Using Crowdfunding To Support Your Work
How we think about and use crowdfunding at MVC, and what social justice/feminist/community platforms can learn from us.
In the last post in this series, Funding Model View Culture, I covered some of the fundamental principles and philosophies of how we approach raising money here at MVC. We talked about developing a blended funding model, “productizing” your organization, developing options for people at different income levels, and balancing open vs paid content. You can read that post here for an intro, and in this post we’ll go more in depth on how we think about and use crowdfunding at MVC, and what social justice/feminist/community platforms can learn from us about this funding strategy.
USE CROWDFUNDING AS A LITMUS TEST
Crowdfunding was one of the first ways I knew that Model View Culture would be a financially viable platform. For a few years prior to founding MVC, I was doing a lot of essay writing and activism on tech and culture – work I was doing in my spare time, outside of my full-time tech job. Like many other diversity in tech activists at the time, I started using an early crowdfunding site that allowed people to pay me a small amount each week for this work. I put a simple link at the end of each of my posts, and as the amount I was receiving each week grew into the hundreds of dollars, I realized that there was demand for this content… and a paying audience for it.
I highly recommend crowdfunding as a good test to see if you’ll be able to build up the financial support to take something from a hobby or side project to a more full-blown effort, organization or full-time job. It’ll let you test the waters on messaging, connecting with your audience, and what people want to see from your work. It’s a low-friction, low-risk way to see if there’s really something there.
So, if you’re thinking about building a media company, publication or book, first figure out if people are willing to fund a few blog posts. Think of it this way: if you can’t consistently produce blog posts for a few months to a small paying audience, you’re unlikely to be able to deliver a larger media platform to a much bigger audience. If you want to start a big conference, first figure out if people will support a small meetup, etc. etc. etc. This might also save you a lot of grief in over-committing to something you actually don’t have the time, mental health, passion, support, etc. for.
FIND A NATURAL FIT
One major key to crowdfunding is aligning what you are getting paid for with the work you’re going to be doing. I think a big mistake a lot of people make in crowdfunding is “rewarding” contributors with “perks” that are often outside of the core of what they are producing. Yes, we could spend a lot of time and money designing, promoting and shipping stickers or T-shirts, or other “perks” that are outside of our core model. But at the end of the day, we aren’t a sticker company, or T-shirt company. And working on that would take time, money and effort away from our core model and goals.
When crowdfunding flows naturally from your core work, it will be well-aligned with your goals and with the value your audience gets from your work. If you’re producing articles, that’s what your crowdfunding should be primarily oriented around – same if you’re making any other kind of product, event or achievement. Especially if you’re small and resource-constrained, crowdfunding shouldn’t DISTRACT from your focus, or require building out entirely new competencies (like designing and shipping swag) on your part.
Fireside Fiction has a great note on this in their recent blog post on funding:
“Why not do another Kickstarter? Kickstarters take an enormous amount of time and energy to set up, run, and then fulfill the myriad rewards for. We’ve done this five times, and it is exhausting. This is time and effort we want to put into Fireside, and it is money we’d rather be paying writers.”
Ultimately, people want to pay you for the core work you do – and while offering fancy perks might lead to temporary increases in the amount of money you get, that time and effort is best spent on building a better product, community and offering… and that will pay out more in the long run than tangential gimmicks.
So, at MVC we keep it super simple: we get crowdfunded, per-issue support for our online issues, and supporters pay us each time an issue comes out. This keeps us focused on producing amazing content for our community, not managing and promoting an elaborate multi-pronged system of perks, stretch goals and swag.
MATCH THE TOOL WITH THE RHYTHM
There are tons of different crowdfunding tools these days. There’s platforms like Kickstarter and IndieGoGo that are often used for raising money up-front, pre-launch, to produce a product or platform. There’s platforms like Patreon that are more fit for getting ongoing and recurring support from your audience, in exchange for regular “creations” from you – whether that’s a new song, video, issue, article, event, whatever. And then there’s slightly lower-level models, like using something like PayPal or Moonclerk to have people contribute directly on a one-time or recurring basis.
