With crowdfunding, rethink your expectations for engaging public media’s supporters

Commentary by Richard McPherson

As a growing number of public media organizations turn to Kickstarter to raise funding for new projects — with mixed success — development professionals and others in nonprofit media have begun evaluating both the potential and limitations of this new fundraising method.

The variety of organizations experimenting with crowdfunding this year has expanded beyond podcasters and independent producers to include public stations, online news organizations and even NPR’s Planet Money, which revealed the extent to which public radio fans are eager to directly support their favorite programs.

Chana Joffe-Walt of Planet Money talks up the reporting team's special reporting project in a video produced for Kickstarter. The campaign demonstrated crowdfunding's power to convert pubradio audiences into enthusiastic supporters.

Caitlin Kenney of Planet Money talks up the reporting team’s special reporting project in a video produced for Kickstarter. The campaign demonstrated crowdfunding’s power to convert pubradio audiences into enthusiastic supporters.

A Kickstarter campaign organized by the Planet Money team raised $590,000 this spring, surpassing its goal of $50,000 to cover the cost of a special reporting project on the manufacturing of a T-shirt. The overwhelming response to the campaign put crowdfunding among the ranks of potentially major sources of funding and converted thousands of Kickstarter backers into enthusiastic promoters of Planet Money.

Planet Money’s success with Kickstarter was exceptional: Very few campaigns succeed at that scale. Most raise less than $10,000, but as more people use Kickstarter, hundreds of campaigns have hit six-and even seven-digit fundraising totals.

As I talked with professional fundraisers about crowdfunding’s potential, I found divided opinions. Skeptics believe these campaigns raise only a drop in the bucket compared to what public media needs to survive and thrive; boosters say that Kickstarter provides important seed money for new projects.

From my perspective, crowdfunding is one of the most unusual breakthroughs I’ve witnessed in 30 years in public media fundraising because it combines the ability to generate money while uniting small groups of donors behind creative projects.

Public media producers seeking crowdfunding most often turn to Kickstarter because of its focus on film, arts and media projects — and because of its size. According to Kickstarter’s website, in the less than five years since its launch, the platform has amassed 5.1 million “backers,” more than 25 percent of whom are repeat donors. More than 150,000 Kickstarter users have contributed to 10 or more projects.

Last year Kickstarter donors had given over $320 million to projects of all sizes. That’s more than double the 2013 congressional appropriation provided to the National Endowment for the Arts and roughly 75 percent of CPB’s federal funding.

But some rules of the road on Kickstarter make it a quirky and unpredictable platform for professional fundraisers. Each project running a campaign faces a scary challenge: Raise 100 percent or more of your goal or receive nothing for your efforts. Only 44 percent of Kickstarter campaigns succeed in hitting their targets. Those that do tend to focus on very specific creative activities or projects.

Crowdfunding has undoubtedly become another source of cash for creative media, but I wanted to examine whether it can play a larger role in raising money for public media organizations. After talking with professionals within nonprofit media — including an online news organization and a grantmaker at the Knight Foundation, I learned that it has become an important tool for fundraisers and media creators, but only those who are prepared to attract and engage audiences in a very different way from traditional public media memberships.

‘A story behind every project’

Kickstarter is committed to its all-or-nothing practice. Withholding funds until a project hits its goal obviously protects the backer from a pointless donation. This “money-back guarantee” lowers donor anxiety and allows donors to see how many others are already in. It also protects the producers behind the project from receiving some, but not enough, funding to succeed.

The requirement also creates “a narrative arc for rallying support,” according to Justin Kazmark, Kickstarter communications specialist. Ultimately, he says, “every Kickstarter project is a story” — of a new idea and the individuals behind it. The probing, specific and even relentless questions that potential backers put to a Kickstarter project creator quickly reveal that they are not passive donors.

As I heard repeatedly during interviews, success at this fundraising method requires a shift away from thinking about crowdfunding as simply a gathering of small gifts. It’s more akin to joining and building a cohesive funding community.

