CROWDFUNDRAISINGApril 29, 2014

Crowdfundraising

Introduction

Cindy Eller, Vice President for Development & Executive Director, Roswell Park Alliance Foundation

Karen Cincotti, Assistant Director Web & IT Operations, Roswell Park Alliance Foundation

Why Us?

Why Us? • NACCDO centers were approached over a year ago by

a cancer patient who wanted to give back• He created a cancer only focused crowdfunding site

called CureCancerStarter.org• Founding partners were:

– Roswell Park Cancer Institute– UNC Lineberger Comprehensive Cancer Center– Duke Cancer Institute– UW Carbone Cancer Center

Why Us?

• Site went live in October, 2013 with 5 campaigns• Brain Cancer Vaccines• Benefits of Fibrocytes in Cancer Car• Taking a Closer Look at Vitamin D• Treating Cervical Cancer Better Faster via UNC Malawi Initiative• Personalizing Treatment for Colorectal Cancers

• Only 1 campaign achieved their goal of $5,000

What Happened?

Why Us?

• There was no marketing plan to promote the site

• The centers were looking to the website staff to promote to get them new donors

• The centers were reluctant to promote to current donor base

• Hence no traffic

IF YOU BUILD IT

THEY WILL COME

Why Us?

• Decided we needed to develop a marketing plan and conduct more research on crowdfunding options.

• This is a part of our

FINDINGS…

Why?

Why Research?

Why Crowdfundraising?

Why?

The Numbers

• 2012 - The overall crowdfunding industry has raised $2.7 billion, across more than 1 million individual campaigns globally. More than ½ from sites based in North America.*

• 2013 – The industry is projected to grow to $5.1 billion.

• 2014 - Crowdfunding will top $10 billion.  

* Data form Crowdfunding Industry Report by Massolution

Why?

We cannot ignore this

growing trend and online

medium.

Benchmarking Results

NACCDO 2014 Benchmarking Survey• Which platforms are being used:

Benchmarking Results

NACCDO 2014 Benchmarking Survey• Types of crowdfunding programs:

Benchmarking Results

NACCDO 2014 Benchmarking Survey• Who manages your crowdfunding:

Benchmarking Results

NACCDO 2014 Benchmarking Survey• Number of crowdfunding campaigns completed:

Benchmarking Results

NACCDO 2014 Benchmarking Survey• Main audiences for your campaigns:

Benchmarking Results

NACCDO 2014 Benchmarking Survey• Money raised from crowdfunding in the last 12 months:

What is it?

What is Crowdfunding

First let’s define Crowdsourcing  

“Obtain (information or input into a particular task or project) by enlisting the services of a number of people, either paid or unpaid, typically via the Internet.”

 • Combination of the words 'crowd' and 'outsourcing’

• The idea is to take work and outsource it to a crowd of workers

What is Crowdfunding

Crowdsourcing  

• Famous Example: Wikipedia• Gave the crowd the ability to create the most comprehensive

encyclopedia in the world

• The underlying principle of crowdsourcing is that more heads are better than one

What is Crowdfunding

Definition of Crowdfunding  

“The practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the Internet.”

 

Crowdfunding is a type of Crowdsourcing.

Crowdfundraising is a variation of

crowdfunding to meet fundraising goals.

Crowdfunding & Nonprofits

Nonprofits have been crowdfunding for years 

• In 1949, Milton Berle hosted the very first telethon for the Damon Runyon Cancer Research Foundation

• A little over $100,000 was raised in 16 hours – one of the earliest example of public nonprofit crowdfunding

Crowdfunding is simply the act of accruing micro donations to reach a larger goal and now it is online and available to the masses.

