Is crowdfunding the new way for companies to make donations?
By now we should all know that crowdsourcing is a nifty way to raise money.
In 2004, the technique helped make Howard Dean a viable candidate for president, at least for a little while.
A year later, 21-year old student Alex Tew reminded us of how effective crowdfunding could be when he sold pixels on his home page for $1.00 a piece and raised over $1 million.
In 2007, in a first of its kind experiment, fans pooled $35.00 a piece and bought Ebbsfleet United, a football (soccer) team, albeit a struggling one, in southeast England for just under $1 million.
And more recently, encouraged by the willingness and desire of the community to donate small amounts of money, Kachingle has given us a new concept that hopes to support both online content creators and readers. Its simple model collects $5.00 a month from willing participants, then distributes that money across the web in support of the content most valued by the “crowd” of voluntary contributors.
But crowdfunding actually offers us a chance to do more than raise money. It can transform the way we make charitable donations, give us yet another way to involve and inspire our community, and perhaps most importantly increase awareness and garner attention for the causes we support.
Today, if your company is like most, you probably make at least some charitable donations every year. And, I’m willing to bet, you do it the old fashioned way. You write a check and maybe a press release. Perhaps you get your name listed in the back of a program under donors, or even on a plaque in the lobby.
Instead why not invite your community, customers and employees to join you? Preferably in public, over the web, via Twitter, or from your site. I’m not suggesting you do it to ease your financial sacrifice. In fact, you don’t even have to ask your community to contribute money themselves. Just give them an opportunity to participate, influence, vote or simply feel included.
Here are two examples. This year Grain Food Foundation (full disclosure, Mullen client) planned on donating money to Feeding America, a worthy cause if there was one. But rather than simply do it the tried and true way (write check; write press release) GFF gave customers a chance to join in the process. For every person who visited GFF’s online gallery and created her own original “bread art,” GFF made a contribution. Consumers felt as if they were supporting a cause, even without having to write a check themselves. They helped spread the word by posting their art to Facebook and Twitter. GFF got credit and attention for its effort. And Feeding America benefitted from the buzz.
For the last few weeks, Lands End has used crowdfunding to collect coats for the homeless. They’ve done it in a way that makes them look good and their customers feel good. Donate your old coat and Lands End will give you 20 percent off the price of a new coat. Chances are they were going to offer 20 percent off anyway. I mean what retailer is charging full price these days? But by getting you to take action, they generate awareness, gather a community and accomplish something meaningful.
Why not take a look at all of your planned actions — planned or otherwise — and ask how you might help the crowd help you?
These are just a couple of ways in which companies can enlist the community to help raise money or at least feel part of a company’s efforts. Got any others? Please share.
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[...] Pepsi invest in. Edward Boches of Mullen recently composed a post about how crowdfunding is a growing trend among B2C businesses including sporting retail giant Land’s End. Similarly, Pepsi appears experimenting the power of [...]
[...] Boches of Mullen recently composed a post about how crowdfunding is a growing trend among B2C businesses including sporting retail giant Land’s End. Similarly, Pepsi appears experimenting the power of [...]
[...] is it ok the way it is, and people are the problem? Edward Boches wrote about the potential of crowd funding, raising lots of money by asking large groups of people to donate small amounts. I think the [...]