Project Idea: Crowdfunding platform for OTG Seventh-day Adventists.
Please ignore the navigation bar at the top of the page-I’m just using an un-linked page from AsItReads.com.
Below is a list of my initial ideas about a crowdfunding Project for OTG community. I’m still learning about crowdfunding; Maybe there is something already in the works that we can adopt…..
Name: OTG Go Fund(otggofund.com?)
(“Go” as in “Go ye therefore…”-Matthew 28:29; name to be determined but used for description below*)
“Imagine a world where any “qualified” OTG Adventist anywhere in the world can connect to a powerful network of resources and have access to immediate and adequate funds to accomplish the Lord’s work.”
Goals:
- To create a crowdfunding for nonprofits similar to GlobalGiving, CauseVox, or CrowdRise to help facilitate OTG Adventists around the world to raise money using an online platform.
- Provide a platform for nonprofit organizations to connect with their donors and their respective charitable projects.
- Create a powerful campaign platform for all qualified charitable organizations, including schools, churches, independent ministries, etc; to raise funds for their respective projects,
- Create a wide variety of charitable, tax-deductible donation opportunities for everyone.
FirstGiving.com is a peer-to-peer nonprofit funding platform. They provide tax deductible receipts for Indiegogo and other Crowdfunding platforms working with nonprofit.
Some popular crowdfunding sites: Kickstarter, Indiegogo, GoFundMe and Crowdfunder
Business Model
- *OTGGoFund will be a donation or reward based funding platform which allows users to create their own website to describe what they are raising the money for.
- During this process, members can describe their fundraising cause, the amount they hope to raise, and upload photos or video.
- Once the website is created, *OTGGoFund allows users to share their project with people through integrated social network links (Facebook, Twitter, etc.) and email, etc..
- People can then donate to a user’s cause through the website using only a debit card or credit card and track the progress of their funding.
- Those who donate can also leave comments on the website in support of the project.
- *OTGGoFund will generate revenue by automatically deducting percentage-based fee from what each donation users receive; Additional fees will be charged for extra campaign services provided by *OTGGoFund.
- If the user receives no donations, then no charge is made.
- Portion of the revenue may be used to fund various projects selected by *OTGGoFund.
Basics:
- Campaign is a finite work with a clear goal that you’d like to bring to life.
- Funding goal is the amount of money that a creator needs to complete their project.
- Creator is the person or team behind the project idea, working to bring it to life.
- Backers are folks who pledge money to join creators in bringing projects to life.
- Pledges are the promise of payment
- Rewards are a creator’s chance to share a piece of their project with their backer community. Typically, these are one-of-a-kind experiences, limited editions, or copies of the creative work being produced.
How does it work?
- Each campaign is independently created and crafted by the creator and is posted onto a webpage provided by *OTGGoFund.
- Each Creator on *OTGGoFund should have complete control and responsibility over their campaign.
- They could spend weeks building their campaign pages, shooting their videos, uploading images and detailed info, etc.
- When they feel ready, a creator can launch their campaign on the site and share it with their community.
- Every campaign creator sets their campaign’s funding goal and deadline. If people like the campaign, they can pledge money to make it happen. All backers’ credit cards are charged when time expires.
A typical crowdfunding campaign features:
- A pitch video that is 2-4 minutes long that explains what the product or project is, why it matters, rewards or perks that are being offered, and a brief overview of the team or individual behind the initiative.
- Campaign text that dives deeper into the project and explains how the funds will be used, when rewards will be fulfilled, and why this project matters.
- Rewards or perks that can be accessed by individuals who back the project.
- A comments section where backers can provide feedback, ask questions, and interact with other backers.
- Updates that function as the project’s blog and story.
Campaign types:
- “all-or-nothing” (No funds are distributed if the goal amount was not reached by end of the campaign; people are typically more motivated and the backers prefer it because underfunded projects typically fail)
- “flexible” (Allowed to keep the amount raised even if the goal amount was not reached by end of the campaign period; generally higher fees).
- Looking for a way to mix it up and create a new format…
About “all or nothing” funding and it’s advantages:
- Creators are much more motivated to seeing their funding goal reached. If people want to see a project come to life, they’re going to spread the word.
- It’s less risk for everyone. If you need $5,000, it’s tough having $1,000 and a bunch of people expecting you to complete a $5,000 project.
- It works. According to Kickstart, of the projects that have reached 20% of their funding goal, 81% were successfully funded. Of the projects that have reached 60% of their funding goal, 98% were successfully funded. Projects either make their goal or find little support. There’s little in-between.
Payment Processing/Processing Fees:
For example, Kickstarter uses Amazon Payments as their 3rd party payments platform. If a campaign is successful, Kickstarter takes 5% from the total funds and Amazon Payments takes 3-5%. This means once a campaign is complete, creators receive only 90% – 94% of the total funds raised, so the Creator’s should be aware to set their fundraising goal accordingly. HatchFund.org, gives 100% of funds to the Creator.
For Backers:
- There is no guarantee that people who post projects on *OTGGoFund will deliver on their projects, use the money to implement their projects, or that the completed projects will meet backers’ expectations. *OTGGoFund should advise backers to use their own judgment on supporting a project. They should also warn project leaders that they could be liable for legal damages from backers for failure to deliver on promises. Projects might also fail even after a successful fundraising campaign when creators underestimate the total costs required or technical difficulties to be overcome.
- Creators across all categories are asked to describe the risks and challenges a project faces in producing it. This educates the public about the project goals and encourages contributions to the community.
