Wow, I just finished reading Craig Mod‘s fascinating post on using Kickstarter to raise funds to reprint his book. Everyone who works in fundraising should check it out.
I’d like to add a few points about why this and other Kickstarter projects are such good fundraising opportunities and how these successes look next to classic nonprofit fundraising techniques.
Kickstarter makes giving personal
Craig doesn’t say this in his blog entry, but there can be no doubt that a large part of the success of the project stems from the credibility he and his collaborator Ashley Rawlings have. If you know their work you know they’re not going to drop the ball on this project.
So people funding the Kickstarter project are motivated by more than seeing a book re-released. They want to fund Craig’s and Ashley’s re-release of a book. And many, I suspect, just want to fund Craig and Ashley doing good work of any sort. Who wouldn’t want to bet on a winner?
This personal dimension of fundraising may be the most important factor in the selection of deserving projects. It becomes more complicated as projects and organizations scale up, but it worked elegantly in this project.
People love restricted giving
In fundraising parlance the restricted/nonrestricted gift distinction corresponds to whether gift is for a special project or whether it can be used for whatever project or program the recipient sees fit. For better or worse, all else being equal, people prefer to give restricted gifts for projects. Doing so gives them a more concrete sense that their dollars are going directly to fund what they want to see happen.
Unsurprisingly, nonprofits really like unrestricted gifts. It would be hard to pay for an organization that did more that a couple of things using restricted dollars exclusively. And nonprofits that provide an ongoing service are engaged in a process rather than a project. For these groups it’s reasonable to say, “We do x, y, and z. You know that someone needs to do these things, so give us money that we can use at our discretion to keep these processes running.”
It’s exciting to be involved in a special project with a concrete outcome. So I’d predict that the Pre/Post will have an easier time raising restricted funds for specific projects than unrestricted funds for the more general pursuit of quality publishing.
Kickstarter demands honesty from solicitors
If a Kickstarter project does not secure pledges equal to or greater than the target amount, then no donor pays.
This gives the seeker of funds an incentive to set her target honestly. If it really costs you $1000 to do a project, but you think you can raise $3000, so you set your target to $2000, and you raise $1900, then you receive $0. There you were, on track to receive double the cost of your project, and now you have nothing.
On the flip side, you’d be nuts to set your target to lower than the anticipated actual cost of the project. You’d be lying to your friends, and if the campaign was a success you’d have to figure out how to make up the difference.
Craig’s campaign revenues exceeded his target, and he suggests that a takeaway from this experience is that one shouldn’t be shy about setting one’s target high. I’d say to set it at the high end of your range of likely costs. Go higher and risk losing everything. You can always start a new project if the goodwill you discover in your fundraising exceeds what you’d expected.
In nonprofit capital campaigns, fundraisers go to great lengths to set accurate targets for timing and funds raised before they go public about their initiative. One reason is that they begin collecting cash from donors before the end of the campaign, unlike what you have in Kickstarter, and it’d be painful and embarrassing to have to return money.
Doing so would show that you weren’t competent enough to research your campaign adequately before beginning. On the other hand, a Kickstarter campaign goes public before anyone puts up any money. So perhaps the more money you want to raise, the more certainty you need before you go public, the less likely that Kickstarter would be a suitable platform.
There’s lots of great “Ask” data in Kickstarter
Asking for the right amount of money and setting the right giving tiers is a big deal in fundraising, and I’ve spent quite a lot of time designing tiers for different organizations and creating models to assign gift-maximizing “Ask” amounts to donors in light of their donation history (and myriad other factors).
Kickstarter projects provide a great resource to show where people tend to end up along an ordinal spectrum of ask amounts. They’re worth researching and pondering, no matter what sort of fundraising you’re doing.
Final thoughts
Craig Mod’s project is really cool and illustrates a style of giving that lots of people find attractive. I don’t see a Kickstarter model supplanting most classic forms of fundraising yet, but you’d be nuts not to experiment with it.
The data that best shows what people want to support would be a record of what they actually support, and experimental fundraising projects on Kickstarter are a great way to create that data.