You may have seen this word being thrown around the internet a lot: crowdfunding—but what is it really? And is it reliable? Simply put, crowdfunding is the practice of raising money via small contributions from many people. Many make use of popular crowdfunding sites such as Kickstarter, Indiegogo, and CauseVox to raise funds for a certain project or cause. Through these platforms, projects are given global exposure and people from around the world can choose to donate to the cause through a secure partner payment portal. Though not all crowdfunding campaigns are successful, there have been many success stories from crowdfunding sites, further adding to their popularity. One such case is the Nikola Tesla Wardenclyffe Science Center. Frustrated with the lack of public knowledge about scientist and inventor, Nikola Tesla’s innovations, a web comic author decided to call on public support to save the site where the Tesla Tower previously stood. In nine days, he was able to raise $1 million paving the way for the tower to be restored and the Tesla museum to be built in the same area. If it all sounds too good to be true, it’s important to note that these platforms are certified and have strict guidelines and regulations to make sure projects are legitimate and you’re not getting scammed. Given the right mix of great ideas and worthy causes, projects launched on crowdfunding sites can go a long way.
Recently, however, companies or even individuals seeking funding, have increasingly used self-hosted crowdfunding campaigns. Kit Perkins is the co-founder of Ergodriven, a company perfecting how you work with better ergonomics. They did their own on-site crowdfund completely from scratch… and raised $100,000 in 30 days. Glowforge is another company which built an email list then ran a crowdfunding campaign to record breaking numbers - raising almost $28 million in 30 days, all on their own website at glowforge.com.
The main reasons for this shift is that some crowdfunding sites have strict policies about what project to accept or refuse in their sites. Secondly, not all crowdfunding sites allow users to have enough leeway in terms of how they want their campaigns to proceed. Some sites like Kickstarter follow the AON or all or nothing policy. This means, if you are raising, say $1M and at the end of the campaign period is able to raise only half of the target amount, you don’t get anything and all the money pledged for the project reverts to the donors. In fairness, there are also some sites which offer an option called KIA. KIA means keep it all, whether the target is hit or not. Thirdly, many would-be users of the crowdfunding sites are put off by the fees being charged to the users which can range anywhere from around 3-5% of the amount raised.
On its part, Eastbridge opted to conduct its own crowdfunding campaign using its own website so that we have the complete control of how the campaign is conducted, the information is disseminated and the branding is maintained without being restricted by anyone. Of course we also operate on a different mindset. We target a very small but also very focused people – the parents in our school, very close friends and acquaintances, colleagues in various organizations, etc. Then we leave everything to faith. If Eastbridge High School’s time has come, it will rise from that small beginning.
Those who may want to ask why Eastbridge resorted to this method of funding or why, despite its many years of operation, Eastbridge has not saved enough money to finance this project. The short answer is because the school is a non-profit, non-stock corporation and therefore not allowed to give out dividends nor to save but to put back its earnings to the improvement of the overall operation of the institution. It's the same non-profit status that qualifies the school to receive donations.
(Photo credit: startupnation.com)
