In late July through August, the Australia Council for the Arts, led by its philanthropic arm Artsupport

Australia, hit the road on a nine-location roadshow about crowdfunding. The video and slides are available from australiacouncil.gov.au/crowdfunding. Our slides rely heavily on pictures and limited text, so these notes will help you make sense of them. WHY ARE WE DOING THIS? SLIDE 2: Our interest in crowdfunding as a funding opportunity came about with launch of Pozible (formerly FundBreak) in 2010. There was a rise in interest from the cultural sector but many projects were launching without a clear plan for success. We identified a need to address a lack of confidence and competence in the cultural sector if the significance of crowdfunding to arts and cultural projects was to be realised. To be clear, the Australia Councils interest in this area is not about cuts to government funding. We have invested time and effort into this space because we see it as a new model of support which is dynamic and responsive. Supporting other opportunities to fund arts and cultural projects helps us deliver on our mission: enriching the lives of Australians and their communities through support for the creation and enjoyment of Australian arts. This is why crowdfunding is within the scope of one of our 2011-12 strategic priorities: Diversified models of support. AUSTRALIA COUNCILS CROWDFUNDING STRATEGY SLIDES 3 10: The Australia Council/Artsupport Australia developed a national crowdfunding strategy that involved four phases: Phase 1 Internal skilling-up and knowledge sharing: The Australia Council engaged global experts to expand our knowledge and understanding of crowdfunding. During this phase the Artsupport Australia team and the Digital Content Officer under took training to learn best practice in crowdfunding for cultural and creative projects 2. Phase 2 Pilot mentoring phase: Following this skilling-up, the Artsupport Australia team embarked on pilot mentoring program with # clients across every state and territory, supporting them through the entire crowdfunding process. The crowdfunding campaigns run by the clients had a 100% success rate. 3. Phase 3 Research: The Australia Council commissioned Queensland University of Technologys Creative Industries Faculty to undertake a research project investigating some of the barriers and motivations in crowdfunding in Australia which were identified as being areas lacking in data. The research is available at australiacouncil.gov.au/crowdfunding 4. Phase 4 Capacity building: The final phase was designed to spread the knowledge we had gained during the earlier phases to the widest audience we could. To do this, the Caroline Vu, NSW Manager, Artsupport Australia and Elliott Bledsoe, Digital Content Officer, delivered a nine-city roadshow in each capital city and Western Sydney. Each roadshow involved a 45 minute presentation by Caroline and Elliott about the theory and then a presentation by a local group or individual who had run a crowdfunding campaign. These notes form part of the resources published at the conclusion of the roadshow.
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Mentoring in crowdfunding for artists and arts organisations now forms part of Artsupport Australias offering in the mentoring component of its core business. THE CONCEPT OF CROWDFUNDING SLIDES 11 13: Put simply, crowdfunding is about raising money from the crowd. People running projects seek (often) small financial contributions to be paid when the projects financial goal is reached from numerous people in their networks; diversifying the investment base in the project while simultaneously expanding awareness of and loyalty to the project. There are hundreds of crowdfunding platforms on the internet through which anyone can seek support for a project. The usual make-up of a campaign to raise funds includes a description of the project goals (eg, to make a film), crowdfunding target (eg $10,000), and deadline for raising the funds (eg within 40 days). Members of the crowd can pledge their support for the project. Typically targets are reached through many small pledges contributing to the large target. SLIDE 14: The most common crowdfunding model is all or nothing. If a project reaches the target by the deadline, pledges are processed and the creator gets the funds. So if the project doesnt make its target, none of the pledges are processed and the creator gets nothing. There are variations on this theme, discussed later. SLIDES 15 16: In 2011, over $1.5 billion was pledged globally to crowdfunding platforms, three times the amount pledged in 2009. The figures demonstrate a growing legitimacy of crowdfunding as an alternative funding mechanism. SLIDES 17 22: There are hundreds of crowdfunding platforms but we wanted to feature a handful which we see being commonly used by the cultural sector. They are discussed in more detail later. CROWDFUNDINGS POINT OF DIFFERENCE SLIDES 23 26: Why would you run a crowdfunding campaign rather than any other type of fundraising campaign? The phenomenon of social media (illustrated by Mark Zuckerberg, founder of Facebook): the advent of social media brought the ability to share information and spread messages in a way previously impossible. It also made peoples networks and connectedness to other networks visible. This created the perfect storm for crowdfunding. 2. Leveraging (social) networks: Crowdfunding is the next level up, or the monetisation, of the ability to click a Like button on Facebook and express endorsement for something. 3. Potential for growth: crowdfunding provides opportunities to reach brand new supporters. If the artist or arts organisation manages those relationships well, they can grow into longterm relationships of support. The other aspect of growth is about crowdfundings potential to grow the culture of giving in Australia to arts and culture in new markets. As there are differences to the traditional fundraising mechanisms, it is already attracting donors or supporters who have never supported arts and culture before.
