SETTING REALISTIC CROWDFUNDING GOALS
Can I raise all my project's needed money through crowdfunding?
Obviously the old saw about putting all your eggs in one basket applies. If you're looking to raise every last dollar through crowdfunding and crowdfunding alone, we encourage you to broaden your strategy. Crowdfunding can be an effective and successful way of raising money for your project, but unless you have a deep donor list to turn to and a team of dedicated fundraisers ready to work to make that goal happen, we often find that setting reasonable goals leads to a higher success rate.
What do we mean by reasonable goals?
Well, let's say you wanted to raise $5,000.
Now, the average gift Oberlin's crowdfunding has received so far is $71, but averages are misleading. If Bill Gates and I sit at a bar together, the average person's net worth is $40 billion. More important to consider is the mode gift. That is the dollar amount the majority of gifts have been made in so far.
At this point, the mode gift on our crowdfunding platform is $25.
For general fundraising messages from Oberlin College, we tend to see a 20% open rate and a 5% gift rate. Depending on your audience, you may see a higher gift rate than that, but we'll use those figures to illustrate what we mean.
To raise $5,000 through $25 gifts, you will need 200 donors to your project. To reach 200 donors with a typical 5% giving rate, you will need 4,000 people you can solicit.
If you do not have 4,000 email addresses and contacts to send out your fundraising appeal, reaching your $5,000 goal will prove challenging to say the least.
What should we do?
For starters, consider how many direct contacts you have. Not "how many people will my shared post on Facebook reach," but how many actual, valid email addresses you plan to write to with your crowdfunding appeal.
Then do the calculation:
Total Contacts x .05 = Likely Donors
Follow up with a second calculation:
Likely Donors x $25 = Potential Money Raised
Next ask yourself a couple questions:
1. Do we know of any donors we can definitely count on for gifts larger than $25?
2. Who are they?
3. Can you get them to commit to making that gift? If so, add that dollar amount to your Potential. (If you have several of these, be sure to subtract $25 for each of them for a more accurate figure.)
Once you've completed these calculations, the Potential Money Raised + Big Gift Commitments = Your Crowdfunding Target.
This amount is smaller than what we hoped to raise.
That's not a bad thing!
In fact, it's always better to set a lower dollar figure as your target than what you hope to raise. Reaching your reasonably calculated target is far more satisfying for your project and its participants than falling considerably short by setting unrealistic expectations.
Keep in mind, too, that crowdfunding is just one way of raising money and cannot be seen as a cure-all to your every need. That's why we recommend setting goals that are obtainable. Crowdfunding, when partnered with events, with dollar matches from your larger donors, and with other types of fundraising, can be an effective way of reaching a wider audience and meeting your needs.