By Neha Shukla, Social Media Editor, OHO
Raising sufficient capital to fund their projects can prove to be a challenge for many social entrepreneurs. Traditionally they’ve relied on the conventional methods of raising capital such as loans from financial institutions, government grants, private donations, social fundraising events etc. But thanks to the Internet, amazing new possibilities are now available to anyone who wishes to raise money to fund a community project.
Crowdfunding is a relatively new phenomenon that is gaining traction at an accelerated phase around the globe. Crowdfunding platforms collectively raised $2.7 billion and successfully funded more than 1 million campaigns in 2012. For 2013, the forecast figure were $5 billion worldwide!
Due to the vast reach of the Internet, crowdfunding websites are becoming increasingly popular with entrepreneurs, artists, event organisers and the likes seeking capital for their projects.
In line with the worldwide popularity of this revolutionary new medium, crowdfunding is gaining impetus in Australia too. The table below shows the crowdfund investing platforms in various countries.
The rules and regulations around crowdfunding in Australia are still in quite early stages, but Australian Government’s Corporations and Markets Advisory Committee is conducting a review into the laws governing Australian equity raising, to make them compatible with crowd sourcing. This means that investors will be able to buy equity stakes in the startup businesses, indicating that crowdfunding is fast gaining momentum as a preferred choice of capital raising.
There is a wealth of information available on how to make your crowdfunding project a stellar success but there are some basic tips to consider beforehand.
Gather your forces. You may already have a support network viz. your regular supporters, friends/family, staff etc. But for successful fundraising you will need to create and reach a bigger crowd. Sharing his experience, One Health CEO Jimi Wollumbin said, “An important point I have learnt is that crowdfunding is probably better thought of as ‘peer-funding’. Some people mistakenly think that just by launching their campaign on a website would mean that some big enormous crowd will get behind it. This rarely happens. Generally the appeal is as big as your own database plus 10-30%. To get something to ‘go-viral’ requires an exceptional campaign.”
Make the most of social media to make new connections. Social media is a great tool to reach people outside of your inner circle and make new connections. It helps break geographical boundaries. Use interesting and relevant information to develop a support network for your cause. Set up a Pinterest profile with great relevant photos. Utilise LinkedIn and Google+ to draw in your professional circles. Keep regular updates flowing on Facebook and consider allocating a small amount of funds to promote the key posts. YouTube is also a powerful media to share engaging videos about your project. Short, interesting videos simply shot on a smart phone can make a huge impact in telling a genuine story.
Keep it simple and small. It’s easier for people to digest small pieces of information. Try to break down a huge project into smaller sub projects e.g. seek funds for buying books rather than donations to build a whole library. Smaller projects are also easier to manage and report on.
It’s personal. People support what they like, feel passionately about and engage with. Hence it is important to put a human face to your campaign. Make it personal by sharing your story or the stories of the people you are trying to assist through your cause. How many families would benefit from the new books bought though your project? Who are those families? What are their hopes and aspirations?
Choose your platform carefully. There are many crowdfinding websites and new ones are being launched regularly. Research them carefully and choose the best fit for your project. Some popular Australian platforms for community initiatives are:
Speak up. Seek and explore the new, innovative and freely available tools on the web to let the world know about your project. For instance, Thunderclap, a crowd-speaking platform, blasts out a timed Facebook Post or Tweet from all your supporters, creating a wave of attention; provided enough people support your cause/message.
Just like any other form of fund-raising, crowdfunding is hard work. Many social enterprises have been able to raise huge funds, but it requires dedication and organization, so plan your campaign well before launching it.
Have you used crowdfunding to raise funds for your project? Share your experience with us on our Facebook page or leave a comment.