Cultural Enterprise Office

Crowdfunding is an alternative to traditional ways of financing your project or business. It uses the collective support of many to raise a large sum of money from lots of smaller investments, donations or advanced sales.

It allows people to invest or donate different amounts of money to help get your particular idea or project off the ground.

An outstanding campaign and active online networking are essential to raising money this way. Choosing the right crowdfunding platform is also key.

As the name suggests, you need a crowd to make this viable so it’s best suited to projects with some or all of the following:

• An engaging, clear message with wide appeal.
• An appealing profile to help potential donors visualise your plans. 
• A good network of peers to share the project initially.
• An established audience or fan-base – or capacity to build one.

People want to know what they’re investing in so provide clear objectives, tell them what their money does and how they or others will benefit. Also be clear about what you’re offering in return because you need to be able to deliver on this – your credibility is at stake.

Our Defining Your Work Worksheet can help you explain your campaign objectives and develop an enticing crowdfunding profile.

Things to consider

Before getting started, you also need to consider:

• The amount you want to raise and whether it’s achievable.
• Your timeframes for reaching your goal.
• What happens if you don’t raise the full amount of funding.
• How to engage with online communities about your story – social media, press etc.
• Which crowdfunding site to use and their policies

If you receive the funding from supporters, you’re entering into an agreement so are obligated to complete the project. However, their investments do not translate into equity or a piece of your project – so the copyright and IP remains with you. But if you’re looking for investors to take a share of your company or project, equity-based crowdfunding platforms also exist.

Not all ideas attract support. But even if you are not successful the first time, it’s still an opportunity to test your ideas, get feedback from a different audience and could influence how you develop the project and work in the future.

Finally...

Crowdfunding is about more than just money. It can provide validation, visibility, insight, innovation and many other hard to access advantages. A good crowdfunding campaign will pay attention to these opportunities, and aim to target as many of them as possible to get the most from the project.

Crowdfunding rarely provides the entire funding solution for any project, but it can help in the process of accessing other funds.

Crowdfunding is hard work and success rates are, on average, about 30% – meaning around 70% fail. The single biggest cause of failure in a crowdfunding campaign is lack of preparation and planning.

Other useful information

Get more details about crowdfunding:

• AN – How to get Crowdfunding by Emily Speed
• Arts Professional – The Future of Philanthropy by Patrick Hussey
• Creative Choices – 8 Steps for Crowdfunding
• CrowdingIn – Nesta crowdfunding platform search site
• TheCrowdfundingCentre – Guides to planning campaigns, research data and a platform selector
• Udemy - Crowdfunding to Win online course

Disclaimer: We want to keep you in the know, so we offer a wide selection of useful resources. But Cultural Enterprise Office isn’t responsible for the advice and information of external organisations in this document. So if you have any questions, please contact the specific organisation directly.