As crowdfunding over the internet becomes more popular, many individuals and companies see it as a valuable tool for the future of business.
You see a stranger on a street corner asking for money to fund a new idea. They stop you and tell you every detail about their project, show you visuals of what the prototype will look like, and then ask you to fund the project for them. Would you walk by the person? Would you donate to the campaign, then share it with friends?
Though this situation may seem like an unusual one, the truth is it happens all the time on the internet. As social media grows, so does the practice of crowdfunding.
A study by Pew Research Center reports that approximately 22% of Americans have donated to a crowdfunding project before through websites like Kickstarter, Indiegogo, and GoFundMe. While this number may seem small, the data shows that 43% of donors give more than $100 to an individual project.
Websites reward donations to projects through increasing levels that incentivize financial gifts. The more exclusive levels mean larger monetary gifts to the campaign, making a donor a “super fan” of the startup. These sites have become increasingly popular with new ventures.
In 2015, Melinda Staup, a Ball State alumna, was working on a film along with other students. They were putting some of their own money in the project, but with no financial return, they decided to use Kickstarter.
“When it came around to this project, it wasn’t something that I questioned,” says Melinda.
Melinda and her team came from diverse backgrounds, so it was easier to get a bigger group of people interested in their project. The students surpassed their $1,500 goal on Kickstarter by more than $100 and successfully produced the film.
It’s not as simple as posting a message asking for money, however. Crowdfunding is an exercise in storytelling.
Stormie Kirby, assistant director of marketing for the Ball State Foundation, says that she has seen a shift in the fundraising world, and it’s becoming more and more about personal experience and accounts. Kirby works alongside the foundation’s crowdfunding pilot program, which receives student and faculty applications for campaigns.
She also worked on “One Ball State Day” this year, helping crowdfund money to support the campus’s needs. She says this event helped spread awareness about the need for donations, as well as allow people to give to a specific part of Ball State they are passionate about.
“It helped a ton,” says Kirby. “Not that people didn’t know what crowdfunding was before, but now people understand the power of philanthropy and there is more of a culture of it since One Ball State Day.”
Kirby says she has definitely seen a change in how people give.
“The phone-a-thon phase of fundraising is probably going to be phased out,” she says, “so you can see that transition pretty well when you look at the numbers.”
Ball State University donors gave more than $1 million through bsu.edu/give during the funding year of 2019. This was the first time in which Ball State surpassed $1 million in online giving.