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SLIDES 27 37: Summary of the commissioned research prepared by Queensland University of Technologys Creative Industries Faculty is available here.

SLIDES 38 51: This section contains practical tips for artists or arts organisations intending to run a crowdfunding campaign. There are two case studies used throughout to illustrate the theory. CASE STUDY 1: Amanda Palmer Amanda Palmer is a musician, formerly of the Dresden Dolls, who had recorded some tracks in early 2012. She launched a Kickstarter campaign to raise funds to turn the tracks into an album, produce an associated art book and take the album on tour (including staging a number of art exhibitions and gigs). CASE STUDY 2: Emerging Writers Festival The Emerging Writers Festival is a not for profit organisation which promotes the interest of emerging writers. They wanted to expand the reach of their annual festival beyond Sydney and Melbourne and so launched a Pozible campaign to fund a mini-conference in Brisbane. STAGE 1 THE PLAN SLIDES 52 53: Its critical to have a plan some crowdfunding campaigns appear to have no plan for success and rely on the internet doing the work. THE PROJECT BUDGET SLIDES 54 57: In addition to factoring in all usual project costs, make sure you factor in the cost of platform fees (the platforms take a percentage of whats raised) and currency conversion fees if you are using an international platform. The cost of creating and delivering rewards is often forgotten but can be substantial. SLIDES 58 63: Once youve determined your entire project budget, you need to determine whether its possible or desirable to raise the full amount through crowdfunding. The target is important because if you are using a platform which uses the all or nothing model, you need to raise at least the target in order to get any of the money. For example: You may be looking to raise $50,000 for a film, but upon examining the size of your networks, it may be that you can only realistically raise $10,000 through crowdfunding. You may need to raise the remaining $40,000 through seeking a number of large gifts from a small number of people (major gifts campaign) or another fundraising avenue. There are two formulas you can use to calculate a rough crowdfunding target. They are guides only. Formula 1: aggregate all your networks (eg friends on Facebook, followers on twitter, email contacts etc), takie 10% of that number and multiply by $50 (average pledge to crowdfunding) for a ballpark figure about what you could raise through crowdfunding. There is a worked example using Carolines networks at the time of the roadshow. Formula 2: this reverses the first to determine what you would need (on average) each person to pledge to reach your target. In the worked example, the average pledge that Caroline needs per person is higher than the average pledge (used in the previous formula). So Caroline would need to

create a strategy which increases the percentage of the database who pledge to the project, and/or which increases the average pledge to the project. THE TIMEFRAME SLIDES 65 68: This is also important because of the all or nothing model (ie, meeting the target by the deadline). There is often a perception that a longer campaign enables you to raise more money. In our experience, this is a misconception. Its common for crowdfunding campaigns to generate a lot of activity in the week they launch, and then in the last week of the campaign, with often a plateau in activity in between. So the risks with longer campaigns can be a longer plateau period, and a longer period you need to work on it and sustain momentum and interest. We know that in reality, sometimes you dont have the luxury of choosing your timeframe. But if you can choose your timeframe, give yourself enough time to spread the word to your network depending on the size of your network, give yourself between 2 - 4 weeks - and then give yourself a buffer (say, 2 weeks). This equates to between 40 - 50 days. Indiegogo recently published an insight backing this up (Indiegogo insights analyse data from every campaign which has been run through the platform): campaigns which run for less than 40 days have more success of making their target. SLIDES 69 78: CASE STUDY 1: Amanda Palmer Amanda wanted to raise $100,000 for her project. So she gave herself a slightly longer timeframe (60 days). During that time, there were almost 25,000 pledges to her project and she raised almost $1.2 million. CASE STUDY 2: Emerging Writers Festival EWF aimed to raise $4,000. The Festival was contingent on them raising that money (that is, the Festival would not proceed if they didnt raise the money) so they needed to know quite quickly. So they set a timeframe of 21 days. During that time, they raised over $4,000 from 100 people. FACTORS WHEN CHOOSING A PLATFORM SLIDES 79 84: This section outlines some factors to consider when choosing a platform. We decided to include this section because despite there being many crowdfunding information sessions, none of them provided this type of information. We think its important to be able to make informed choices, so this is not about recommending a platform. 