A guide to Tokyo art galleries. An iPhone case that doubles as a tripod mount. And an ad for “The Story of Stuff” during A&E’s Hoarders. What do these three things have in common? More than you might think.
Each is representative of a new trend in social media: crowdsourced funding of projects that allows individuals to put their money where their mouth is on ideas they find compelling. Using a service called Kickstarter, or a newly launched site intended specifically for funding cause-based ads called LoudSauce, an individual sets up project, detailing the amount of money they need to realize their vision and a deadline for raising it. They’re then responsible for publicizing the project in order to get people to kick in small amounts (typically incentivized with some product or service on Kickstarter) to try and reach the goal. Kickstarter users pay via their Amazon.com account, which acts as a sort of escrow service– no one pays unless the project is fully funded (LoudSauce just completed a limited Alpha phase of projects, and will likely do something similar with its projects).
ArtSpace Tokyo, the guide mentioned above, is a great example of the kind of projects that have proved successful on Kickstarter. Developed by a Tokyo-based writer/ designer/ web-guy named Craig Mod, it took a book he had written several years before that had fallen out of print and promoted the project to his extensive network of contacts in the design and publishing world. In the end, he was able to raise $24,000 in 30 days– enough to fund the reprint of the book and provide seed capital for Mod’s experiments with book publishing on the iPad. Mode took the time to write up an excellent case study of the project, detailing his thinking on setting the contribution levels, developing the marketing strategy, and even the breakdown of the timing and amount of the contributions he received– invaluable information for anyone hoping to crowdfund a project. The makers of the Glif, the aforementioned iPhone case, likewise provide a fascinating case study of two designers going from idea to finished product– via 3D Printing, overseas manufacturers, and some saavy marketing to niche bloggers– in just five months.
The third example above, “The Story of Stuff” promo on Hoarders, is even more exciting for nonprofits. As one of the first two projects on LoudSauce, they raised more than $3,000 to reach an estimated 2 million viewers of the program. I had a chance to talk to Chrstina Samala, Director of Online Media & Strategy at the Story of Stuff Project about their experience. Here’s what she had to say:
As an experiment, it was a real success for us. I met Colin and Christie [the co-founders of LoudSauce] socially, and the idea of doing an ad for “Story of Stuff” as part of the LoudSauce Alpha came up. We ended up promoting it exclusively to our personal networks– we have a big e-mail list for “Story of Stuff,” but we wanted to see if we could tap a new base of supporters who migth not otherwise donate. It turns out we could, and we would definitely do it again.
So, what lessons can nonprofits interested in trying something like this learn from these examples?
1. You’ve got to have a plan. Outreach is the key to crowdsourced funding. If the right people don’t hear about your project, they can’t support it. Being strategic about e-mail correspondence, social media and outreach to bloggers who might be interested in the topic can make or break a project (Mod’s case study, in particular, does a great job of explaining his experience with this aspect of the project). As a nonprofit you probably have a pretty good list of people who care about your work, but that’s not enough, because
2. You should try to reach beyond the choir. The beauty of these projects, as with much of social media, is the way they can expand the base of support for your cause. It’s far more useful to bring in a new donor who’s interested in a project– and who might be converted to a long-term donor to your organization– than to get a long-term donor to earmark dollars they might have given anyway to a specific project. Which brings us to
3. Incentivize the interaction. Nonprofits have a leg up in the crowdsourced funding game, in that they have a built-in base of supporters who care about their issues. But they’re also at a disadvantage, in that the payoff for the supporter is less clear– there’s no book or iPhone case waiting at the end of a successful project, and that kind of physical token of a supporters’ vote of confidence in an idea is an important incentive. LoudSauce has worked around this by including supporters’ social media avatars on the ads themselves, but why not take this a step further and produce a small-format poster of a crowdfunded ad that you can send to supporters, for example?
Ads are one of those communications vehicles that nonprofits often think they simply can’t afford. But what if I told you that there was a way of funding them that would bring in new funding for the ads themselves from new supporters who had never heard of your organization before? That’s the promise of crowdfunded ads for good causes, and one I think we’ll be hearing a lot more about in the coming months.