 

Review of Commericial &

Non-Profit Crowdfunding Projects

Examples

Commercial Examples

Movies

Commercial Examples

Movies

Music

Amanda Palmer, Grand Theft Orchestra

Commercial Examples

Movies

Music

Electronics

TikTok + LunaTik simply transform the iPod Nano into the world's coolest multi- touch watches

Commercial Examples

Movies

Music

Electronics

Start Up Toy Company

(seed money)

Commercial Examples

Movies

Music

Electronics

Start Up Toy

Company

Or the “10 Year Hoodie” - raised over $1M so far

 

Non-Profit Examples

State of Minnesota - GiveMN • Raised $16.3 million in 1 day in November, 2012• Razoo.com

Non-Profit Examples

Tesla Science Museum • Raised $1.4 million• Indiegogo.com

Non-Profit Examples

DonorsChoose.org – • Since inception has raised $225 million and helped more

than 175,000 teachers fund over 400,000 projects

 

Non-Profit Examples

University College of San Francisco Medical Center

Challenge for the Children • Raised over $1 million• Causes.com

History

History of Crowdfunding

1997 – First instance of modern day Crowdfunding (British band funded their reunion tour)

2000 – ArtistShare – first dedicated platform

2005 – Kiva.org was the first microlending website, lending small amounts of money to entrepreneurs in poor, rural areas around the globe

History

History of Crowdfunding, cont’d.

2006 – Prosper.com - first peer-to-peer lending site

– Term “CrowdFunding” is first used

2008 – IndieGoGo.com launches - platform for films

2009 – Kickstarter.com launches as a new way to fund creativity

 

Growth

Growth of ALL Crowdfunding Platforms

2012 – 452

2014 – 800 and growing

Crowdsunite.com – “There are over  800 funding websites globally and every week new ones are created for specific demographic, region or category”

 

Growth

Growth of Crowdfunding

2011 – $1.5 Billion

2012 – $2.7 Billion

2013 – $5.1 Billion (projected)

2014 – $10 Billion (projected)

 

Growth

Number of US Donation Based Crowdfunding Platforms*

– 93 platforms available for donation based projects

–>> 54 platforms available for Non-Profit organizations

* As listed on Crowdsunite.com which reviews crowdfunding sites. The number continues to grow and you can see our choices are numerous.

 

Types

Types of Platforms

Types

Types of Platforms, cont’d.

Equity-based & lending-based (for financial return)

– Is most effective for digital goods (e.g., software, film and music)

– These categories, on average, raised the largest sum of money per campaign

 

Types

Types of Platforms, cont’d.

Donation-based & for cause based campaigns (for intrinsic reward)

– Perform best in reaching goals

– BUT the money raised in these categories are much smaller, with 2/3 of them generating less than $5,000

 

Donation Campaigns

Majority of donation based campaigns raised less than $5,000

Only 10% raised over $10K

Typically majority of money raised is within 1st or 2nd ask from fundraiser

* Data form Crowdfunding Industry Report by Massolution

How it Works

Parameters of a Successful Crowdfunding Campaign

1. Concrete Goals

2. Transparent

3. Rewards

4. Social

How it Works

Need to be Goal Orientated

– have tangible results for funds raised

– restricted vs. unrestricted funds

– focus should be on what the money raised can do, not just talk, but specific, if we raise $10K we will be able to:

- perform XYZ research,

- XXX number tests of on patients

- buy this equipment to complete research

How it Works

Have a Specific Fundraising Goal

– Have a specific goal for each campaign or project, whether it is $5K, $25K or $13,250 – you need to determine an amount that is your goal

– You can raise more but your stated goal should be reflective of the amount that is needed for the specific research or initiative

How it Works

Short, Specific Time Frame

– Crowdfunding projects have start and end dates

– 30 days, 70 days, 120 days

– There is a trade-off between giving your audience sufficient time to engage with the campaign and losing momentum because of a timeline that is overly long

– According to insights released by Indiegogo, the

optimal campaign length is 45 days

How it Works

Personal Involvement of Fundraiser (i.e. researcher)

– Gives donors the opportunity to meet (vicariously through the website) and see results from the researcher

– Provide content, i.e., videos, blog updates, so they become connected to the researcher

– Makes the donor feel involved in the process

How it Works

Importance of Researcher

– The researchers have to keep their donors up to date and give them progress reports (part of their rewards)

– Need to continue to show them how their funding has helped and contributed to the process

One of biggest keys to success is to engage the researcher/doctor/fundraiser in the campaign.

How it Works

Reward Donor

– Equity and lending sites specifically offer tangible rewards for their donors

– Donation based campaigns should also reward the donor by giving them the updates as described

– This is the intrinsic, emotional reward

How it Works

Reward Donor, cont’d.

– Some non-profits also provide tangible rewards

– actual goods - t-shirts, bags, gift cards, etc.