The key is figuring out which model works best for you. If you’re consistently producing content, new things, and new achievements, Patreon or similar services/models is a good fit. At MVC, we use Patreon to collect small amounts of money from almost 200 readers for each new issue. Each person gives us anywhere from less than a dollar per issue, to some users that will give us tens of dollars or even larger amounts. We produce a new online about every three weeks. If we’re a week late or something, it’s fine because Patreon only charges users when we release something new.
While more and more groups are using a big up-front, pre-launch funding strategy – like raising a lot of money on Kickstarter and IndieGoGo – I would caution against them in many situations. I think it puts a huge burden on founders to invest a lot of time and money in fulfilling perks that are orthogonal to the endeavor’s main production goals. It also often involves promising things – like timelines for delivering a product – and relies on factors – like production costs – that are really hard to guarantee in the early days. The structure of raising a bunch of money up front puts a lot of pressure to go from 0 to 60 immediately, which I think is hard to manage for people starting out something new, and people trying to do a lot of work under serious resource constraints. You end up over-promising, under-delivering, and running into tons of unexpected expenses and time-consuming speedbumps.
Also: if you’re trying to crowdfund for something pre-launch, you’re often asking people to give you money despite having never seen any of your work! In a resource-constrained space, and with the higher expectations people place on “social justice” platforms vs more consumer products, this can be an uphill battle. Even if you have a good reputation in the community, it’s often not as persuasive as a more substantial showing of what you can do.
When MVC launched, it was with a full online issue, so people could see and experience the platform, our vision, our editorial perspective and our ethics up front. Crowdfunding was something we added several months later when we had a consistent publishing schedule, had built up more of an audience, and knew more about our operating costs and where we wanted crowdfunding to fit into our overall financial picture. I think we were able to raise more money off the bat by going with that, than we would have trying to raise money through crowdfunding weeks or months before the launch — even though my work in this space was already highly visible.
One other note about tools: stay creative about ways to use crowdfunding, and how you might use tools that aren’t typically thought of as “crowdfunding” – for example, I’ve seen groups like Hands Up United really effectively use their Amazon Wishlist to support their community efforts to get books for their Books and Breakfast program.
BE PREPARED FOR FLUCTUATING SUPPORT
A big take-away from my years using different crowdfunding models is that the level of support you have can really, really fluctuate over time, from week to week or month to month. There are times when you’ll do something really visible and get a big influx of financial support, and there’s times – especially in a social justice context – when some parts of your audience will disagree with choices you’ve made and withdraw their support. Sometimes people will fund at really high levels for a few months and then stop, which can cause your numbers to fluctuate quite a bit. And the three big rules of crowdfunding: credit cards fail, people lose jobs, and you’ll fork over a big chunk of cash to service and processing fees. (Patreon takes 5%(!!!) of your earnings on the platform, and that doesn’t even include credit card processing fees and bank transfer fees).
So, my advice: figure out how much you want to get out of crowdfunding to support your core business, and then try to get to 20-30% more than that to cover all the costs and fluctuations. Never rely on getting 100% of the money that your crowdfunding services “projects” – it’s almost always off by 10% or more. And, have a buffer to support things like payments being processed late, disruptions to service providers, or major unexpected drops in funding (can happen around holidays, controversies, etc.)
THE KEYS TO PROMOTION
Photo CC-BY Upupa4me, filtered.
The best time to promote your crowdfunding effort is immediately after you’ve produced something that has connected, influenced and inspired your audience. For example – put something at the end of a post that says “Liked this article? Please support us by giving a small amount on Patreon.” (Just don’t do it in an annoying way, like a pop-up or box that follows you around the page.) Right after someone’s consumed your content or had a positive experience with your product or company is a great time to harness that energy into a small commitment to support your work on an ongoing basis.