- Backers should look for creators who share a clear plan for how their campaign will be completed, and who have a history of bringing their ventures and other projects to fruition. Creators are encouraged to share links and as much background information as possible so backers can make informed decisions about the campaign they support.
- If a creator has no demonstrable experience in doing something like their campaign or doesn’t share key information, backers should take that into consideration. Does the creator include links to any websites that show work related to the campaign, or past projects? Does the creator have a good track record? Etc. Don’t hesitate to request information from a creator.
Staff Mentor:
- Some crowdfunds provide dedicated staff mentor who works with campaign creator to create and market their campaign to ensure its success.
Other Concerns:
- Registration requirements: Certain states may require charitable nonprofits to register with the state BEFORE soliciting residents of that state; Not sure how that effects online campaign platforms; i.e. An online crowdfunding campaign for a nonprofit based in Texas, hosted through a platform based in California, and sending out campaign message to potential donors statewide.
Website-front-end:
- Easy to use, intuitive end-user graphics interface.
- Simple signup for Backers and Creators; registration, account-set-up,
- User dashboard/control-panel/Integrated campaign site editor
- Creator Profile Display
- Campaign Submission Form
- Resource links: Campaign advice and planning: tips, ideas, promotions, etc.
- Campaign analytics, tracking, emails
- Integrated ad campaign- Social media management
- Search categories and subcategories by type of campaign, location, amount, etc.
- Admin approval for submitted campaign
- Testimonials
- Backer Profiles
- Campaign rating-risk/success
- Local church and conference affiliation, support and feedback.
- Campaign Guidelines: Maximum Campaign Length, Creator/Project Eligibility: Allowed fund types, etc.
- Categories: Creators categorize their projects into categories and subcategories.
- Badge on the campaign page certifying that funds will go to a verified nonprofit organization.
- Etc.
Developing the platform-Scalable Architecture
White-label options/plugins
- Sample from WordPress: ignitiondeck ; demo
WordPress Themes for a Crowdfunding Platform
- Ignition Deck: Ignition Deck is a popular WordPress crowdfunding plugin and crowdfunding theme. Pricing ranges from $79-$349. Extensions include WePay, Amazon Payments, and MixPanel Analytics.
- Fundify: Fundify is a WordPress crowdfunding theme by the popular theme marketplace, ThemeForest. It costs $60, integrates with WePay and PayPal, and supports flexible and fixed fundraising options.
- FundingPress: FundingPress is another theme created by ThemeForest that you can use to create a crowdfunding platform. It costs $55 and has a bit of a different layout than Fundify.
- CrowdPress: CrowdPress is another WordPress crowdfunding theme on the ThemeForest marketplace. It costs $45 and uses PayPal as a payment method.
- Backer: Backer is the perfect theme to kickstart your own fundraising website! Built for the IgnitionDeck plugin suite, it offers all bells and whistles to help you raise money for your own cause in your own style! Highly creative, featuring a clean & minimalistic design and packed with a lot of useful features.
- Mission theme: This theme is good for donation based crowdfunding websites. It costs $45 and is more geared towards charities and nonprofits.
White-Label Crowdfunding Platforms
Open Source Crowdfunding Platforms
Catarse: Catarse is an open source crowdfunding platform that was created in Brazil.
Creating partnerships with existing organization-church and other nonprofit entities.
Connecting to existing networks or organizing Field Partners*
- *see how kiva.org does it
Payment solutions, payment gateways, etc (as an example).
- AdventistGiving: They provide payment gateway for Adventists to give online using their credit/debit cards or e-check.
Integrating third-party solutions.
Verification of Funds
Fund Disbursement
Website
- Designing the website
- Launching
- Promoting the website-integrating social media, connecting online community
- Site/content management(CMS)
- Tech support
- Customer relations.(CRM)
Attracting projects/campaigns and helping them reach their goals
Fraud Protection-Campaign Screening
Legal Advise/License/Fees
Tax considerations:
- Exchange of a tangible reward for a contribution is considered a taxable retail sale in some states.
Substantial Nexus” and “click-through nexus” -Not sure how this will apply to crowdfunding platforms.
For a state to have jurisdiction over an out-of-state seller, the seller must meet the state’s statutory requirements for “doing business” or being a “vendor” in the state, and the out-of-state seller’s activities must have a “substantial nexus” with the taxing state.
- “substantial nexus” for sales and use tax collection means that a seller has “physical presence” in the state, which requires more than a connection through the U.S. mail or common carrier within the state. Many project initiators may be individuals or small startups with a physical presence in one or a few states; however, they may be deemed to have substantial nexus in additional states through the crowdfunding moderator.
- “click-through nexus” provisions to expand their reach to certain out-of-state sellers. These provisions generally create presumptions of nexus if the out-of-state seller pays a commission to an in-state person who, through an internet link or otherwise, refers customers to the out-of-state seller, if the referral results in a sale and the seller’s annual sales from the referrals reach a certain dollar threshold. Since the crowdfunding moderator is receiving a fee for providing an internet link for contributors to make contributions, these click-through nexus provisions may create nexus for the project initiator if the moderator has substantial nexus in a click-through nexus state. – See more at: http://www.thetaxadviser.com/issues/2015/jun/tax-clinic-08.html#sthash.dmRBR8Eq.dpuf
More Info:
- IndieGoGo.com places badge on the campaign page certifying that funds will go to verified nonprofit organization; Their nonprofit campaigns are processed by FirstGiving: LEARN MORE
- Hatchfund.org, formerly known as USAproject.org, is a micro-philanthropy platform for artists; completely free for Artists-absolutely no fees; and all donations are tax deductible…..
- GiveForward.com’s Promo Video-using social media for your funding campaign…see below.