truth is that running a successful campaign takes work. In many ways, it’s like running a business: if you want your crowdfunding campaign to succeed, you not only need a plan of action, but you also need to be aware of the pitfalls to avoid.
Here are the top 5 myths about crowdfunding – let these serve as a guide for what not to do when launching your own crowdfunding campaign:
1. If You Build It, They’ll Just Come
Just because you slap up a donation site, doesn’t mean that people will automatically visit it and start donating. Yes, there have been isolated cases where a local story went viral and inspired millions to give, but these are the exceptions, not the rule. The reality is, how you set up your crowdfunding site matters and having a marketing plan matters even more. You need to have a roadmap for how you are going to launch it, build momentum and get people to share by leveraging your social network.
2. My Social Network Doesn’t Matter – I’ll Just Ride the Wave of the Crowdfunding Craze
In actuality, it really is all about your social network and your ability to leverage it. There’s definitely a persistent myth that there are millions of benevolent donors just trolling the Internet to find you and give to your cause. This myth is bolstered by crowdfunding sites that promote the power of their community to support your campaign. For the most part, that’s just not the way it works – people don’t hang around these sites looking to dole-out money.
Approximately 70% of contributions will come from your personal network, so having a plan for how to tap into that is key. Think about how you can build momentum early, make that thermometer rise, and show some traction. Start with the key influencers in your life. Who can you personally tell about your campaign to get them on your side to contribute first? People like to follow the herd; if they see others giving, they are more likely to give, too. But this doesn’t happen magically. You need to think it through and have an outreach plan.
3. If My Cause Is Amazing, That’s All That Matters
Amazing to you, but you’ve got to make your case to others. Having a cause that you are passionate about is important, but it’s not enough. Think of your crowdfunding site like a storefront: it has to be well designed, welcoming and engaging enough to draw people in and incite the desired action. Deposit a Gift’s easy donation mechanism that gives you the freedom to showcase what you’re all about. What are the factors that can do that for you? Pictures, pictures, pictures…and video if you’ve got it!
People like pictures: they put a face on the campaign, showcase what you are doing and enable people to feel a personal connection. Have a clear, thoughtful, succinct story with just enough detail to compel people to participate. The sum of these parts gives your campaign the credibility it needs, so that even someone in the outer rings of your network would want to get involved and be a part of it.
4. All Crowdfunding Sites Are The Same, Especially When It Comes To the Fees
It may seem like all crowdfunding sites have the same fees, but quite a few have hidden fees and you must read the fine print. Also, each site varies regarding your access to the money, what happens if you don’t meet your goal and if they charge you to redeem or restrict how often you can cash-out. Look for a site that gives you the most comprehensive, transparent and lowest pricing, coupled with the flexibility, customization and support that you need for a successful campaign.
Deposit a Gift has a pay-as-you-go model, so there’s no risk in creating a fundraiser and you get to keep all the money you raise, whether you hit your goal or not. Depending on what you plan to raise, the cost is anywhere from 2 to 4 cents on the dollar with our flexible pricing plans and the lowest, most transparent fees.
5. Why Bother Using a Crowdfunding Platform? I Can Just Make My Own Or Put Up a “Donate” Button.
The idea is that you want to give people something to share and connect with. A transactional donation page isn’t built to go viral, but a unique micro-site with a custom URL, easy donation interface and multimedia showcasing your cause is a social media and marketing tool in its own right! With crowdfunding, you need to go beyond the transaction to create a compelling website with the built-in tools to help you reach more people and raise more money. You want something that tracks your progress, shows engagement and makes people want to join your unique and worthwhile cause.