CROWDFUNDRAISINGApril 29, 2014
Crowdfundraising
Introduction
Cindy Eller, Vice President for Development & Executive Director, Roswell Park Alliance Foundation
Karen Cincotti, Assistant Director Web & IT Operations, Roswell Park Alliance Foundation
Why Us?
Why Us? • NACCDO centers were approached over a year ago by
a cancer patient who wanted to give back• He created a cancer only focused crowdfunding site
called CureCancerStarter.org• Founding partners were:
– Roswell Park Cancer Institute– UNC Lineberger Comprehensive Cancer Center– Duke Cancer Institute– UW Carbone Cancer Center
Why Us?
• Site went live in October, 2013 with 5 campaigns• Brain Cancer Vaccines• Benefits of Fibrocytes in Cancer Car• Taking a Closer Look at Vitamin D• Treating Cervical Cancer Better Faster via UNC Malawi Initiative• Personalizing Treatment for Colorectal Cancers
• Only 1 campaign achieved their goal of $5,000
What Happened?
Why Us?
• There was no marketing plan to promote the site
• The centers were looking to the website staff to promote to get them new donors
• The centers were reluctant to promote to current donor base
• Hence no traffic
IF YOU BUILD IT
THEY WILL COME
Why Us?
• Decided we needed to develop a marketing plan and conduct more research on crowdfunding options.
• This is a part of our
FINDINGS…
Why?
Why Research?
Why Crowdfundraising?
Why?
The Numbers
• 2012 - The overall crowdfunding industry has raised $2.7 billion, across more than 1 million individual campaigns globally. More than ½ from sites based in North America.*
• 2013 – The industry is projected to grow to $5.1 billion.
• 2014 - Crowdfunding will top $10 billion.
* Data form Crowdfunding Industry Report by Massolution
Why?
We cannot ignore this
growing trend and online
medium.
Benchmarking Results
NACCDO 2014 Benchmarking Survey• Which platforms are being used:
Benchmarking Results
NACCDO 2014 Benchmarking Survey• Types of crowdfunding programs:
Benchmarking Results
NACCDO 2014 Benchmarking Survey• Who manages your crowdfunding:
Benchmarking Results
NACCDO 2014 Benchmarking Survey• Number of crowdfunding campaigns completed:
Benchmarking Results
NACCDO 2014 Benchmarking Survey• Main audiences for your campaigns:
Benchmarking Results
NACCDO 2014 Benchmarking Survey• Money raised from crowdfunding in the last 12 months:
What is it?
What is Crowdfunding
First let’s define Crowdsourcing
“Obtain (information or input into a particular task or project) by enlisting the services of a number of people, either paid or unpaid, typically via the Internet.”
• Combination of the words 'crowd' and 'outsourcing’
• The idea is to take work and outsource it to a crowd of workers
What is Crowdfunding
Crowdsourcing
• Famous Example: Wikipedia• Gave the crowd the ability to create the most comprehensive
encyclopedia in the world
• The underlying principle of crowdsourcing is that more heads are better than one
What is Crowdfunding
Definition of Crowdfunding
“The practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the Internet.”
Crowdfunding is a type of Crowdsourcing.
Crowdfundraising is a variation of
crowdfunding to meet fundraising goals.
Crowdfunding & Nonprofits
Nonprofits have been crowdfunding for years
• In 1949, Milton Berle hosted the very first telethon for the Damon Runyon Cancer Research Foundation
• A little over $100,000 was raised in 16 hours – one of the earliest example of public nonprofit crowdfunding
Crowdfunding is simply the act of accruing micro donations to reach a larger goal and now it is online and available to the masses.
