Are Crowdfunding Platforms Worth it?

Posted on October 6, 2014

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There are lots of people using crowdfunding platforms in Archaeology, as seen in Thomas’ list. There are now three platforms dedicated to crowdfunding Archaeology and Heritage: MicroPasts, DigStarter, and  CommonSites. Also, we see that some of these platforms- mainly kickstarter – help send donors to these projects, though a small number. But, are these platforms worth it?

It’s All About the Benjamins

Let’s look at the costs of Crowdfunding platforms. So far, Archaeologists have used the websites: Kickstarter, Indiegogo, CommonSites, MicroPasts, DigStarter, Sponsume, RocketHub, Pozible, Petridish, and GoFundMe. There were 452 platforms in 2011, but I will stick to the ones used by archaeologist so far. CommonSites, MicroPasts, and DigStarter do not list prices (correction DigStarter does but I missed it) but the others do:

Platform Fee Processing Fee Processor Source
KickStarter 5% 3-5% Amazon payments https://www.kickstarter.com/learn?ref=nav
Indiegogo 4-9% 3-5% Paypal http://go.indiegogo.com/pricing-fees
sponsume 5% 3-5% Paypal http://www.sponsume.com/getting-started
RocketHub 4-8% 4%+ Own? http://www.rockethub.com/education/faq
Pozible 3-5% tiered 3-5% Stripe, Bitcoin, Paypal http://www.pozible.com/help/i/terms_and_conditions#fees_a
petriDish.org ??? 3-5% Amazon payments http://www.petridish.org/faq
gofundme 5% 3-5% WePay, Stripe, Paypal, FirstGiving http://www.gofundme.com/pricing

You will notice all of the different platforms pass on the payment processor charges and their fees are all in the 5-10% range. Some people will be losing between 10-15% of whatever they raise. There is absolutely no way around processing chargers, that is part of taking card payments, but do these platforms bring in more users i.e. money, to your campaign than they cost? Using the data on contributors from my last post I can tell you absolutely not in the case of sponsume, RocketHub, Pozible, and PetriDish (gofundme does not have the right sort of data). From what I can tell the projects on these platforms brought in almost all of their own contributors. The picture is more complex with Indiegogo and Kickstater. They do bring in outside people i.e. people who surf their platform to give money to projects but I can’t tell how much. It all depends on if those surfers donate more than 5-10% of the platforms costs. If they don’t, then what are you paying a website for?

DIY

You can replicate almost all of the aspects of a crowdfunding website. Using a blogging platform which any one can set up e.g. WordPress or Blogger, you can put up a webpage describing your project, embed a video, and list rewards, essentially what a crowdfunding website offers. You then embed a paypal button or whatever payment processor you are using on a webpage. Paypal has a button creator that allows you to make everything you need to process the payment, just cut and paste the code they give you. You may have manually update the site each day e.g. we have raised this much but on a $30,000 project that is saving you $1,500-3,000. Five minutes a day to edit a webpage makes you $3,000, that seems like a good deal. All of the services offered can be replicated, usually with no technical skill at all

Is the Website Worth It?

‘Worth it’ is a subjective term. It could mean ease of use. It could mean customer service. However in terms of money and time it does not look like it… kind of. If you have a small project, say raising $500, than spending the slight extra time (with a platform your still have to write everything, make a video, marketing, etc. all the time consuming aspects) to make a website on your own might not be worth it. Moreover, you might make that $25-50 dollars in platform fees from a random platform surfer. But, if you are raising large amounts of money the advantage goes to the DIY or free platforms (if any exist). On most platforms you will find it hard to raise the $5000 extra in donations from random people to make it worth it. Moreover, you really want to be spending the money on your project. Giving up $2000 in platform fees seems like a steep price to pay.

Support vs. well, no support.

We just finished a very interesting podcast with DigVentures. They offer a much more personal service on their platform and lower costs. Unlike other platforms, say Kickstarter, where they have some tutorials on how to crowdfund but very little support. It would be very interesting to see if personal support can make for a better crowdfunding project. Money is a one dimensional way of viewing if a platform is worth it. While most platforms don’t offer any support. I do wonder, if those that do offer support make the fee – really a consultancy fee- worth it? In terms of bringing the websites ‘giving surfers’ to the project it does not appear so but if they could help you bring in your network, connect better with your network or an outside network they might be worth it. For examples, proper training could increase your fund raising efforts by 30% ? 60%? 70%? easily enough money to make it financially worth your while to use the platform or consultancy.

This is the fifth post on my series on crowdfunding archaeology (Post 1- Thomas’ numbers, Post 2-presentations from DigVentures, Post 3- the money of crowdfunding, Part 4- was on users and do platforms attract them)

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