“You have to go into crowdfunding on different terms with the donors,” noted Gabe Bullard, news and editorial strategy director at WFPL in Louisville, Ky., who raised $4,000 on Kickstarter to pilot Unbound, a radio series featuring short fiction. Bullard could have gone to traditional funders with a grant proposal, “but we felt Kickstarter was right because we wanted to see if there was real interest and support for the show.”

Louisville Public Media mounted a crowdfunding  campaign to pilot Unbound, radio series featuring short fiction.

Louisville Public Media mounted a crowdfunding campaign to pilot Unbound, radio series featuring short fiction.

A number of donations to Unbound came from out of state, but many contributors were already “big boosters of the station,” Bullard said. He described the campaign’s backers as “people who tweet a lot and give often. They were excited with a new way of giving to make something specific possible.” In creating the campaign, WFPL had to “use an entirely different language, not asking for general support for ongoing operations but for money to use in a new way.”

Though the campaign operated outside of WFPL’s traditional on-air pledging and membership system, the station is inviting its Kickstarter donors to opt in as station members without making an additional gift.

Given the obvious limits on pledge drives and the often punishing cost of acquiring members by mail or phone, public media fundraisers are keenly interested in the results from WFPL’s test appeals to Kickstarter donors. It will be a full year before the station can draw conclusions about their giving patterns.

When donors are in charge

To Rebecca Saar, former marketing manager for the Center for Investigative Reporting, crowdfunding is an exercise in building relationships. She managed the Kickstarter campaign for FOIA Machine, which backed an online platform for filing and tracking Freedom of Information Act requests. The campaign raised nearly $54,000, more than three times its goal of $17,500. More significantly, it added over 2,000 new CIR members at a cost of less than 20 cents on the dollar. “Kickstarter backers are not deciding whether or not to give,” Saar says.

CIR created a cute robot character to help promote its FOIA Machine crowdfunder.

CIR created a cute robot character to help promote its FOIA Machine crowdfunder.

“They are deciding whether or not to be in a relationship with you.” During the campaign, which launched in mid-July, she was struck by the need to answer questions, post updates and host conference calls among potential contributors.

“Backers can change their pledge amounts or even retract them before the deadline,” Saar says. “When they do decide to enter the relationship, they become proud supporters and share your project with their network.”

The campaign affected every CIR staff and board member, says Christa Scharfenberg, CIR associate director. Stakeholders at all levels of the nonprofit news organization contacted colleagues, friends and family. “Everyone became heavily invested in such a public effort to support a new CIR activity,” she says. “People would yell out across the newsroom when we hit a new goal in our campaign.”

“We’ve done canvassing, mailings, phone programs and online campaigns, and nothing captured the attention and support of the staff like Kickstarter,” Scharfenberg says. Now CIR is reviewing its traditional membership program and testing online fundraising techniques drawn heavily from the Kickstarter playbook, including giving levels, rewards and tactics for tapping CIR members as an outreach network.

I served as an advisor to CIR on grassroots fundraising and was very engaged in the Kickstarter campaign. Like Scharfenberg, I came away from the experience with new insights about the tools and techniques of traditional fundraising. After Kickstarter, CIR’s online donation page seemed too focused on steering the user through completing a transaction (the objective of the organization) and not focused enough on initiating a stimulating relationship (the objective of the donor).

CIR’s experiments will likely include a redesign of the giving page to offer more creative rewards to donors, giving donors more flexibility in how they can support the organization, and adopting language informed more by activism than corporate-speak.

CIR will also test Tugboat Yards, an online fundraising platform focusing on independent media organizations, to generate donations for one of its content areas. The site, which hasn’t officially launched yet, was founded by Andrew Anker, who has been monetizing media on the Internet since he helped launch HotWired, the first ad-supported website, and later Evite and PandoDaily, where he is now executive chair.

