Live Chat!

Hi everyone! I’m thrilled to be here with Charles Best, Tim Ferriss, and Alexis Ohanian -- three titans in the crowdfunding world – to talk about raising money for good.

Tim Ferriss is an investor, entrepreneur, speaker, and author of three books, most notably 2007’s The 4-Hour Workweek. He’s written about “Hacking Kickstarter – How to Raise $100,000 in 10 Days” and is on the National Advisory Council of DonorsChoose, where he’s waged several creative funding initiatives, including dedicating his birthday to fundraising.

So….it’s safe to say that these guys know a thing or two about crowdfunding –what works, what doesn’t, and what’s particular about raising money for good. We’ve gotten a ton of great questions in from readers so far, and more are certainly on their way, so let’s jump right in and get started.

What Tim isn't mentioning is that, just as the trend lines were looking bad for me (he was about to start whupping me), he very charitably took a semester abroad in Japan.

Also, Tim and I had a wrestling coach, Mr. Buxton, who inspired me to be a teacher, which in turn inspired me to start DonorsChoose.org

Tim and Alexis, you have both been involved in various fundraising stunts with DonorsChoose, such as reddit’s “donation strike” in 2010, to help get Stephen Colbert to do a mock rally in D.C., and Tim’s Tweet to Beat campaign and birthday fundraisers. What are the most important elements in staging a successful crowdfunding campaign?

Look at the analytics of campaigns that have already surpassed their goal. Most people don't know they can do this on Kickstarter, and -- even if you're not on Kickstarter -- you can see where these campaigns got the majority of their traffic: which bloggers, which sites, which Twitter accounts, etc. It's a HUGE leg up.

First, I'll confirm the obstacle: only 20% of donors we acquire in a given year will give again in subsequent years. (Although that 20% tends to be the most generous donors, so we're retaining the right 20%.) I wish we were a subscription business! Now I'll get to some points about building community among donors...

One of the obstacles for any charity is that people often give once and scatter to the wind, and it’s hard to get them back into the fold. How do you build a lasting community among donors?

@JillBernstein: software is making this a lot easier. the next generation of nonprofits (I wrote about this in Without Their Permission - profiled DonorsChoose.org in fact because they're doing such a great job) are built on software that does the heavy lifting of relationship maintenance that people can't do. DonorsChoose, Charitywater, kiva, watsi -- what these nonprofits have in common is that they're lean and have tech in their DNA. Because of that, software builds that relationship and maintains it -- you make that donation/loan and software keeps you engaged because you're getting updates, you're getting thank you notes, you're getting ACCOUNTABILITY which has for so long been lacking in the nonprofit space (unless you donated big money)

I think there are a few ways (probably hundreds) to build a community of donors. The real question should be: How do you build a world-class community? In my case, it's done primarily through my blog, and I take extra steps to ensure that it's continually a positive place for people. Read up on the "broken window theory" for why I take these steps. Here is the paragraph(s) people read before they can comment on the blog:

Comment Rules: Remember what Fonzie was like? Cool. That’s how we’re gonna be — cool. Critical is fine, but if you’re rude, we’ll delete your stuff. Please do not put your URL in the comment text and please use your PERSONAL name or initials and not your business name, as the latter comes off like spam. Have fun and thanks for adding to the conversation! (Thanks to Brian Oberkirch for the inspiration)

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To have a community, you should have well defined codes of conduct. You do this by setting the expectations and enforcing them. Lax or strict, there are cultures on every web-based community out there.

(Here's the link to Small Empires on The Verge, by the way)

@SalarChagpar@Prepr...: Speaking from my experience as an advisor to a handful of start-ups (Uber, Evernote, Donorschoose.org, Vittana.org, etc.), I think one of the most important things is: As a founder, make SPECIFIC requests. Your advisors will distance themselves if your questions/requests reflect a lack of serious thinking on your part (e.g. "What should we do for PR?"). Instead, they should be more along the lines of:

"We've tried A, B, and C for PR for D and E reasons. Where do you think we could improve this?"
or
"We have an event (e.g. Fast Company Q&A) that we'd love for you to be a part of. It'll take roughly 60 min. Are there any dates that work in the next 3 weeks?"

Good advisors are almost always, by definition, busy. If you don't make things precise, they'll tend to put you on the back burner, in my experience.

Tim

Second, on advisors -- if you use their advice or connections, and good comes of it.... TELL THEM! I'm amazed how infrequently this is done. Part of the reason Charles has dedicated advisors and a great board is because he keeps them informed of progress in a regular way (perhaps quarterly or semi-annually), and thanks people personally when applicable. Advisors take time to advise those who use their advice, at least every once in a while.

Charles, I know YOU are ready for whatever comes your way when it comes to challenging the bureaucracy with your raw data about what teachers need. But are you worried that investors or advisers -- or donors -- might be uncomfortable with any controversy that arises? Is there risk here to the whole operation? How do you manage expectations?

You know, Jill, we've already fielded one phone call from a school district that effectively said, "if you're going to open up the data generated by our teachers' projects, and that data might reveal embarrassing deficiencies, then we're not so happy about our teachers using DonorsChoose.org." but I think this reaction will be few and far between, and i think that even in this district, they won't be able to put a halt to teachers using our site. A quarter million teachers at half of all the public schools in America have created projects, which is enough participation to be unstoppable, we hope. Also, Tim is very strong and he will protect us.