Another good time to promote crowdfunding is when you’re trying to meet a new goal. Setting goals is a really great thing to do even for ongoing crowdfunding efforts, because it tends to make people feel part of something larger, and gives them a concrete sense of the impact they’re having. A goal could be the # of funders you want to reach, the amount of money you want to make, or something you can fund with the gains.
Of course, promote your crowdfunding campaign on your social media accounts, email list, etc. on an ongoing basis. You will definitely see that impact on your funding: frankly, we really slacked off on promoting our Patreon at the end of last year because we were so busy with other projects! And we saw the effect in our bottom line. Be rigorous and disciplined about promoting your stuff.
Regardless of if someone is giving you a one-time payment through PayPal or giving you a few dollars a month through something like Patreon, it’s important to remember that your crowdfunders are a very important audience to build an ongoing relationship with. This is an audience that is likely to keep paying you or pay you again, and will often step up their level of contribution over time.
Your relationship with supporters really is a feedback loop. Even after you’ve gotten the money or secured that initial commitment for a recurring donation, you should put in effort to keep donors updated and demonstrate how their contribution is helping, how your organization is making an impact, and where you want to go next to motivate more financial support.
One thing to keep in mind if you’re using a crowdfunding platform is to pay attention to how much control you have over your ability to communicate with your audience. If your crowdfunding platform shut down tomorrow, would you be able to still reach your users? Is your crowdfunding platform the ONLY line of communication you have to your funders? Of course, these are problems generic to most means and methods of transacting with your customers and audience, and provides yet another good argument for using a blended funding model – however, because many crowdfunding platforms don’t provide you with direct patron contact information, because crowdfunding tools are still an early market and thus prone to anything from technical glitches to shutting down entirely, and because there is still a dearth of open alternatives, it’s particularly important to approach these strategies with some strategy and skepticism.
THINKING ABOUT CROWDFUNDING MORE HOLISTICALLY
Crowdfunding — getting direct financial support from your audience — doesn’t have to be just about Patreon and Kickstarter pages. Inspired by Give Your Money to Women, I’ve been thinking about how “crowdfunding” can work as more than a financial platform for the organization – it’s also a way that I get compensation, support and appreciation for my personal work on MVC and in the community. I take a much lower salary now than I did working a tech job, and I also receive a sometimes extraordinary amount of never-abating online harassment. So, posting my Amazon wishlist online has been such a positive experience for me: I get Starbucks gift cards, makeup here and there, blankets and stuffed animals, aromatherapy and other products that help meet my self-care needs and make me feel good.
I really, really appreciate this type of support – it helps me feel better about the sacrifices I’ve made to do my work, and the emotional toll it has. It motivates me to keep going. So, when you look at your organization and the role of crowdfunding, don’t just think about paying for your accountant, your office supplies, your payroll – also consider the role it might play in personally supporting you and members of your team.
While increasingly popular for small initiatives/projects, particularly social justice work, crowdfunding is not a panacea, and can be more variable, less predictable and more susceptible to the winds of public opinion than other strategies. That means the level of funding you get can vary dramatically even over the course of a few weeks. It also tends to leave you locked into certain platforms with varying levels of reliability and maturity at this particular stage in the market. Further, many crowdfunding platforms put too much emphasis on creating elaborate perks structures, which can – if not employed judiciously – be distracting and thwart your progress on your core goals.
Still, at MVC, crowdfunding is one important revenue stream that subsidizes a lot of our ongoing operational costs: editor’s salary, author payments, fees for online services like our storefront and our mailing service, and much more. It’s also a way we build a deeper relationship with many of our readers, and give people at a variety of levels of financial privilege a platform to contribute to our financial viability.
Stay tuned for an in-depth article on another one of our revenue streams: Sponsorship! And oh yeah, if you got value from this article, consider supporting us on Patreon 🙂.