Review of Commericial &
Non-Profit Crowdfunding Projects
Examples
Commercial Examples
Movies
Commercial Examples
Movies
Music
Amanda Palmer, Grand Theft Orchestra
Commercial Examples
Movies
Music
Electronics
TikTok + LunaTik simply transform the iPod Nano into the world's coolest multi- touch watches
Commercial Examples
Movies
Music
Electronics
Start Up Toy Company
(seed money)
Commercial Examples
Movies
Music
Electronics
Start Up Toy
Company
Or the “10 Year Hoodie” - raised over $1M so far
Non-Profit Examples
State of Minnesota - GiveMN • Raised $16.3 million in 1 day in November, 2012• Razoo.com
Non-Profit Examples
Tesla Science Museum • Raised $1.4 million• Indiegogo.com
Non-Profit Examples
DonorsChoose.org – • Since inception has raised $225 million and helped more
than 175,000 teachers fund over 400,000 projects
Non-Profit Examples
University College of San Francisco Medical Center
Challenge for the Children • Raised over $1 million• Causes.com
History
History of Crowdfunding
1997 – First instance of modern day Crowdfunding (British band funded their reunion tour)
2000 – ArtistShare – first dedicated platform
2005 – Kiva.org was the first microlending website, lending small amounts of money to entrepreneurs in poor, rural areas around the globe
History
History of Crowdfunding, cont’d.
2006 – Prosper.com - first peer-to-peer lending site
– Term “CrowdFunding” is first used
2008 – IndieGoGo.com launches - platform for films
2009 – Kickstarter.com launches as a new way to fund creativity
Growth
Growth of ALL Crowdfunding Platforms
2012 – 452
2014 – 800 and growing
Crowdsunite.com – “There are over 800 funding websites globally and every week new ones are created for specific demographic, region or category”
Growth
Growth of Crowdfunding
2011 – $1.5 Billion
2012 – $2.7 Billion
2013 – $5.1 Billion (projected)
2014 – $10 Billion (projected)
Growth
Number of US Donation Based Crowdfunding Platforms*
– 93 platforms available for donation based projects
–>> 54 platforms available for Non-Profit organizations
* As listed on Crowdsunite.com which reviews crowdfunding sites. The number continues to grow and you can see our choices are numerous.
Types
Types of Platforms
Types
Types of Platforms, cont’d.
Equity-based & lending-based (for financial return)
– Is most effective for digital goods (e.g., software, film and music)
– These categories, on average, raised the largest sum of money per campaign
Types
Types of Platforms, cont’d.
Donation-based & for cause based campaigns (for intrinsic reward)
– Perform best in reaching goals
– BUT the money raised in these categories are much smaller, with 2/3 of them generating less than $5,000
Donation Campaigns
Majority of donation based campaigns raised less than $5,000
Only 10% raised over $10K
Typically majority of money raised is within 1st or 2nd ask from fundraiser
* Data form Crowdfunding Industry Report by Massolution
How it Works
Parameters of a Successful Crowdfunding Campaign
1. Concrete Goals
2. Transparent
3. Rewards
4. Social
How it Works
Need to be Goal Orientated
– have tangible results for funds raised
– restricted vs. unrestricted funds
– focus should be on what the money raised can do, not just talk, but specific, if we raise $10K we will be able to:
- perform XYZ research,
- XXX number tests of on patients
- buy this equipment to complete research
How it Works
Have a Specific Fundraising Goal
– Have a specific goal for each campaign or project, whether it is $5K, $25K or $13,250 – you need to determine an amount that is your goal
– You can raise more but your stated goal should be reflective of the amount that is needed for the specific research or initiative
How it Works
Short, Specific Time Frame
– Crowdfunding projects have start and end dates
– 30 days, 70 days, 120 days
– There is a trade-off between giving your audience sufficient time to engage with the campaign and losing momentum because of a timeline that is overly long
– According to insights released by Indiegogo, the
optimal campaign length is 45 days
How it Works
Personal Involvement of Fundraiser (i.e. researcher)
– Gives donors the opportunity to meet (vicariously through the website) and see results from the researcher
– Provide content, i.e., videos, blog updates, so they become connected to the researcher
– Makes the donor feel involved in the process
How it Works
Importance of Researcher
– The researchers have to keep their donors up to date and give them progress reports (part of their rewards)
– Need to continue to show them how their funding has helped and contributed to the process
One of biggest keys to success is to engage the researcher/doctor/fundraiser in the campaign.
How it Works
Reward Donor
– Equity and lending sites specifically offer tangible rewards for their donors
– Donation based campaigns should also reward the donor by giving them the updates as described
– This is the intrinsic, emotional reward
How it Works
Reward Donor, cont’d.
– Some non-profits also provide tangible rewards
– actual goods - t-shirts, bags, gift cards, etc.