1. Crowdfunding model. Most platforms use the all or nothing model. Indiegogo and Sponsume also have flexible funding, which means you can keep whatever money you raise, even if you dont make the target by the deadline, but they take a higher percentage of the total raised. Start Some Good uses a tipping point model which allows you to set a hard target (bare minimum you need to get the venture off the ground) and a soft target (what youd really like). Pledges begin to be processed once the project reaches the hard target. 2. Type of projects allowed on the platform. Pozible is largely creative projects, Start Some Good is exclusive to social enterprises. Indiegogo and Sponsume are open to anyone - which means your project may be sitting alongside a plea from a bus driver for support for her vacation. So even though there are benefits of exposure to such a large audience, the YouTube effect may mean that

projects can get lost in the crowd. Kickstarter has the most stringent requirements from an Australian creators perspective as it requires the creator to have a US bank account or credit card. 3. Cost of using the platform. That is, what the platforms take as a percentage of funds you raise. Make sure you check each platforms website for their current fees. Platforms like Indiegogo and Sponsume which use flexible funding tend to have one fee if you make the target, and a higher fee if you dont make the target. The platforms sometimes (like Pozible) have a discounted rate for project creators who have been introduced by a previous creator or a partner organisation. 4. Method of payment. This is relevant because not all platforms have the same methods of payment available, and different methods of payment attract different levels of fees. As an example, PayPal takes a processing fee of 2% (separately from what the platform takes), credit cards a different rate etc. Another factor is that different methods of payment require different levels of registration from the user - eg - you need to first set up a PayPal account in order to transact through PayPal, whereas you just need credit card details to process a credit card payment. All of this plays into the overall user experience for your pledger / supporter. 5. Currency. Again, its important to factor this into the total amount of your target as not all platforms transact in Australian dollars. REWARDS SLIDE 85: Rewards are one of the key points of difference between crowdfunding and other types of fundraising. You can offer your pledgers a reward or perk in return for their promise of support for your campaign. This differs from traditional fundraising. Usually if a supporter makes a donation over $2 to eligible charities, they can receive a tax deduction for that donation, but must not receive any tangible benefit from the charity. Tangible benefit has been said to include free tickets, magazine subscriptions etc before. So being able to offer tangible benefits to supporters under crowdfunding radically alters the act of asking and of support. There are now at least two camps of potential supporters in the crowd: Camp 1: those who will support your project for the joy of it - without expecting anything in return. We know this still makes up a large number of supporters of crowdfunding projects, because Pozible tells us that many supporters do not claim their rewards at the time of pledging (in fact, not claiming a reward is Pozibles default option). Camp 2: The newer and very real second group are those who want to support your project but want something back for their support. The commissioned research showed that rewards are a key motivator for some people. A reward could be anything from a metaphorical high five, but is much more powerful when it is something exclusive. For example: a piece of exclusive merchandise (similar to the exclusivity of a tshirt bought at a concert), access to merchandise / cultural product before the rest of the public (eg being able to download a track before its officially launched), or an exclusive, once-in-a-lifetime experience (eg private audience with the artist).