– access - hospital tours, event tickets, lunch with researchers

– special content (video updates, personalized letters)

– publicly giving credit

Remember to plan for what you can actually handle in terms of fulfillment before you promote the rewards.

How it Works

Social Involvement & Online Sharing

– Crowdfunding is an online initiative

– The campaign grows through your online donors

– Give donors the tools to tell people what they just donated to, we need them to PROMOTE for us

– And you need them to continue the conversation with their networks by giving them continued content to share

How it Works

Social Involvement & Online Sharing, cont’d.

– The content THEY post and share is most trusted

– YOU NEED TO HAVE THEM SHARE

How it Works

Review - Parameters of a Successful Crowdfunding Campaign

1. Concrete Goals – specific time frame and

fundraising goal

2. Transparent – where the money is going, keep up to

date on progress

3. Rewards – actual or intrinsic rewards

4. Social – need them to share online

Online Options

Constituent vs. Organizational Crowdfunding

Centers have the option of:

– sponsoring a campaign or

– letting their constituents do it for them

Online Options

Constituent Ex. – Miami’s Children Hospital

– Mike Fernandez– Personal fundraiser

where he walked across Europe to raise money for the hospital

– A crowd of friends and contacts raised over $1.4M

Online Options

Organizational Ex.– Univ. of California, Promise for Education

– Created a crowdfunding campaign to rally their networks for support

– Over $1.3M raised for undergraduate scholarships

Online Options

Constituent vs. Organizational

Online Options

With constituent crowdfunding

– We can leverage our already inspired supporters to fundraise for our mission through their own personal networks online

With organizational crowdfunding

– We can leverage our messaging, our content, and our research, to encourage existing and new constituents to help us raise money for a specific goal

Online Options

Company Branded vs. Commercial Platform

Centers also have the option of:

– having a Company Branded (white label or internal initiative) site

– or list their campaigns on a Commercial Platform

Online Options

Company branded (white label or internal initiative)

– A singular site for the organization’s initiatives– Completely branded by the Center with no platform

branding– Highlights Center projects only– Built internally OR using a provider’s white label option– If built internally no costs or fees are paid to a 3rd party– If built using a provider’s white label option additional

fees will apply

Online Options

Company branded example – Cornell University

Online Options

Company branded example – Children’s National Medical Center

Online Options

Commercial Platform

– Platforms where we can jump right in and start a campaign without any custom build

– Other centers and their constituents are also on these sites

– Some have large network of followers looking across the different causes

– Sites are templated with an easy to use CMS system– Costs and policies are dependent upon the platform

Online Options

Commercial Platform Example – Crowdrise

Online Options

Commercial Platform Example – Causes

Online Options

Commercial Platform Example – Indiegogo

Online Options

Commercial Platform Example – Consano

Online Options

Internal vs. Commercial

Evaluating Crowdfundraising for your Center

– What criteria should be used to evaluate if your center should participate in crowdfunding

- Why?- Where?- What platform?- What projects to fund?- What resources are needed?- What are the risks and rewards?

Evaluating Crowdfundraising

I. Why consider crowdfundraising?

It can be a key component in your digital strategy

Additional gifts from online donors Additional gifts from mail donors to online donors Part of a peer to peer fundraising strategy Part of an acquisition strategy for new donors

Evaluating Crowdfundraising

Evaluating Crowdfundraising

Value of online donors• Higher gift value

• More efficient renewal and communications cost

Evaluating Crowdfundraising

Evaluating Crowdfundraising

Acquisition:

According to our consultant Grizzard, the percent of revenue from new donors should be in the range of 20%

At Roswell Park it is 8.9% and our mail market is aged and shrinking

Crowdfundraising as a acquisition vehicle

• To secure new donors from patient and prospect lists; new out of market disease site interests

• New from cross pollination with others on the site

• Peer to peer fundraising vehicle for highly engaged donors and advocates

Evaluating Crowdfundraising

Evaluating Crowdfundraising

Ask yourself:• Do you have a plan to engage trending

online boomers and up and coming younger generations?

• Does your fundraising channel mix include mail and digital communications?

• Are you empowering your most enthusiastic supporters to fundraise and evangelize online on your behalf?

