Crowdfunding is about more than just money—it’s about community.
Crowdfunding is a great way for people to come together to support one another and put money towards a cause that matters to them.
We’re back with another explainer on popular online platforms. This time, we’re looking at platforms for monetization and crowdfunding. Whether you’re running a crowdfunding campaign to launch a product, or running a Patreon to receive financial support from your audience, the important thing to remember is that these platforms are as much about community building as they are about raising money. People can access so much content for free, so they’re only going to pay for things that have real value to them.
Back in 2014, we were part of the team behind the Kickstarter campaign for Corner Gas: The Movie, which surpassed its $100,000 goal in just one day. The original Corner Gas TV series had a loyal fan base but the series predated social media. We needed to activate the fans on social media and knew that they would get behind seeing their favourite characters on the big screen. And they came through! The campaign was an overwhelming success, reaching over 285% of its original goal. Once achieved, our focus shifted to keep the audience engaged through nine months of production to the theatrical release and the much-anticipated CTV broadcast.
In this blog, we’ll look at how crowdfunding works, and what it can do for creators and their communities.
Most successful crowdfunding campaigns rely on the support of an existing community and rewards that community for their support and enthusiasm. Running these campaigns requires strategy, time, money, and lots of planning to ensure that the campaign benefits both the organizer and its backers.
What do creators get out of it?
Many people producing content on the internet don’t get compensated for their work, especially not in proportion to how much they make for the platforms that host them. Crowdsourcing a salary from viewers using Patreon or Ko-Fi can help creators to focus on their content—if they make enough to not need a regular job. Not having to rely on restrictive monetization requirements like those on YouTube can also give creators more freedom in their work.
Crowdfunding also connects creators more directly with their audiences. Fans can formalize their support by paying them for their work or contributing to the financing for a larger project. Crowdfunding apps also generally provide comment threads where the organizer/creator can interact with their contributors.
While having an existing community reduces the amount of work needed to get the word out about a campaign, it also means expectations are higher for the project, because it’s partly a reward for your most dedicated fans. The tier systems in Patreon and Kickstarter really highlight this, as creators can set levels of rewards or perks based on the amount fans pay.
Rewards might be merchandise, a look behind the scenes or other exclusive content that regular fans would never get to see. These incentives further cement the relationship between the creator and their audience.
Now that we know what crowdfunding is and how it works, let’s look at the similarities and differences between the big platforms:
Kickstarter is one of the most well-known crowdfunding platforms, financing projects like Corner Gas: The Movie as well as the Veronica Mars film reboot. People who back projects can get additional rewards based on their level of support if the campaign is successful. Kickstarter is notable for its “all or nothing” funding structure, which means that if a project doesn’t reach its funding goal, the owner of the campaign doesn’t receive any of the money, and backers are not charged for their pledge.
Indiegogo is similar to Kickstarter in that it’s used to crowdfund larger projects, but is more flexible with a longer campaign period (120 days as opposed to Kickstarter’s 90) and the option to choose between the “all or nothing” structure or flexible funding. Flexible funding means owners of a campaign receive all money pledged, even if they don’t reach their target. However, this also means that they are required to provide the promised rewards to backers, even if they fall far below their funding goal.
Patreon is structured similarly to Indiegogo and Kickstarter, with tiers of rewards based on the amount backers pay. However, Patreon is a platform for supporting creators on an ongoing basis, rather than backing a one-time project. Patreon functions as a subscription, with backers paying their favourite creators monthly for extra content. This is a great way for creators to see compensation for their work, and to better connect them with their most dedicated fans.
Ko-Fi (sounds like ‘coffee’) and Buy Me A Coffee are also used to support individual creators but are more focused on one-time donations, like a virtual tip jar. There are subscription options, but as their names suggest, the main purpose of these platforms is to metaphorically “buy a creator a coffee” to thank them for their work.
GoFundMe is another platform to crowdfund money for individuals, but it’s more commonly used for charitable campaigns, or to help an individual in need. Unlike the other platforms in this list, contributing to a GoFundMe doesn’t reward backers, given the charitable nature of these campaigns.
We’ve also put all this into a handy chart so you can see the similarities and differences at a glance.