Crowdfunding Advice From Xerocraft

Incentives from Xerocraft's Indigogo campaign

By Jeremy Briddle

The folks at Xerocraft Hackerspace completed a successful Kickstarter campaign in August of 2013, as well as an earlier campaign in May of 2013 with Indigogo, and Jeremy Briddle agreed to share what they learned with us here at the Café.

Give yourself lots of time to send rewards
Kickstarter funders are pretty used to waiting for their rewards. Estimate the amount of time you think you can deliver your rewards quickly but comfortably - and double it.

Don't expect anyone to help you fulfill rewards
The whole process from setting up your Kickstarter to running the fundraiser to sending out the rewards is a months-long endeavor. Make sure you surround yourself with a team of dedicated people you know will stick with you and help out until the fundraiser is complete and the last reward is shipped. If you don't think you have those people, rethink your campaign and consider making it less ambitious (e.g. smaller funding goal, fewer reward tiers, etc.).

Offer rewards you know YOU can make or acquire easily. Basically, plan for the worst and hope for the best. The worst that I plan for is that in the end the entire campaign will fall squarely on my shoulders to maintain and complete.

Make reward tiers as sparse as possible. It will make fulfilling and packing them easier. Don't worry if rewards don't quite equal the reward price in your mind. The funders don't care as much. They're more interested in funding a campaign they feel compassionate about than receiving a t-shirt.

Get the packaging and S&H costs nailed down
Underestimating the size and weight of packages can cost you a lot of money that was supposed to go toward your project. The price you think it will cost to ship what you think the package will look like and weigh and what you'll actually ship months later can vary widely.

Do your best to make a “test package”. A test package is a box that is just the size you need packed the way it should be to survive shipping (packing peanuts are the best) with the rewards inside. When you have the box set and ready for shipping, weigh it, measure the dimensions and write it all down somewhere safe.

Investigate your shipping options (e.g. USPS, FedEx, UPS) and figure out early who you will go with. USPS is typically cheapest. Take the test package to the post office teller and ask them for the price to ship it to the other end of the country (supply them with a zip code from that area; Google is your friend for that). This will give you a good idea of how much the shipping will dig into your funds.

Also keep in mind that you will need a lot of boxes this size so make sure you have a source. USPS has many boxes available for free. They also have more boxes of other dimensions than what's available at the local post office that they will ship to you for free or nearly free.

Keep in mind that USPS offers several different shipping services with their own boxes. If you pack all of your rewards into Express boxes but you're shipping via Priority, they will not ship them and you will have to repack everything or go with the other service.

BUT if the box is small enough, you can put it into one of USPS's large envelopes (also free) that does have the proper service labeled on the outside. This will save you the trouble of repacking.

Cutting USPS boxes to the size you need tends to freak out the post office employees, though it (apparently) isn't illegal or a barrier to them shipping the package (in my experience). However, using a USPS box to ship a package via another service (UPS, FedEx, etc.) is a federal crime.

Think hard about whether or not you will allow international shipping. Shipping internationally involves additional paperwork for customs, etc. And the cost is easily 3 times the cost of shipping nationally.

Host a wrapping party to get the rewards ready for shipping. Make it a fun party with movies, games, refreshments, etc.

Make a great fundraising video
For Xerocraft's video we really lucked out in getting it to look good. I was a film major in college, I have high-end video editing software on a decent computer, access to a digital camera that records 720p HD video, and access to a broadcast quality sound booth at my job to record the voiceover. Not everyone will be this lucky but do what you can. Talk to friends, look on Craigslist. Talk to IFASA (facebook.com/groups/ifasa) or Independent Film Arizona (facebook.com/indiefilmaz) about getting local filmmakers and freelance film crew to help you.

Write lots of updates. Record video updates on your smartphone!
Keep funders up to date on your campaign with blog-style updates. Do them as often as you can to remind people you're serious about your project.