To maximise the potential of crowdfunding, you need to take account of both camps when designing your campaign and reward structure. A thoughtful reward can be the tipping point for someones support, and could entice someone to give more to your project than they had originally set out to. SLIDES 86 88: You should design your reward offerings with your audience in mind. Think about what may have attracted them to you and the project, and then you can capture that in the types of rewards you offer. Wed recommend against simply copying another projects reward structure. It should be about deepening the supporters experience of and connection to the project and to you. For example, the band worldfly offered people who pledged $100 a cello lesson with the cellist in the band. Similarly, the script writer on the crowdfunded film Unrequited promised a script writing masterclass with anyone who pledged $1,000 to the campaign. That said, the rewards you are offering must be realistic, in terms of your ability to deliver them and the cost of delivery. For example, given how time consuming the script writing masterclass would be, it wasnt realistic for the script writer to offer a class to everyone who contributed $20. So making it a $1,000 reward had the dual benefit of ensuring the script writer wasnt spending the next five months giving masterclasses, and also making it a scarce commodity, and so something to be sought after. Finally, the rewards should be creative! Work out what makes people tick and give them something to brighten their day as well as strengthening the bond between you and the supporter. SLIDES 89 105: CASE STUDY 1: Amanda Palmer Amanda had a big target so needed to have a lot of options. They started from as low as $1 for a digital download of the album, progressing to more traditional forms of delivery (CD, vinyl) at the next levels. The higher the contribution, the more scarce and exclusive the reward for example, $300 got you a ticket to an exclusive gig, $500 - $1,000 got you personal gifts from Amanda (eg, limited edition artbook from the album artworks, or she would draw a portrait of someone or something nominated by you with a Sharpie pen, for $5,000, she would play at your house party and for $10,000 you could have a private dinner with Amanda. CASE STUDY 2: Emerging Writers Festival With a smaller target, EWF had fewer options. They started at a low level ($5 would get you kudos). As the point of this campaign was to gauge whether there was enough interest to run an event in Brisbane, the rewards included a pre-purchase ticket ($45) to the event. They could then decide whether to go ahead with it. Again, offerings at higher levels ($50 - $80) were personal gifts (eg a Lego poem created by one of the artists in the Festival) and the exclusive artist party for $150. SLIDES 106 107: You should think carefully about how to space your reward levels, as they can entice people to give more than perhaps they originally intended. You may be doing yourself a disservice if you give people too many options (eg $10, $20, $30, $40 etc). By giving people fewer choices, its less for them to sift through. Also, if you have attractive rewards, people may actually pay extra (ie more than they set out to give you) for them.

