10 Steps to Successful Crowdfunding

The following piece was first published on the AltFinLab blog and was originally published on July 18, 2017.  

The spirit of gotong royong is taught to children from a very young age at schools all over Indonesia. It is the Indonesian brand of volunteerism, or communal work—where members of a community gather to accomplish a task. Traditionally, the task could be to fix a neighbor’s home, or build a road or a bridge.

Today, especially in urban areas, such community work is hard to find. But it does not mean the spirit of gotong royong is gone. The communal culture stays with modern Indonesians. In spite of busy lifestyles, they continue to help others through philanthropy. A study found that philanthropic support in Indonesia totals $600 million per month. Young and tech-savvy Indonesians use the internet for their philanthropic activities—giving rise to crowdfunding.

The World Bank estimated that, with government support, the global crowdfunding market ranged from $4 billion to $300 billion. The Bank further predicted crowdfunding investment would be worth $96 billion a year in developing countries alone by 2025. In Indonesia, the leading crowdfunding platform and our partner kitabisa.com has channeled over 45 billion rupiah ($3.5 million) in just three years of operation.

Meanwhile, it is estimated that Asia Pacific countries will face a funding shortfall of about $44 billion to achieve the Sustainable Development Goals (SDGs). So if development challenges are to be tackled effectively, the slack in finances needs to be picked up by the private sector. This prompts UNDP Indonesia to experiment with innovative and alternative financing models and Indonesia’s philanthropic tradition is an opportunity to be tapped.

Indonesia’s demographic also presents an opportunity. In the coming decade, the largest cohort of young people in Indonesia’s history will start productive years. A study by Goldman Sachs found millennials (defined as people born after 1980) are more likely to participate in a crowdfunding campaign—47 percent have donated or indicated an interest to back a campaign.

Our first crowdfunding campaign was launched in March 2016, on the occasion of the World Water Day. In two months, we raised 350 million rupiah (nearly $27,000) to build a solar-powered water pump in one of the country’s driest region of East Sumba. This activity is part of our climate change adaptation project, for which we partnered with the ministry of environment and forestry, and the local government.

We want to share the ten things that help our successful campaign:

1. Tell a story about how the campaign helps real people. We use the narrative that women and children in East Sumba’s Napu village had to walk or ride a horse for hours every day just to get water. We were raising money to build a water pump closer to the village, giving the children more time to go to school, and the village better access to clean water and sanitation.
2. Tell it with visuals. We use good quality photos, videos, and infographics to show the situation on the ground and what the campaign tries to change.
3. Get a celebrity endorsement. We were fortunate to have our SDGs Movers, actor Reza Rahadianand jazz singer Eva Celia, who attracted free publicity for the campaign.
4. Share it far and wide. Share it with friends and family, on social networks, and through communities. Our SDGs Mover and publisher Ronald Liem helped the campaign by promoting it in his business and personal circles.
5. Talk about it. Face to face contact can never be replaced by smart phones. All our SDGs Movers and others who supported our campaign took the time to talk about its impact.
6. Define targets for various sources of funding. We set realistic and optimistic targets for funds to come from corporate social responsibility (CSR), philanthropic groups, students reached on social media, individuals and communities reached through our celebrity endorsement, even family and friends of our staff members. For CSR, we tried to get matching funds. As part of corporate philanthropy, a lot of companies are willing to match donations made by employees to a cause of the employees’ choice. Clearly defined targets allowed us to ramp up efforts from other sources when we noticed one or more sources were not performing as expected.
7. Keep track of your donors. If someone has supported your campaign in the past, and your current campaign is on a related cause, they may be interested in supporting you again, or refer you to someone who is willing to help.
8. Keep donors updated. They give you money, they would want to know how the money is spent. We send progress reports to our donors about the construction of the water pump.
9. Report progress on social media. Especially if young people make up a good portion of your donors, keeping them updated on social media gives them a sense of continued engagement. We had 15 youth volunteers who acted as our ambassadors on their social media. We met as a group prior to the campaign, kept them updated with the fundraising progress, and rewarded them with certificates.
10. Be sure to have an agreement in place between your organization, the crowdfunding platform, and the implementing partner to clarify accountabilities and responsibilities, especially with regard to the funds.

Crowdfunding campaign is a lot of work. It requires technical capacity in the area of the project, and in public communications. While the funds raised were for a specific and limited use, there was an added value gained from the campaign in the form of publicity and awareness of the SDGs. We believe that this is an innovative financing method that we can and will continue to explore, and we welcome any suggestions for potential projects that could attract a similar level of public interest.