Crowdfunding has become a hot topic for many development professionals in the United States, accounting for $2.7 billion dollars raised in 2012. Estimates for 2013 were even higher.
It appeals to many fundraisers because it leverages the social networks of donors to generate funding for projects and organizations. With the proliferation of crowdfunding sites and the recent success of campaigns on platforms like KickStarter and IndieGoGo, development programs in higher education are beginning to take notice.
Questions persist about how the platform translates to fundraising in higher education and if it has the potential to become a sustainable addition to the tool kit of annual giving programs.
Explore beautiful and ugly buildings. Mathematics helps us create beautiful d...
Using Crowdfunding in Higher Education
1. Using Crowdfunding in Higher
Education
What is crowdfunding and can it be
used effectively in higher education?
Dayna L. Boyles-Carpenter
2. Project Abstract
Crowdfunding has become a hot topic for many development
professionals in the United States, accounting for $2.7 billion
dollars raised in 2012. Estimates for 2013 were even higher.
It appeals to many fundraisers because it leverages the social
networks of donors to generate funding for projects and
organizations. With the proliferation of crowdfunding sites and the
recent success of campaigns on platforms like KickStarter and
IndieGoGo, development programs in higher education are
beginning to take notice.
Questions persist about how the platform translates to fundraising
in higher education and if it has the potential to become a
sustainable addition to the tool kit of annual giving programs.
3. Project Introduction
How can crowdfunding be used by higher education
institutions?
Understanding crowdfunding principles and
practices
Applications to donor renewal and retention
Cannibalization of unrestricted annual giving
programs
4. Project Context and Relevancy
UMBC launched its crowdfunding program in June of
2013.
Development professionals in higher education are
starting to experiment with the crowdfunding model,
but its use in higher education is so new that not a lot
of research exists.
This research will serve as a resource for
development professionals in higher education prior
to their launch of a crowdfunding project.
5. What is crowdfunding?
crowd·fund·ing
ˈ
kroudˈfəndiNG
/
noun
1.
the practice of funding a project or venture by
raising
many small amounts of money from a
large number of people, typically via the Internet.
"musicians, filmmakers, and artists have
successfully raised funds and fostered awareness
through crowdfunding"
(Oxford Dictionaries, 2014)
6. History of Crowdfunding
Originated from crowdsourcing
First platform launched in 2001
Musicians and artists
Grassroots political fundraising
• 2008 Obama Campaign
• Blue State Digital
• Raised $272 million from over 2
million, mostly small, donors
(Gerber, Hoi, and Kuo, 2013, p. 2., Howe, 2009,
and Parry, 2009).
7. Crowdfunding is Growing Fast
$5.1
Billion
2013
$2.7
Billion
2012
$1.5
Billion
2011
(Gerber, Hui, and Kuo, 2012, Jarrell, 2013,
Danmayr, 2014, and Hanselman, 2014)
9. Two Types of Funding Models
Threshold Model
• Funds held in escrow account until the goal is reached.
• If goal not reached, contribution is refunded to donor.
All-or-Nothing Model
• Project owner keeps all funds
raised, regardless of whether or
not the project goal is reached.
(Valanciene and Jegeleviciute, 2013, p. 41)
10. Motivations of Crowdfunding
Donors
Digital Natives vs. Digital Immigrants
Want to believe that their contributions matter
Feedback loops
Goals
Challenged
Specific
Attributed to an individual vs. group
Reciprocal relationships
Rewards/Perks
Wash’s Completion Bias
Social Loafing
(Howe, 2009, p. 261, Brabham, 2013, Gerber
and Hoi, 2012, Wash, 2013, Danmayr, 2014,
and Klaebe, 2012)
11. Frameworks for Analysis
Rosso’s Concentric Circle Constituency
Model
Danmayr’s Archetypes of Crowdfunding
Models
Kihlstedt’s Four Phases of a Capital
Campaign
13. Danmayr’s Archetypes of
Crowdfunding
Type of Crowdfunding Platform Offered
Business Model
Platform Setting
Target Group for Platform Users
(Danmayr, 2014)
14. Kihlstedt’s Four Phases of a Capital
Campaign
The Quiet Phase
The Campaign Kickoff
The Public Phase
The Campaign Closing Celebration
(Kihlstedt, 2009, p. 178-179)
15. Methods and Context
Developed a 37-Question Online Survey
Emailed to institutions known to be using
crowdfunding
Listservs
Fundlist
CampusCALL
LinkedIn
Higher Education Fundraisers Crowdfunding Users
Group
The Annual Giving Network
Crowdfunding University
16. Survey Participants
University of Connecticut Hartwick College
Towson University
St. Mary’s College of
University of Bridgeport
Cornell University
Penn State University
University of California,
Santa Cruz
Temple University
Washington State
University
Middlebury College
University of Maryland
Baltimore County
Maryland
St. Joseph’s College
DePaul University
University of Queensland
Augsburg College
Worcester Polytechnic
Institute
University of Cincinnati
Salem College
Anonymous
17. Results & Findings
Institutions were motivated to explore
crowdfunding:
To drive alumni participation rates
To engage student and young alumni donors
To explore all available revenue streams
To be more donor-centric and to connect donors
with their impact on students
To build a culture of philanthropy
18. Results & Findings
When did your institution first launch its crowdfunding
platform?
