and what you can learn from that.

Scrolling through my Sparks on Google+, I came across CauseVox’s blog post. They list the top three take-aways about crowdfunding from Chicago TechWeek. I think they are really useful, so here they are: 

1. For the majority of crowdfunding campaigns, you will be relying on people in the 2nd and 3rd degree to pledge or donate to you. There are outliers that happen that get major press and media, but those are very rare.

This fact reaffirms my hypothesis that crowdfunding is extremely useful for donor acquisition. Your 2nd and 3rd degree connections are not already donors, but your crowdfunding campaign converts them.

How to do you reach these people?

You do this by reaching out to your inner circle (current supporters) to kick off the campaign. A study on the geography of crowdfunding (Agrawal, Ajay, Christian Catalini, Avi Goldfarb. The Geography of Crowdfunding. University of Toronto. January 6, 2010.) reveals that the first round of funding almost always comes from local funders.  Local funders are those people who have an established relationship with the organization. They are your current donors, friends, family, alumni, service users, members, staff, volunteers, and board members.

2. Money doesn’t magically flow to you when you put up a crowdfunding page. You have to work hard to get people’s attention and you have to tell a compelling story that gets people to fund you.

You know that just because you have a Twitter ID doesn’t mean you will automatically get 1000s of followers. You have to give people a reason to follow you. With crowdfunding, just because you post a project doesn’t mean people will give to it. First, people need to know you exist. Promote your project (for the entire duration of the campaign)!  Second, give them  a reason to give with a compelling project posting. Perhaps this order should be reversed, but you get the point.

3. Email is by far the best way to convert people to donations. Social media is a good for awareness building.

There isn’t too much to add to this point: send an eAppeal and make sure you have share functions so that your 1st connections can send it on to their networks.You can use social media to spread the word and build your list. Then send people an email.

And please remember, you are not trying to “convert people to donations.” You are the machine through which we fulfil our need to change the world.

Cynthia