Still sloughing off the effects of their 2008 banking meltdown, Iceland was in the news again recently when its government decided to amend their constitution by way of suggestions posted by citizens on Facebook, Twitter and YouTube. Otherwise known as crowdsourcing, the innovative step was initiated by the world’s oldest parliament, making the approach all the more intriguing. In fact, CNN host, Fareed Zakaria likes the idea so much he suggested the U.S. Constitution be revised similarly.
Crowdsourcing, a term coined by Jeff Howe in Wired Magazine in 2006, is defined as the outsourcing of tasks by way of a general call-out to a large, undefined group of people. There’s also crowdfunding, which relies on the power of crowds to fund projects. No matter its iteration, the idea of crowds and the power they potentially hold for nonprofits is gaining much attention these days.
But while leveraging technology and the power of the group seems a good idea on its surface, how effective are crowds in helping organizations reach fundraising goals?
Making the connection
When Oshawa-based Hearth Place, a cancer support centre, entered the Aviva Community Fund competition, their efforts would prove worthwhile. The Canadian contest, going into its third year, allows charities to post their project ideas on the Fund’s site, with the most popular ones winning money toward realizing their goals. “It was very gratifying for us,” says executive director, Andrea Shaw, of the experience. She relates how quickly the word spread about their work, ensuring votes were far-reaching and diverse. “It was really two people told two people who told two people.”
The contest was a validation of their hard work and a great promotional vehicle too. Providing voters with the opportunity to sift through all the projects listed on the site before voting is a great way to be introduced to the many organizations working hard at strengthening their communities, she adds, with one network building upon another. “So many more people now know who we are and what we do,” Shaw says. “When they come across someone diagnosed they say, ‘there’s an organization, give them a call’.” Thanks to the contest, the organization witnessed an increase in membership, volunteers and clients.
Reaching goals
Being titled an Aviva Community Fund winner wasn’t bad either, and it wouldn’t be the first time they’d be crowned. Hearth Place also won Pepsi Refresh, another similarly designed contest where people vote for their favourite projects and where the favour of the crowd is key.
The financial rewards were invaluable. The Aviva grant allowed them to pilot a support program for children with cancer, which would have been impossible to do otherwise. Pepsi Refresh’s funds allowed them to begin a couples therapy program, a project their members had been asking for.
But couldn’t the organization have piloted these projects some other way? Couldn’t they have used traditional means of fundraising and left technology and crowds out of it?
“It was not on the books,” replies Shaw, explaining how they already have more than enough programming to support and, as they’re not funded in any way, the winning ideas would have remained just that: ideas. She also says the contests were a lot less labour-intensive and time-consuming than their typical fundraising events to implement.
Crowded funds
Meanwhile, Canada welcomed its first crowdfunding site recently, with the introduction of Fundchange, a Telus-sponsored initiative. Expanding on an idea already taken root in the US, the site allows charities to post their project and the amount they’re looking to raise, using crowds and social media to help reach their goals. The idea is to find a way to engage with a younger generation of donors, says CEO Paul Dombowsky, and to make full use of online tools. Don’t forget crowds compound themselves, providing charities with a much broader audience than conventional fundraising efforts, he adds. “The goal is to have projects be funded more and more by people they don’t know directly.”
Fundchange’s inaugural pilot phase saw ten Ottawa-based charities take a stab at crowdfunding projects. LiveWorkPlay, focused on supporting people with intellectual disabilities, was one. They joined with the hope of raising $5,000 to support experiential travel experiences for their members, a project that ended up receiving the most votes. “A lot of our crowd doesn’t have big cash but there are some champions who could get us more supporters, and that has value,” says Keenan Wellar, explaining one benefit. Topping the voters list also gave them the advantage of being one of the first seen by site visitors. Their awarded funds were matched by Telus, another benefit of taking part.
The Ottawa Regional Cancer Foundation, another piloted charity, got their funds matched too. With a mission of increasing cancer survivorship in Eastern Ontario, they were looking to fund equipment for a fitness program for cancer survivors. The ability to reach a new demographic, a younger group of individuals who live and breathe social media, was one of the primary attractions of Fundchange for marketing vice-president, Shannon Bain. “We can engage them, get them talking about cancer awareness, prevention and also hopefully help fund programs.” Besides, being able to raise $5,000 in 30 days (Fundchange’s prescribed timeline), is a real boon considering how long the traditional fundraising route takes.
