Does Kickstarter Work for Nonprofits?

Kickstarter has proven a useful fundraising tool for thousands of projects - but does it work for nonprofits? Read on to find out.

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As Kickstarter approaches its fourth birthday this April, it's likely that you've a least heard of this trendy new way to fund raise. Or perhaps you're even one of the 3.7 million people who has backed a project on Kickstarter since its launch in 2009.

Incredibly, given its short history, Kickstarter has helped raised over $545 million, helping fund more than 38,000 projects. Kickstarter has quickly soared past the 'start-up' phase, with everyone from Hollywood producers to satellite engineers seeing it as a viable way to fund their projects.

The catalyzing prowess of Kickstarter is clear, but the question remains: Will it work for nonprofits? Let's explore...

Firstly, what exactly is Kickstarter and how does it work?

Kickstarter is the 'world's largest' crowd funding website and mobile app. Unlike traditional fundraising sites, it requires users to give their backers relevant 'gifts' in return for their donations. Funds are only accepted from backers and rewards are only distributed if the total funding goal is met. This reassures backers that they'll only part with their money if the project truly has a chance of success. It reassures project creators by ensuring they won't have to provide rewards unless they achieve their funding goal.

So, can it work for nonprofits?

In short, of course it can! However, there are a few caveats worth considering:

  • Kickstarter's guidelines require all projects to be specific, with a clear end-point. A nonprofit can't simply create an on-going project, raising funds for its overarching cause. For example, a cancer charity could not create a project devoted to raising funds for 'cancer research.' Instead, it has to be far more specific, offer a clear deliverable and meet the funding goal within a given deadline.

  • The project must also be related to one of the following: Art, Comics, Dance, Design, Fashion, Film, Food, Games, Music, Photography, Publishing, Technology, and Theater. Though this may seem limiting to nonprofits that sit outside these sectors, Kickstarter could still be an option for funding a project-within-a-project (i.e. raising money to create a film or magazine that spreads the wider message of your organization).

  • Remember, Kickstarter is a for-profit company. It takes 5% of all funds you raise for your project. The process (for US users) also requires you to have an Amazon Payments account, which can take an additional 3-5% of funds. However, if you are a registered nonprofit, the Amazon Payments fees may be tax deductable. Before creating a Kickstarter project for your nonprofit, it's worth considering whether you could successfully achieve your goals on a platform that doesn't take a cut of the earnings.

What are some examples of successful nonprofit Kickstarter campaigns?

Open Goldberg Variations

  • The project:  To recording Johann Sebastian Bach's 'Goldberg Variations' and placing them in the public domain for anyone to listen to and use for free.
  • Funding goal: $15,000
  • Date funding goal was achieved: June 3, 2011
  • Backers: 406
  • Total raised (so far): $23,748

/Crowdring

  • The project:  To create a viable system whereby people around the world can sign a petition simply by dialing a number on their mobile phones (i.e. a free 'missed call').
  • Funding goal: $15,000
  • Date funding goal was achieved: March 17, 2013
  • Backers: 206
  • Total raised (so far): $15,252

In conclusion, Kickstarter is certainly an option for nonprofits looking to fund a specific, relatively short-term goal. It requires users to provide a clear framework for their projects (including specific deliverables) and reward their backers with relevant gifts. Unlike other fundraising techniques, this approach makes sure the end goal is something quite tangible and succinct. Kickstarter projects expose the fundraising process to everyone so that backers know exactly how and when their money will be spent.

All of this, together with the excitement that comes from being part of a 'viral' Internet movement, encourages people to participate. Kickstarter is certainly not a means by which nonprofits can exist and fund their on-going programs, but it is a potential option for specific projects that serve the wider cause.