– access - hospital tours, event tickets, lunch with researchers
– special content (video updates, personalized letters)
– publicly giving credit
Remember to plan for what you can actually handle in terms of fulfillment before you promote the rewards.
How it Works
Social Involvement & Online Sharing
– Crowdfunding is an online initiative
– The campaign grows through your online donors
– Give donors the tools to tell people what they just donated to, we need them to PROMOTE for us
– And you need them to continue the conversation with their networks by giving them continued content to share
How it Works
Social Involvement & Online Sharing, cont’d.
– The content THEY post and share is most trusted
– YOU NEED TO HAVE THEM SHARE
How it Works
Review - Parameters of a Successful Crowdfunding Campaign
1. Concrete Goals – specific time frame and
fundraising goal
2. Transparent – where the money is going, keep up to
date on progress
3. Rewards – actual or intrinsic rewards
4. Social – need them to share online
Online Options
Constituent vs. Organizational Crowdfunding
Centers have the option of:
– sponsoring a campaign or
– letting their constituents do it for them
Online Options
Constituent Ex. – Miami’s Children Hospital
– Mike Fernandez– Personal fundraiser
where he walked across Europe to raise money for the hospital
– A crowd of friends and contacts raised over $1.4M
Online Options
Organizational Ex.– Univ. of California, Promise for Education
– Created a crowdfunding campaign to rally their networks for support
– Over $1.3M raised for undergraduate scholarships
Online Options
Constituent vs. Organizational
Online Options
With constituent crowdfunding
– We can leverage our already inspired supporters to fundraise for our mission through their own personal networks online
With organizational crowdfunding
– We can leverage our messaging, our content, and our research, to encourage existing and new constituents to help us raise money for a specific goal
Online Options
Company Branded vs. Commercial Platform
Centers also have the option of:
– having a Company Branded (white label or internal initiative) site
– or list their campaigns on a Commercial Platform
Online Options
Company branded (white label or internal initiative)
– A singular site for the organization’s initiatives– Completely branded by the Center with no platform
branding– Highlights Center projects only– Built internally OR using a provider’s white label option– If built internally no costs or fees are paid to a 3rd party– If built using a provider’s white label option additional
fees will apply
Online Options
Company branded example – Cornell University
Online Options
Company branded example – Children’s National Medical Center
Online Options
Commercial Platform
– Platforms where we can jump right in and start a campaign without any custom build
– Other centers and their constituents are also on these sites
– Some have large network of followers looking across the different causes
– Sites are templated with an easy to use CMS system– Costs and policies are dependent upon the platform
Online Options
Commercial Platform Example – Causes
Online Options
Commercial Platform Example – Indiegogo
Online Options
Internal vs. Commercial
Evaluating Crowdfundraising for your Center
– What criteria should be used to evaluate if your center should participate in crowdfunding
- Why?- Where?- What platform?- What projects to fund?- What resources are needed?- What are the risks and rewards?
Evaluating Crowdfundraising
I. Why consider crowdfundraising?
It can be a key component in your digital strategy
Additional gifts from online donors Additional gifts from mail donors to online donors Part of a peer to peer fundraising strategy Part of an acquisition strategy for new donors
Evaluating Crowdfundraising
Evaluating Crowdfundraising
Value of online donors• Higher gift value
• More efficient renewal and communications cost
Evaluating Crowdfundraising
Evaluating Crowdfundraising
Acquisition:
According to our consultant Grizzard, the percent of revenue from new donors should be in the range of 20%
At Roswell Park it is 8.9% and our mail market is aged and shrinking
Crowdfundraising as a acquisition vehicle
• To secure new donors from patient and prospect lists; new out of market disease site interests
• New from cross pollination with others on the site
• Peer to peer fundraising vehicle for highly engaged donors and advocates
Evaluating Crowdfundraising
Evaluating Crowdfundraising
Ask yourself:• Do you have a plan to engage trending
online boomers and up and coming younger generations?
• Does your fundraising channel mix include mail and digital communications?
• Are you empowering your most enthusiastic supporters to fundraise and evangelize online on your behalf?