Bain, who hopes to post another project in the fall, is particularly pleased about the potential for information sharing. “The more people go to Fundchange, the more they’re going to look at your project and get interested in what you’re doing.” If they show interest, even without donating, they know it’s a good project. It’s also not an aggressive push. A simple request to your network gets politely passed onto another.
Fundchange does charge a $50.00 to post each project, plus a 3.1% credit card fee, but it’s lower than other crowdfunding sites, Dombowsky says. And with Fundchange you know exactly what it will cost you to raise a certain amount of funds. “We want there to be cost certainty,” states Dombowsky, explaining they’re also the better option compared to Twitter, which involves huge numbers of transactions at a low dollar value, anonymity and multiple players.
Some wrinkles
Wellar is thinking about another attempt at crowdfunding with Fundchange, but is hoping some issues will be smoothed out first. For one thing, winning the popularity contest wasn’t tied with any other benefit. “We’d be very interested with some kind of voting incentive,” he explains. Also, as a new company, Fundchange hadn’t yet established its own crowd, with the result that each organization had to depend on their own. The hope is for Fundchange to increase their own base for a bigger impact overall.
They’re working on it, says Dombowsky, who is quick to point out Telus has over a million Twitter followers. In fact, Telus is proving itself a very committed partner, undertaking a matching initiative every quarter. The Summer Matching Program, for example, part of Fundchange’s new Facebook integration, will allow newly funded projects that receive the most Facebook “likes” on Fundchange’s site, to receive up to $5,000 in matching funds.
Dombowsky admits to being surprised that charities were a lot less advanced in social media than he initially anticipated, adding they’re doing what they can to help, including providing workshops on social media and crowdfunding. It’s one of the reasons Fundchange, like their colleagues in the US, is struggling to meet their initial projections. Charities need a designated community coordinator, someone who knows the ins and outs of social media and understands its potential. And you really have to put the effort into building your crowd, he states. A new visitor to your site may not donate today but if you keep them in your sphere, they may be motivated to do so in the future.
Charities also need to get beyond the trust issue. Though fundraisers are traditionally guarded with their donor list, “The reality is you can’t really do that anymore,” he says. You have to realize that opening up your donor base to other charities doesn’t mean you’re losing donors; you’re simply gaining others you may never have met. “It’s focused now on the idea of creating a story that you get out to as many people as you can,” says Dombowsky. “If it resonates, that’s great.”
No panacea
Of course, even if it does resonate, working with crowds is no panacea. The Gap had to pull its new crowdsourced logo due to a barrage of complaints (apparently, using a broad crowd with no design acumen to choose your new logo is a no-no). And crowdsourcing doesn’t come without its politics either. When a lot of money is at play, there’s always the chance for unscrupulous, manipulative behaviour. Pepsi Refresh, for example, faced controversy when one charity allegedly used a third-party voting service in India to generate votes in exchange for payment or a share of the winnings.
Even Shaw noticed some politics during her crowd foray. Regardless, she is looking forward to her next one. “I love the concept, to be involved and part of the solution in your community,” she explains. That the contests allow so many projects to be highlighted is its greatest strength. “We’re all in this experience together and it’s important that we keep our community strong, interested and invested.”
Tips for Successful Crowdsourcing:
- Ensure you have the adequate resources to effectively carry out a crowd-based project.
- Make sure someone on staff has social media skills, or get help.
- Ensure the initiative you take on effectively ties into your mission and fundraising goals.
- Pitch your project in a very focused way. Don’t tell your organization’s whole life-story.
- Don’t just depend on the “crowdfunder” to promote your campaign. Use all the social media channels at your disposal, and offline methods too, to reinforce calls for participation.
- Play nice. Don’t forget your every move is under scrutiny. Don’t give prospective donors a reason not to give by trying to win votes underhandedly.
- Ensure your entire team is on board and eager to participate. Crowdsourcing/funding involves a learning curve and a new way of thinking. You can’t succeed without the full support from the board, fundraising and marketing teams, admin support and volunteers.
Elisa Birnbaum is a freelance journalist, producer and communications consultant living in Toronto. She is also president of Elle Communications and can be reached at: info@ellecommunications.ca.