2010
0%
Other
10%
2011
5% 2012
5%
2014
35%
2013
45%
22. Danmayr’s Archetypes of
Crowdfunding Platforms
Crowdfunding Types
Most colleges and universities are using a donation-
based model
Others use hybrid approach with rewards-based
model
Business Model
Crowdfunding Platform Setting
Target Group
(Danmayr, 2014)
23. Crowdfunding as an extension of major
gifts?
Planned or
Principle Gifts
Major Gifts
Annual Giving
Crowdfunding
Prospects
(Adapted from Temple, Seiler, and
Aldrich, 2011, p. 45)
24. Capital Campaigns
(Revisited)
The Quiet Phase
The Campaign Kickoff
The Public Phase
The Campaign Closing Celebration
(Kihlstedt, 2009, p. 178-179)
25. Crowdfunding and the Millennial
Generation
Will inherit $140 trillion between now and 2052*.
Respondents shared a goal of engaging younger
and recent graduates.
15/20 respondents were using crowdfunding to
help support student organizations and grassroots student-generated programs.
Passionate about causes, not
necessarily about organizations
or institutions.
(GiveCorps, 2014)
26. A fully integrated approach
Don’t count out traditional vehicles
Direct mail
Calling programs
E-solicitation
Crowdfunding as online giving page
Replacement for PURLs
Giving Days or Challenges
27. Perks & Incentives
Contributors are attracted to projects offering
tangible products and services.
Sixty-five percent of respondents were not
offering perks or incentives.
Fair-market-value
Management
Experiential vs. Tangible
28. Recommendations
Define Your Campus Needs
Build an Army of Advocates
Educate Project Owners
Identify the Project Crowd
Define a Timeframe
Plan for Success
Utilize Metrics
Stay Flexible
29. Cautions
Crowdfunding should not replace traditional
annual giving strategies.
Oversaturation of constituency.
The dangers of third-party sites:
Hard credit vs. soft credit vs. no credit
Loss of brand control
Proliferation of start-ups
Crowdfunding is not just for young people.
“Crowdfunding is not a silver bullet .
. .”
(K. Williams, personal
communication, 2014).
(Greenberg, personal communication, 2014 and
McDonald, personal communication, 2014)
30. Conclusions
Crowdfunding in higher education can:
Help drive alumni participation rates
Broaden fundraising constituency bases
Serve as a lead generation and data capture tool
Educate students and young alumni about the
impact of philanthropy
Provide a seamless experience for newly acquired
donors as they transition to be long-term and/or
major gift donors
31. For more information, please contact:
Dayna Carpenter
Director of Annual Giving, UMBC
410-455-3377
dayna@umbc.edu
www.linkedin.com/in/daynacarpenter/
This presentation was submitted as partial completion of the requirements for the MS in
Strategic Fundraising and Philanthropy degree program at Bay Path College.
32. References
Aaker, J. & Smith, A. (2010). The Dragonfly Effect: Quick, Effective, and Powerful Ways
To Use Social Media to Drive Social Change. Jossey-Bass. San Francisco, CA.
Akers, S. (2012). The Secrets of Crowdfunding: A Step-by-step Guide to Getting the Most From
Your Kickstarter Campaign. Sean Akers.
Bartlett, T. (October 2012). A Kickstarter for Science. The Chronicle of Higher Education.
Retrieved Thursday, November 28: http://chronicle.com/article/A-Kickstarter-for-Science/135058
Brabham, D. (2013). Crowdsourcing. Massachusetts Institute of Technology. Cambridge, MA.
Brinckerhoff, P. (2004). Nonprofit Stewardship: A Better Way to Lead Your Mission-Based
Organization. Fieldstone Alliance. New York, NY.
Buchanan, P. (2000). Handbook of Institutional Advancement. Third Edition. Council for
Advancement and Support of Education.
Burnett, K. (2002). Relationship Fundraising: A Donor-Based Approach to the Business of
Raising Money. Third Edition. Jossey-Bass. San Francisco, CA.
Cohen, T. (February, 2013). Charitable Giving Report: How Nonprofit Fundraising Performed in
2012. Blackbaud. Charleston, SC.
Danmayr, F. (2014). Archetypes of Crowdfunding Platforms: A Multidimensional Comparison.
Springer Gabler. Steyr, Austria.
33. Dawkins, T. (December 2012/January 2013). Tap the Power of the Internet for Your Fundraising
Campaigns.
OurChildren.
Eberhart, R. (2011). The Big Idea. Middlebury Magazine. Retrieved February 26, 2014, from
http://sites.middlebury.edu/middmag/2011/06/28/the-big-idea/
Gerber, E. & Hui, J. (2013). Crowdfunding: Motivations and Deterrents for Participation.