Finally on rewards, data from the platforms can provide some guidance about what levels you should have. For example, a recent Indiegogo insight found that $25 rewards are the most claimed reward, and that the $100 rewards make the most amount of money. Pozible say that between $700 - $900 are the most common contributions when it comes to large contributions. STAGE 2 THE ASK SLIDES 108- 111: This section is about how you put together your ask ie explain to people what it is you want to do and why they should support it. The ask should outline who you are, what you want to do and why. Why should people should support you specifically? Why this project what is so amazing about it? Why is the project is going to work? This goes back to the need for you (identified in the research) to demonstrate to potential supporters that you can actually deliver what you say you will. Remember you are competing with literally millions of other causes and messages on the internet competing for your potential supporters attention. A compelling and genuine story will cut through the noise and grab their attention. WHAT ARE YOU RAISING MONEY FOR? SLIDES 112 114: When defining your project, aim for something specific (like making a film, recording an album, staging a theatre production, putting on an exhibition etc), rather than a call for general support (like keeping the lights on - GiveNow etc may be better forums for that type of ask). The exception to this would be where there is a crisis. Generally though, we think it is better that crowdfunding campaigns present potential pledgers with a tangible journey and outcome. For example, Sydney independent publisher New Matilda found itself in a situation where it needed to raise $175,000 urgently in order to continue trading. The urgency of the ask (combined with the base of support of the organisation) was so compelling that they were successful. You need to decide whether this will just be the first stage of a number of crowdfunding campaigns you want to run. Think about whether you can break the project down into stages. For example, if you are making a film, you might run three campaigns the first for the filming costs, the second for the post-production costs and the final for marketing and distribution. SLIDE 115: Make sure that your ask is broad enough to appeal to people outside of your immediate network. There is always the potential for things to become viral, as this Indiegogo project demonstrated, but the ask needs to be able to catch on by your networks sharing it with their networks, their networks sharing it with their networks and so on. THE CAMPAIGN VIDEO SLIDE 116 118: It is essential to have a campaign video. Potential pledgers need to be able to connect with you and your message. We all know how easy it is to gloss over text, so what better way to create a connection by showing them who you are and conveying your passion and commitment through a video. Indiegogo claim that projects on their platform which had a video made more money than projects that didnt. This is like your elevator pitch so make it short and snappy 3 minutes max. The Indiegogo stats seem to back this up. Make it genuine people will connect with you if you are authentic and can

see you need their help to realise your vision. And have people in it if youre in a band, have the band members, or the crew on a film set. Its about creating more points for people to connect to. DO YOUR RESEARCH SLIDE 119: Finally before you launch the campaign do your research on the platforms themselves. Most platforms keep a comprehensive archive of past projects (unsuccessful and successful) and are generally indexed by artform amongst other categories. Looking through past projects can give you a good sense of what works and what doesnt. We recommend making a pledge to a crowdfunding project. Youll see your potential pledgers experience of using the website. You will probably be the first point of contact to troubleshoot any issues which may come up for your pledgers, so you need to know what youre talking about. STAGE 3 THE SPREAD (SPREADING THE WORD) SLIDES 120 124: Spreading the word is really the key to crowdfunding success. Remember that social media presents you with the ability for you to share your message with people you wouldnt ordinarily be able to reach. In order to reach those people, you need to first reach your immediate network, so they can then spread the word to their networks and so on.So the first thing to do is to get your immediate network on board! You will need to reach out to all your contacts to compile a list of people to contact. Pozible says that personal emails are one of the most effective ways of gathering support for your campaign. So once you have your list of your immediate network, we recommend emailing them to explain what you are doing outline what your project is, why youre seeking support, why youre seeking it through crowdfunding, a short description of how crowdfunding works and so on. We recommend doing this before you launch your campaign. The reason for this is that Indiegogo says (presentation in Sydney in March 2012) that before a stranger (that is, someone who doesnt know you directly) will support your campaign, they generally want to see that the project has achieved at least 25% of its overall crowdfunding target. Basically, they want to have some confidence that the project has some chance of succeeding before they contribute. So the purpose of emailing your network before the campaign launches is to not only to tell them about the campaign, but also to tell them when it will launch. You can ask them to donate as soon as it launches, rather than waiting. Hopefully at least some of them will do so, which means that by the time they forward it to their networks, there will already be some pledges, giving those people one step removed from you some confidence about the campaigns success. YOUR SOCIAL MEDIA STRATEGY SLIDES 125 126: Social media plays a key role in many successful campaigns. You should plan out how you to speak to your different audiences as the social media audience is not homogenous (so use different networks in different ways to get your message across). Your email contacts and Facebook friends are likely to be networks of people you know directly. So you can afford to be a bit more personal in your ask to these networks. Facebook is the most common way that people find out about crowdfunding campaigns.