Multi Channel is the new norm
The ideal mix varies from generation to generation
Evaluating Crowdfundraising
Donors routinely respond to direct mail pieces by making an online donation
Online donors switch back and forth between internet and direct mail
ROI is not as straightforward
Evaluating Crowdfundraising
Evaluating Crowdfundraising
Evaluating Crowdfundraising
“Keep your eye on the bouncing ball”
• Boomers likely to be a dominant source of income at least next decade
• Need to optimize the mix for boomers while opening the door to younger donors
True or False: Digital is for young people and offline engagement is for old people.
The TRUTH is, ALL generations value a mix of online and offline.
Evaluating Crowdfundraising
According to the “next generation of American giving”
• The most promising future fundraising strategies include peer to peer fundraising and crowdfunding
Evaluating Crowdfundraising
Note: • There is little evidence that social media
is growing as a transaction channel
(not donating through social networks- i.e. Facebook)
• Growing evidence that social media is an important stewardship role
Evaluating Crowdfundraising
Evaluating Crowdfundraising
Evaluating Crowdfundraising
Evaluating Crowdfundraising
II. Decision to go for it!
First Step: Choosing a Platform
“Research indicates the choice of platform is the strongest factor influencing the potential success
of the program.”
Incorporating Crowdfundraising
Home grown alone? Home grown with similar entities?
(healthcare site?) Selection of a pre-existing commercial
entity (52 choices)
Incorporating Crowdfundraising
Online Options
III. Making it happen!
• Committing the necessary resources; creating the team
• Not something development can typically do alone- needs expertise from other specialties in house
Implementing Crowdfundraising
“The Team”• Web- online team• Finance/backend- gift processing• Creative- creating the videos• Researchers- engaged, entrusted,
committed (i.e. updates)• Marketing- driving the traffic
Implementing Crowdfundraising
“The Team” cont….
Communications Staff-
Supporting it with social media and other ways to keep awareness high of funds to date against target and create momentum; report back on success of project at completion of research effort
Implementing Crowdfundraising
IV. Deciding what projects to feature on your site?
• Can benefit from a small gift total• Can appeal to a specific disease group (i.e.
disease sites or genetics)
Building Your Crowdfundraising Campaign
Building your case
• Should be a 1-3 minutes long with a compelling video
• Concise and clear- who and why funds are needed
Building Your Crowdfundraising Campaign
Crowfunding Example - Multiple Sclerosis
Leukemia Crowdfunding
Setting Your Goal
• Make sure goal is realistic. • Should be able to raise 25-30% from within your
own network• Strangers will want to see traction to get excited
about your campaign• Generally don’t stop funding once a goal has
been reached
Setting Your Goal
• For larger projects consider multiple campaigns with smaller funding goals for each stage of the project
Crowdfunding Example degenerative diseases
Setting Your Goal
Length of Campaign
How long?
• Longer does not mean that you will raise more- the longer the campaign- the harder it is to build a sense of urgency and momentum
• ~ 40 day long campaigns are most successful• Successful campaigns generally raise 30% of
goal in the first two weeks, slows down in the middle – keep ,momentum going
Non Profit Perks
Examples:• Listing as supporter on website• Personalized, signed donor certificate or plaque• Annual updates about progress of project• Listed as a patron at lab location• Invitation to conference for scientists, patients and
donors where progress made will be presented
Non Profit Perks
Continue to add new perks during campaign:
20% of repeat contributors are for perks added after the campaign went live
V. The Cure Cancer Starter Model
https://www.curecancerstarter.org/
• How it came to be• List of participants:
UNC Lineberger Cancer Center (Chapel Hill, NC)
Roswell Park Cancer Institute (Buffalo, NY)
Duke Cancer Institute (Durham, NC)
UW Carbone Cancer Center (Madison, WI)
• Status- “suspended hold”
A Cancer Only Crowdfundraising Site?
Risks and Rewards
• Potential of diluting or losing donors to other centers• Opportunity to strengthen existing and acquire new• Strength in numbers driving interested cancer donors-
prospects• Clean and easy to access vs. being lost as one of
thousands on a commercial site
Cure Cancer Starter Platform?
Cure Cancer Starter Platform?
Next steps for a Cancer Cure Starter?
Circle back and evaluate with the funding group the required investment in an online marketing strategy
Reinforcing the need for “team” engagement not just development reps
Determine future directions of the site and partnership
Questions?
THANK YOU