Retrieved November
20, 2013, from http://egerber.mech.northwestern.edu/wpcontent/uploads/2012/11/2014_
CrowdfundingMotivations_TOCHI_Accepted.pdf
Gerber, E., Hui, J., & Kuo, P. (2012). Crowdfunding: Why People Are Motivated to Post and Fund
Projects on
Crowdfunding Platforms. Retrieved November 20, 2013, from
http://distworkshop.files.
wordpress.com/2012/01/dist2012_submission_11.pdf
Gobble, M. (n.d.). Everyone Is a Venture Capitalist: The New Age of Crowdfunding. ResearchTechnology Management.
Gossen, A. (2013). The Case for #Crowdfunding in #HigherEd #Advancement. Higher Ed
Crowdfunding. Retrieved
February 27, 2014 from http://higheredcrowdfunding.tumblr.com/
Hanselman, S. (2014). Crowdfunding in Advancement. Academic Impressions Webinar.
Howe, J. (2008, 2009). Crowdsourcing: Why the Power of the Crowd is Driving the Future of
Business. Random House, Inc.
34. Joly, K. (July 2013). Higher education crowdfunding: After social media and MOOCs, watch out
for
crowdfunding. University Business.
Kanter, B. & Fine, A. (2010). The Networked Nonprofit: Connecting with Social Media to Drive
Change. John Wiley & Sons,
Inc. San Fransico, CA.
Kihlstedt, A. (2010). Capital Campaigns: Strategies That Work. Third Edition. Jones and Bartlett
Publishers. Sudbury, MA.
Klaebe, H. (July 2012). How to work the crowd: A snapshot of barriers and motivations to
crowdfunding. Artsupport
Australia. Australia Council for the Arts.
Mansfield, H. (2012). Social Media for Social Good: A How-to Guide for Nonprofits. The
McGraw-Hill Companies. United
States.
McDonald, J. (2014) Fundraising Trends 2014: Grow Your Base of Monthly Givers. GiveCorps
Blog – Educated Giving.
Retrieved Wednesday, February 26, 2014 from blog.givecorps.com/fundraising-trends2014-grow-your-baseof-monthly-givers/hsFormKey
Ossakow, D. (August 2011). Would Microphilanthropy Work in Athletics Development? Athletics
Development
Frontier: Innovations. Practices. Results. Retrieved February 1, 2014 from
athleticsfrontier.com/archives/1929
Parry, M. (April 2009). Colleges Weigh ‘Yes We Can’ Approach to Fund Raising. The Chronicle
of Higher Education.
35. Sandlund, J. (May, 2013). How Crowdfunding can Reignite Alumni Engagement. TheCrowdCafe.
Retrieved
February 23, 2014 from http://www.thecrowdcafe.com/alumni-crowdfunding/
Sandlund, J. (April, 2013). Why Universities Should Get Smart on Crowdfunding.
TheCrowdCafe. Retrieved
February 23, 2014 from http://www.thecrowdcafe.com/editorial/
ScaleFunder (2014). Helping Intelligent Donors Invest in Intelligent Ways.
Stoner, M. (2013). Social Works: How #HigherEd Uses #SocialMedia to Raise Money, Build
Awareness, Recruit Students, and
Get Results. EDUniverse Media. St. Louis, MO.
Surowiecki, J. (2004, 2005). The Wisdom of the Crowds. Random House, Inc. New York, NY.
Switzer, C. (July 2013). Young Donors Are Turned Off by Out-of-Date, Uninformative Web Sites.
The Chronicle of
Higher Education. Retrieved July 22, 2013 from chronicle.com/article/Young-DonorsAre-Turned-Offby/140455/?cid=at&tm_source=at&utm_medium=en
Tempel, E., Seiler, T., & Aldrich, E. (2011). Achieving Excellence in Fundraising. Third Edition.
Jossey-Bass. San
Francisco, CA.
Thorpe, D. (2013). Crowdfunding for Social Good: Financing Your Mark on the World.
Tugend, A. (February 2014). The Effect Crowdfunding Has on Venerable Nonprofits Raises
Concern. The New York
Times. Retrieved February 8, 2014 from http://www.nytimes.com/2014/02/08/yourmoney/crowdfundings-effect-on-venerable-nonprofits-raises-concern.html?_rl
36. Vanderkam, L. (November 2010). Microphilanthropy if changing the face of charity. USA Today.
Retrieved January 23,
2014 from http://usatoday30.usatoday.com/news/
opinion/forum/2010-11-17
column17_ST_N.htm
Wash, R. (n.d.). The Value of Completing Crowdfunding Projects. Michigan State University.
Retrieved November 21,
2013 from http://rickwash.org/papers/donors-choose-icwsm.pdf
Wiseman, R. (July 2011). Middlebury College Draws Young Donors With Microphilanthropy. The
Chronicle of Higher
Education. Retrieved February 15, 2014 from chronicle.com/article/MiddleburyCollege-DrawsYoung/128427