Crowdfunding can be used to finance a variety of purposes, from the small-scale support needed for specific projects or initiatives to larger start-up capital for small and medium-sized enterprise. It can tap into your organization’s existing fan base and it can help you to access investors who are interested in your idea.
Crowdfunding is a 21st-century approach to community economic development. That brings together and connects a community’s assets to meet market demand in ways that build livelihoods that last, and how your organization can use crowdfunding to finance projects and initiatives. We will also explore equity crowdfunding at the local level and the implications these models have on Louisville’s social economy.
How Crowdfunding Differs From Other Fundraising
Crowdfunding is fundamentally different from other methods of fundraising in that the campaigner has a direct requirement to create specific value for the contributors to the campaign. With a regular request for donation the value that is created may be intangible, whereas with crowdfunding there is a much more direct exchange of value. For example, most crowdfunding campaigns will create rewards that are either actual tangible products, offer specific recognition via social media, give access to a service or event, or even offer a unique experience. The important aspect is that rewards must offer value to the campaign contributors.
SMART Goals and Crowdfunding
Crowdfunding efforts will generally fall under the ‘SMART’ criteria, offering projects that are specific, measurable, attainable, relevant and time-bound. Those that are contributing have a reasonable assurance that their dollars are being directed and applied immediately to the campaign goals, as described in the campaign’s video. This focused application of funds is quite a departure from the generally more open-ended campaigns of many non-profits, where funds are requested in support of a general mission.