Is Crowdfunding Right for You?

Moms are finding value in crowdfunding. It can be an effective way to raise money for a favorite cause, to defray heavy medical expenses, fund a startup business, or fulfill a personal goal like college education. Crowdfunding plays to the human desire to help and share. It uses technology and social media to reach thousands for even the smallest donation. So, you’ll want to know if crowdfunding is right for you.

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How it works.

Business News Daily defines “crowdfunding” as “a way for businesses, organizations and individuals to interact with other individuals, communities and organizations to raise a fixed amount of money as a loan, donation or investment.”

According to Mark Koba, reporting for CNBC, “Those asking for the funds create an online profile to explain their fundraising goals and then share their project with the public as well as their friends, family and social networks.”

You use a crowdfunding website to open an account where you post your interest. In most cases, you provide photograph(s) and a written appeal for contributions to your cause, charity, or business.

The most successful results come from appeals for modest target goals before a specific deadline. Some profiles might try to raise $1,000 for a walk supporting autism or breast cancer awareness. Others want to subsidize their honeymoon. And, still others want to open a small business.

What to look for.

Fundraising platforms have multiplied and compete for your attention. So, it makes sense to shop intelligently and thoroughly.

The key to crowdfunding is reaching a crowd. The broader reach the platform has, the better it is  for you. Three things should interest you: 1. The traffic claimed by the website; 2. Those used by those you know; and, 3. Those that reach the demographics you want.

According to Sara and Josh Margulis, co-founders of Plumfund.com, the stress should be on “crowd gifting™.” The appeal should target those who get personal satisfaction from giving.

Funding campaigns that offer some reward for donations or provides some equity for investors often succeed better than those that do not. However, if you are offering equity in your startup business, you have to comply with SEC regulations on investments. If you are raising funds for a cause, you cannot promise tax breaks unless the cause is a registered non-profit.

Fees and processing charges can be your deal breaker. Your research should determine the disclosure available on fees, credit card processing charges, and per donations fees.

Alexa rankings and Google PageRank metrics report the browser traffic to the various funding sites. And, you can weigh all these factors against benchmarks like Facebook friends these platforms attract.

What it takes.

Funding your needs may take more effort than you think. You can’t just set it up and walk away, especially where you are trying to fund a business.

Crowdfunding is a marketing effort, and you must give it the same attention. For example, it takes planning over several months before launch.

You want to post the best language, well-chosen visuals, and realistic goal. You also want to include the effort as part of a larger marketing strategy, including the campaign in emails, press releases, social media, and other marketing channels you already have in place.

It also takes some monitoring. For instance, you should respond personally to every contribution with a message speaking to how this donation helps you meet your goal and asking givers to share the idea with others.

Is it right for you? Crowdfunding is your answer if you have a plan, are willing to work the process, know your target audience and goal, and have something valuable to offer – even if it is just personal satisfaction in gift giving.

Author’s Bio: Mike is a freelance contributor to OutreachMama and Youth Noise NJ who helps businesses find their audience online through research, content copy, and whitepapers. He frequently writes about management, marketing, and sales with customized outreach for digital marketing channels and outreach plans depending on the industry and competition.

Skye About Skye

Real Mom Review's founder and main author, Skye Moyer is a 27 year old, stay at home mother of four beautiful children who is currently traveling all over the U.S. in her RV! She has been married to her best friend for almost 10 years and is happiest when surrounded by family & friends!

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