Videos recorded on your phone are easy to upload. Don't worry about making it flashy and high quality like the fundraiser launch video. Videos get noticed. People will fund a campaign they fell passionate about. Generate that passion in your video updates.

Look at other, past campaigns
Old campaigns are still available to view on Kickstarter and Indiegogo. Look at ones that were similar to what you want to do and take the good ideas. Look at ones that were unsuccessful and try to avoid their mistakes.

Indiegogo offers “flex funding”
Flex funding means that if you don't hit your goal, you can still take most of the money you did raise. If you're worried about hitting your goal or this is your first time fundraising online, Indiegogo may be the right place to do a practice run. 

Wading Through the Crowdfunding Options

Written by Kassy Rodeheeaver and Lisa Bunker, Pima County Public Library

Crowdfunding has seen overwhelming successes in both the nonprofit and business realms. A recent IndieGoGo campaign raised over $1.3 million for a nonprofit to purchase land for the Tesla Museum  (http://www.indiegogo.com/teslamuseum), while Roberts Space Industries raised over $6.2 million (http://www.forbes.com/sites/erikkain/2012/11/19/star-citizen-smashes-previous-video-game-crowd-funding-records-raising-6-2-million/) through its Kickstarter campaign and the company’s website for the development of an online video game called Star Citizen. With these great successes, web developers the world over have jumped on the bandwagon to expand and build on crowd-funding models for clients. 

If you have done any research at all, you’ve probably found at least three or four contending platforms that you could use to host your own crowd-funder.  

Trying  to decide which model fits your funding needs best can be a nightmare, but we’ve come up with some criteria for you to consider while evaluating your choices. 

Eligibility

The first thing that you should check out when looking at a potential crowd-funding platform is if your project or organization is even eligible to use their services. This is especially true in the case of nonprofits. Some platforms require that you are recognized by the IRS as a 501(c)3 organization. Other sites may not be as stringent with that requirement, but if your donors are savvy about their charitable donations they may want the added benefit of being able to claim tax deductions by giving to only  organizations with IRS recognition. Some of these platforms will also automatically generate gift receipts that donors can print out for their records. Another thing to consider is that by working with a platform that requires nonprofit projects to have 501(c)3 status, you may be giving your project a little more credibility than if you were to host it on another platform that doesn’t have this requirement. 

If you are looking at crowdfunding from a business perspective, you may be limited in terms of the types of businesses allowed. For example, Small Knot requires that you be a small, local business to use its services.

Context

Another aspect that you should consider is whether or not your parameters fit neatly in the format of the platform. Some platforms require that you have a specific program or project, while others allow you to raise money for general support. Platforms may also have a theme for the projects that they host—whether it is art (http://www.unitedstatesartists.org/), social or economic projects (http://www.openideo.com/), or automotive projects (http://fundinggarage.com/). These are just a few of the more unique audiences that crowd-funding platforms reach. 

Crowd-funding platforms also vary in terms of their gravitas—some are more light-hearted or irreverent than others. Crowdrise features a picture of a napkin (http://www.crowdrise.com/about/napkin) that is on their website’s “About Us” header, which seems to speak volumes about how they present themselves and wish to be viewed by others. Environments like these may not always be appropriate for your project, but then again, perhaps they are the perfect match for your work.

Customer Support

How much support you need to get started on your first crowd-funding project may determine which platform is the best for you. Most of these services are very intuitively designed and easy to set up. However, if you encounter any unanticipated difficulties, having someone that you can actually talk to may make all difference. Visit their “Contact Us” or “Support” page to see what your options may be. Is someone always going to be available to assist you, or are they only available from 8-5 Eastern Time? Can you call, email, or chat with a live person, or are you forced to work out your problems from their FAQ or Help pages?

