Useful Tools: Crowdfunding

Photo credit: Rocío Lara via / CC BY-SA

Every month I’ll be highlighting a free or low-cost tool that community groups and not-for-profits can use to improve their marketing and communications. This month’s focus is on crowdfunding.

‘Crowdfunding’ refers to raising money from a large number of people to fund a project, small business, charity drive or other enterprise. The most common way to do this is through an online crowdfunding site. There are a substantial number of crowdfunding sites around, and many focus on specific types of projects or industries.

Regardless of their targeted industry, crowdfunding sites tend to work in similar ways. A person seeking funding proposes a project, a funding goal and a timeframe. Supporters pledge to make a certain contribution, often for a small reward (the rewards increase in value the higher the pledge). If the funding goal is reached in the timeframe, the project is fully funded and supporters are contacted to contribute their money. If the goal isn’t reached, the project is not funded and no money is collected (an ‘all-or-nothing’ model). However, on some sites—particularly charity-focused ones—the proposer gets to keep whatever money is pledged, even if it falls short of the target (a ‘keep-what-you-get’ model).

A few of the major crowdfunding sites are detailed below. Some of these are for-profit sites, meaning they charge a commission and/or set-up fees, while others are non-profit. Do your research and make sure you choose a platform that suits your needs.


Kickstarter is a crowdfunding platform for the creative industries—it focuses on helping artists, designers, musicians, filmmakers and other creatives fund their work. It uses an all-or-nothing funding model, so if your project fails to meet its target you don’t receive any money.


Indiegogo is open to all projects, from inventions to entrepreneurial start-ups. It is a for-profit enterprise with 5 per cent platform fees and both all-or-nothing and keep-what-you-get funding models.


Like Kickstarter, Pozible is focused on the creative industries, but has a wider scope of projects. Its fees vary, from 5 per cent for projects of less than $100,000, to 4 per cent for projects between $100,000 and $500,000 and 3 per cent for projects over $500,000. Its funding model is all-or-nothing.


Gofundme is a personal crowdfunding website, meaning it focuses on personal causes such as medical expenses, volunteering trips or funerals. Because it is charity-focused, supporters don’t get rewards for contributing particular amounts; rather, the premise relies on giving the supporters a feeling of altruism.

Gofundme also has a charity arm, where people can start a fundraising project for a charity from the organisation’s list of registered charities (which are all US-based) and then encourage their friends to donate.

Unlike other crowdfunding sites, Gofundme does not set time goals, so the campaign can continue for as long as the organiser wants. Its fee is 5 per cent and its funding model is keep-what-you-get.


Chuffed focuses on non-profit and social enterprise projects. It is a non-profit organisation and its funding model is keep-what-you-get. It does not charge administration fees.


Patreon also targets the creative industries, but unlike other crowdfunding models, it aims to provide ongoing rather than one-off funding (based on the traditional idea of patronage for the arts). While the aim of a Kickstarter campaign is to get support for a specific project, Patreon campaigns are about fans funding the creator rather than the project. ‘Patrons’ provide a tip of a specified amount either monthly or every time the creator releases a new piece of content, and can set a monthly maximum. In return, the artist will offer an exclusive package to their patrons, which may include things like complementary tickets, tutorials or a regular Q&A session.

In principle, crowdfunding sounds like a fantastic way to get a project off the ground, and there is no question that it has given life to projects that otherwise wouldn’t have seen the light of day. However, it is also not something to be undertaken lightly, and its success rates are generally low. According to Kickstarter, 305,250 projects have been launched since the site’s inception in 2009, of which 107,799 have been successfully funded, giving it a success rate of around 35 per cent.

Before you launch a crowdfunding campaign think carefully about a few things:

  • Where will the money will come from? This comes back to having an existing audience.
  • How will you drive traffic to your campaign site? You will need a marketing plan for your crowdfunding campaign, which you should incorporate into your overall communications and social media strategies (see Part 1). This includes producing a professional-looking video about your project, as this is the thing that will (hopefully) be shared widely on social media. Don’t try to do this on a shoestring.
  • What do you offer that’s unique? Maybe you already have an established fan base and you’re offering them something that they desperately want—your next book/album/artwork/invention. But if you don’t, what is it about your project that will draw people in?
  • What rewards will you offer your supporters? Be creative here—don’t just give them a sample of your eventual product. Think about what will most encourage people to donate. You need to offer them something of value in terms of either a product or an experience.

Crowdfunding can be a great way for cash-strapped volunteer organisations to achieve otherwise unreachable projects. But, like all fundraising and marketing, it needs to be approached strategically, with a good understanding of what you want to achieve and how you plan to do it, or it is likely to fail.


Published by lmmerrington

L.M. Merrington is a freelance writer, editor, academic and communications professional. Her journalism and academic writing has appeared in The Age, The Sydney Morning Herald, The Bulletin, East Asia Forum, Inside Story and South Asia Masala, among others. Her first novel, Greythorne, will be published by Momentum Books, Pan Macmillan Australia’s digital imprint, in 2015. She is currently completing an academic monograph, India and China in the Asia-Pacific, 1890–2030, and working on her next novel.

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