“I love Kickstarter, but I think their strength — focusing on a project with a single goal — doesn’t work for media,” Anker says. “Media and journalism are more about process than product and the ongoing relationship between creators and consumers.”

Though still in its infancy, Tugboat Yards looks and acts a lot like Kickstarter. It aims to specialize in fundraising for public media and grassroots journalism while soliciting contributions through monthly sustainer gifts.

Litmus test for startups

From the perspective of a grantmaker, a Kickstarter campaign can reveal something not easily discernible through evaluations of professional grant requests: a project’s ability to engage audiences and supporters on their terms.

The Knight Foundation began offering challenge grants for Kickstarter media projects last year as an experiment, according to John Bracken, director of journalism and media innovation. Though crowdfunding “is not ideal for every project,” Knight grantees such as ProPublica, the Texas Tribune and CIR have raised money and found new backers.

“Activating passionate fans is the big aspect,” Bracken says. “Kickstarter can be something like a litmus test for us.”

Two aspects of the Kickstarter experience make it a good testing ground for new media projects, Bracken says. “There’s a technology element that allows people to give easily using the same device that provides content. And there’s a cultural element that lets people ping their friends when a project is exciting.”

Crowdfunding also helps public media improve in an area of weakness, Bracken adds: “Tapping into new audiences, especially 20-somethings, which is a challenge to all organizations born before the Internet.”

To Bracken, the public nature of a Kickstarter gift is key to turning followers into activist fans: “Donors are giving more than money. They are putting their personal brand on a project, which is a big commitment. For donors, it’s like putting on a bumper sticker.”

Game-changing potential

“When you succeed on Kickstarter, you walk away with something much bigger than funding – you get a community,” says Kickstarter’s Justin Kazmark. “Funding is only the first chapter.” For public media, the biggest question going into crowdfunding may not be, “How do we hit our fundraising goal?” but “What will we do with a new base of fired-up fans?” As a practitioner and observer of crowdfunding, I foresee several game-changing possibilities.

As individual film and radio producers build followings via crowdfunding, I believe we’ll see the emergence of superfans who will support, and perhaps influence, program selection and content. If the growing body of crowdfunded films is any indication, the next Ken Burns will probably emerge from the ranks of Kickstarter projects.

McPherson

McPherson

Local stations with the capacity to interact with their audiences will conduct crowdfunding campaigns just to uncover activist members who are tired of pledge drives and direct mail. We will see the rise of a “virtual volunteer” whose tweets will play a key role in both program support and audience development, especially for local productions. Similarly, crowdfunding will eventually earn a role in market testing and then seeding the cost of new programs.

For news organizations, crowdfunding will be another step toward the holy grail of impact, a way to reach an audience of donors who want to know more about issues they follow and who will support coverage and promote content to a widening circle of citizens.

Everyone I interviewed, and many other colleagues, described an affinity between public media and crowdfunding. After all, crowds have been funding us for years through pledge drives and membership appeals. Kickstarter and other crowdfunding platforms add another dimension to this tradition: an active, engaged relationship between donors and content producers.

Measured against the multimillion-dollar annual budgets required to run a big public media station, crowdfunding will probably remain a small source of income in comparison to other funding sources. But measured against the struggle to attract new funding for new programs, crowdfunding has strong potential to provide a distinctive platform for demonstrating the creativity and public-service commitment of public media, as well as a cost-effective way to expand grassroots donor bases.

As the founder and owner of McPherson Associates Public Media Co-op, Richard McPherson has advised many public stations on fundraising practices. He’s also worked with many other nonprofit organizations, including President Carter’s conflict-resolution center, the late Mrs. Martin Luther King Jr. and major universities and libraries. Since selling McPherson Associates to colleagues, he continues to work as an independent fundraising consultant. He wrote the book Digital Giving: How Technology Is Changing Charity (2007).
This commentary was first published in Current, Nov. 18, 2013.
A photo caption in an earlier version of this story misidentified Planet Money’s Caitlin Kenney as Chana Joffe-Walt. The caption has been corrected.
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