Multi Channel is the new norm

The ideal mix varies from generation to generation

Evaluating Crowdfundraising

Donors routinely respond to direct mail pieces by making an online donation

Online donors switch back and forth between internet and direct mail

ROI is not as straightforward

Evaluating Crowdfundraising

Evaluating Crowdfundraising

Evaluating Crowdfundraising

“Keep your eye on the bouncing ball”

• Boomers likely to be a dominant source of income at least next decade

• Need to optimize the mix for boomers while opening the door to younger donors

True or False: Digital is for young people and offline engagement is for old people.

The TRUTH is, ALL generations value a mix of online and offline.

Evaluating Crowdfundraising

According to the “next generation of American giving”

• The most promising future fundraising strategies include peer to peer fundraising and crowdfunding

Evaluating Crowdfundraising

Note: • There is little evidence that social media

is growing as a transaction channel

(not donating through social networks- i.e. Facebook)

• Growing evidence that social media is an important stewardship role

Evaluating Crowdfundraising

Evaluating Crowdfundraising

Evaluating Crowdfundraising

Evaluating Crowdfundraising

II. Decision to go for it!

First Step: Choosing a Platform

“Research indicates the choice of platform is the strongest factor influencing the potential success

of the program.”

Incorporating Crowdfundraising

Home grown alone? Home grown with similar entities?

(healthcare site?) Selection of a pre-existing commercial

entity (52 choices)

Incorporating Crowdfundraising

Online Options

III. Making it happen!

• Committing the necessary resources; creating the team

• Not something development can typically do alone- needs expertise from other specialties in house

Implementing Crowdfundraising

“The Team”• Web- online team• Finance/backend- gift processing• Creative- creating the videos• Researchers- engaged, entrusted,

committed (i.e. updates)• Marketing- driving the traffic

Implementing Crowdfundraising

“The Team” cont….

Communications Staff-

Supporting it with social media and other ways to keep awareness high of funds to date against target and create momentum; report back on success of project at completion of research effort

Implementing Crowdfundraising

IV. Deciding what projects to feature on your site?

• Can benefit from a small gift total• Can appeal to a specific disease group (i.e.

disease sites or genetics)

Building Your Crowdfundraising Campaign

Building your case

• Should be a 1-3 minutes long with a compelling video

• Concise and clear- who and why funds are needed

Building Your Crowdfundraising Campaign

Crowfunding Example - Multiple Sclerosis

Leukemia Crowdfunding

Setting Your Goal

• Make sure goal is realistic. • Should be able to raise 25-30% from within your

own network• Strangers will want to see traction to get excited

about your campaign• Generally don’t stop funding once a goal has

been reached

Setting Your Goal

• For larger projects consider multiple campaigns with smaller funding goals for each stage of the project

Crowdfunding Example degenerative diseases

Setting Your Goal

Length of Campaign

How long?

• Longer does not mean that you will raise more- the longer the campaign- the harder it is to build a sense of urgency and momentum

• ~ 40 day long campaigns are most successful• Successful campaigns generally raise 30% of

goal in the first two weeks, slows down in the middle – keep ,momentum going

Non Profit Perks

Examples:• Listing as supporter on website• Personalized, signed donor certificate or plaque• Annual updates about progress of project• Listed as a patron at lab location• Invitation to conference for scientists, patients and

donors where progress made will be presented

Non Profit Perks

Continue to add new perks during campaign:

20% of repeat contributors are for perks added after the campaign went live

V. The Cure Cancer Starter Model

https://www.curecancerstarter.org/

• How it came to be• List of participants:

UNC Lineberger Cancer Center (Chapel Hill, NC)

Roswell Park Cancer Institute (Buffalo, NY)

Duke Cancer Institute (Durham, NC)

UW Carbone Cancer Center (Madison, WI)

• Status- “suspended hold”

A Cancer Only Crowdfundraising Site?

Risks and Rewards

• Potential of diluting or losing donors to other centers• Opportunity to strengthen existing and acquire new• Strength in numbers driving interested cancer donors-

prospects• Clean and easy to access vs. being lost as one of

thousands on a commercial site

Cure Cancer Starter Platform?

Cure Cancer Starter Platform?

Next steps for a Cancer Cure Starter?

Circle back and evaluate with the funding group the required investment in an online marketing strategy

Reinforcing the need for “team” engagement not just development reps

Determine future directions of the site and partnership

Questions?

THANK YOU