Crowdfunding, for those that don't frequent the Interwebs, is a new way of raising money for your idea or creative project. Sites like Kickstarter are providing a platform for entrepreneurs to raise millions of dollars. Kickstarter has also become an extremely popular crowdfunding platform for Christian projects as well.
Kickstarter has reportedly received over $1 billion in pledges from 5.7 million donors to fund 135,000 projects, which include films, music, stage shows, comics, journalism, video games, and food-related projects (Source: Wikipedia).
What is truly unique about donation based crowdfunding is that you don't have to pay back the money since it is not a loan. You are also not giving up ownership in your enterprise in exchange for the funds raised. Backers receive rewards for contributing to a project. The rewards can vary from a simple thank you, to a signed copy of the finished album or DVD, a t-shirt, or even the honor of being listed in the credits of a movie. Since you don't get a tax deduction for your contribution the project creator does not need to be a non-profit.
Why I Turned To Crowdfunding
I have been operating my various organizations as for-profit businesses since 1991. Many have suggested to me along the way that I go non-profit. For me, I have always felt more comfortable with raising the money for our operations through the sale of our products and services. There is a major disadvantage to this structure, however, when it comes time to fund a major project. Crowdfunding turned out to be the perfect answer for us when we considered funding a faith based movie project.
The Numbers Don't Lie - And The Numbers Are Pretty Remarkable
Kickstarter campaigns have an overall success rate of 43%, which I think is downright amazing. That means that almost half of all campaigns are successful. Remember, however, that Kickstarter campaigns are an all or nothing proposition. If you don't raise your minimum, no money is collected from your backers and you walk away empty handed. Of course, the more money that you attempt to raise the lower your odds of success. In my own case, we are raising a minimum of $25,000 for How To Pray For A Financial Miracle. One chart I found online showed a success rate of only 25% on Kickstarter campaigns raising this amount of money. Still, in business today there are few things that you can embark upon that have a one in four chance of success. When you consider that this is money you do not have to pay back and that you are not giving up stock in your company, it is a dream for a project creator.
Raising Money For A Christian Movie
My Kickstarter campaign is to create a movie version of my book, How To Pray For A Financial Miracle. Christian movies, in particular, have had major success using Crowdfunding. Consider the success of Darren Wilson, who raised $357,000 to make a movie titled, Holy Ghost Experience. Wilson is by no means alone, as a quick Google search will list dozens of Christian movies made possible through crowdfunding.
Some People Just Don't Like The Idea Of Crowdfunding
Our campaign has been going now for three days and I just received the first angry e mail. In a nutshell the writer said that I should fund the movie with my own money. They added that if they had any money to give to a project they would use it to fund their own book idea. Well, maybe they are right in one sense. After my first introduction to crowdfunding a few years back, I thought much the same way. Why should I give a guy some of my hard earned money so that he can develop a salad dressing, design a computer game, or write a book? BUT, then I got it... Crowdfunding finally clicked with me when I discovered projects that I was personally enthusiastic about. For me, I don't get too excited about salad dressings or video games, but when I saw the Gosnell Movie Project on IndieGoGo I had to put some money in. A movie that will blow the lid off the most egregious abortion practices in the United States. A story of a doctor convicted of the murder of three infants. A story that the liberal media has all but buried - I'm in! There are millions of people perusing these projects, you just have to find that tiny percentage that your project will resonate with.
Why People Give Money To Crowdfunding Projects
For some people it is all about the cause. If you find a project that will further a cause that you believe in, why not throw in a few bucks? For others, it is mostly about the rewards. In fact, some crowdfunding campaigns offer such elaborate rewards, that what they are really doing is funding their project by pre-selling their product. Consider the Kickstarter campaign of the Coolest Cooler. Ryan Grepper, from Portland Oregon, raised more than $13 million dollars! This is truly remarkable, especially when you consider that the goal of his campaign was only $50,000. What is important to note here is that most of this money came from people that will receive one of his coolers as their reward. Still a great campaign, but quite different from one built around a cause.
A Step Of Faith And A Fleece Before The Lord
The idea of 'putting out a fleece before the Lord' comes from the story of Gideon. In Judges 6, when God directed Gideon to gather the Israelite army to defeat the Midianites, Gideon wanted to know if he was really hearing the voice of God. So, he put out a piece of wool outside overnight and asked God to make it wet while keeping the surrounding dirt dry (as a sign that he was really hearing God's voice in all of this). Gideon did indeed find his piece of wool completely soaked in water and the surrounding ground dry. It is always a good thing to confirm that you are really hearing God when you decide to embark on something big (such as in Gideon's case, going to war).
I believe that I have been hearing the Lord direct me toward spending more of my time sharing my testimony and the story in my book, How To Pray For A Financial Miracle. I have even been feeling lately that He is leading me to make this the centerpiece of what we do at ChristianMoney.com. The leadership of our organization has had numerous discussions about this. We have even thought at some point we might even stop teaching our popular courses on Internet business and eBook publishing so that we could spend more time on the topic of finances and prayer.
Am I Hearing God's Voice?
This movie project is my fleece before the Lord. I know it is a long shot for us to raise $25,000 to $50,000 to make this movie. What is so exciting, however, is the idea that it is now up to God. If He is in this He will fund it. I am so excited to see what God will do here. Either way, it will provide an answer on what direction I need to take our organization. There is also the side benefit here of learning how to actually do one of these campaigns. This experience would also give me the opportunity to help others with a Christian crowdfunding training of some kind. Have you raised money with crowdfunding? Please use the comments section below to share your own story.
Helping you make the most of God's money!