Commission

Many of the crowdfunding platforms are for-profit businesses, but there are costs associated with using even non-profit platforms. They need server space, bandwidth, and they need to pay their employees. Payment processing fees generally hover around 3% of the pledged or donated amount, but you will see a wide range of total fees across platforms to cover their overhead. Some of the platforms have clearly stated their commission rate, while others package processing and use fees together as one number. There are a few platforms that are completely free, but you should definitely look at the other criteria before deciding which one would be best for you. 

The goals you set and reach for your fundraiser may also impact the commission rates. Some platforms will still allow you to collect the money you raise, even if you do not reach your goal (known as “Keep it All”). However, these models often see much higher rates than other platforms that require you to reach your goal to receive any funding (known as “All or Nothing”).  

IndieGoGo, RocketHub, and MedStartr are all examples of platforms where this is true. Some platforms require that you identify which model you wish to use before the crowd-funding time period begins.

Adaptability

Not everyone’s crowdraising experience is going to be the same. You need to make sure that the platform you choose has all of the features that are important to you. For example, a tried and true method of getting more people to donate is to have a matching fund donor. If this is a component of your online fundraiser, make sure that you can highlight that in some way in your campaign. 

Another thing to consider is if the platform allows you to enter offline gifts as part of the funds towards the goal. This may or may not be important if you advertise to your donors and supporters ahead of time that they need to give through the crowd-funding platform to have their donation count, but there will most likely still be those who go to your website to make the donation. 

Public Side

One of the most important things to consider is what the public view of your crowd-raiser looks like. The design or layout of the page or pages will impact how many ways you have to engage your supporters. Photos, videos, and space for the written explanation of your project are all vitally important to a successful fundraiser. As anyone experienced with online fundraising would tell you, making it easy to donate is imperative. The donate button should be clearly visible, and the format of actually making the donation should be as seamless as possible. You may also want to look for a platform that recognizes your donors and their pledges on the page. 

You should also consider if you can post updates on the campaign progress and how that information may reach your donors. This is also a very social way of fundraising, so consider checking to see if your donors can interact with you by making comments about the fundraiser. 

It is also vitally important that some type of sharing mechanism is embedded in the design of your crowd-raiser so that your supporters can re-post the page through their preferred social media channels to help raise awareness and reach more people. 

Methods of Payment

Crowd-funding platforms usually use a third-party service to process payments. You may want to review their processing options to see what is available to you. If your project needs immediate funding, you don’t want to use a system that processes your payments on a monthly basis. The options will of course depend in part on the structure of the crowdfunding platform that you choose (“Keep it All” or “All or Nothing”), but this should be considered if you’re doing a longer campaign. You could find yourself locked into using a service without any other alternatives. 

Customizability

Branded donation pages raise more money (http://onlinegivingstudy.org/quarterlyindex) than non-branded pages. However, this may not matter as much if you’re looking at a crowd-raising schema where you’re trying to engage new donors who are unfamiliar with your website’s look. However, you should be able to find ways to link back to your website to easily give people a way to get more information about your organization should they desire it.

Donor Information

The last thing you may want to consider when choosing the right platform for your crowd-funder is how easy it is to collect donor information from the website. You’ll want to be able to easily download supporter information to your donor or client database so that you can continue to contact them with information about your work. 

Here is a quick chart for you to use to create a matrix of your top contenders to help you decide which one will work for you. We didn’t include eligibility, because if your organization doesn’t fit with the platform, there is no reason to compare it with other options!

CROWDFUNDING PLATFORM WORKSHEET

	Platform #1	Platform #2	Platform #3
Context: What other types of projects are on the platform? What is the tone?
Customer Support: How easy is it to get help? What methods do they offer (email, phone, chat, etc.)?
Commission: How much of your funding would they take?
Adaptability: Do they offer features that your crowd-raiser needs?
Public Side: How user friendly is the page? How can you tailor your message?
Methods of Payment: What payment processing system do they use? How long til you get the money?
Customizability: Can you brand the page with your organization’s look?
Donor Information: How easy is it to download supporter information?