The connection to you and your audiences through Twitter and the blogosphere are likely to be more abstracted that those in your email contacts or on Facebook, and so this is where the potential lies. If you can gain traction with communities which share your same niche interest, you can tap into networks and people you may never have had access to. So think about influential bloggers and people with large Twitter followings and try to find a hook to get them to promote your campaign. CAMPAIGN DYNAMICS AND UPDATES SLIDES 127 133: What we usually see is a lot of activity in the first week after the campaign is launched, not much in the middle, and (hopefully) a lot of activity in the last week. Weve seen campaigns where more than 50% of a target has been raised in the last 48 hours of a campaign a deadline can be a very motivating force. So you need to plan for the plateau. The middle period tends to be the time when people get panicked about the inactivity, and start doubting themselves and their supporters. Having a strategy to keep up the momentum during the plateau can help you avoid feeling stressed, as well as boost your chances of success. For example, you could hold an actual, face to face fundraising event. Updates are a key way of sustaining momentum, and one of the most underutilised features of crowdfunding platforms. Most of the platforms will have a template for updates which you can populate and then share with your supporters and the general public. The aim of updates is to keep people engaged, remind them of your campaign and your project, and for those who have already pledged, sharing the sense of achievement with them as the campaign progresses. The trick though is updating people enough so you stay on their mind, without annoying people. Theres no formula for how to strike this balance (although the Indiegogo insight on slide 133 is a good guide) its more about being self aware to find that sweet spot of online engagement. Here are some tips about using updates: 1. Use multimedia in your updates: people engage more with posts containing multimedia (video, photos, music etc) than those with just text. It also heightens the personal connection between you and the (potential) pledgers, and the sense of them being on the journey with you. 2. Your updates dont always have to be about the campaign or the money : This goes back to the balance between keeping people in the loop and annoying them. You could have a picture of the set if youre shooting a film, or a video of part of a recording session. One of our pilot projects dedicated YouTube clips to their pledgers. 3. Avoid begging: Its a turn off. Stay calm, professional and strategic. And back yourself! YOUR CAMPAIGN TEAM SLIDES 134 136: You should have people other than just you on your campaign team for a couple of reasons. It can be exhausting if its just you. Just as importantly though, if you have more people helping you spread the word, you will reach more networks. It doesnt matter if youre an individual artist you dont need to be part of a collective or a band for this to be true its about assembling a group of people (however big or small) to help you get the word out about your campaign. It could be as simple as having your best friends, family and a few artistic collaborators to help you drive it.

You should also think about who you can bring on board as ambassadors. For example, we talked earlier about using influential bloggers and people with significant Twitter followings to champion your cause. One project creator, Fee Plumley, reached out to Hugh Jackman in the last days of her campaign. He obliged and retweeted her plea for help, which resulted in her campaign site crashing temporarily because of the enormous spike in interest. Be creative when thinking about ambassadors. It doesnt have to be Hugh Jackman as long as they have credibility and access to the audiences you want to reach. GETTING YOUR PROJECT TO TREND SLIDE 137: The real possibility in crowdfunding is when campaigns go viral. It is also in the platforms interests to have buzz around campaigns. The GoGo Factor refers to the way the platform (in this case Indiegogo - but this principle applies to most platforms) measures the amount of activity on a certain campaign (for example, click throughs from posts and emails, mentions etc). What this means is that platforms can identify projects which are creating a buzz. Many of them have a section on their website (featured or popular projects). If you can generate enough buzz to get your project into this section, you will be exposed to a far greater network of potential supporters. The way Facebook measures popularity of posts is called Edge Rank. You may have noticed that not all posts get selected for the News Feed that comes up when you log in. The more your posts are liked, commented on or shared, the higher the Edge Rank and the more likely Facebook selects your posts to be included in your friends News Feeds, and so the more likely it is your posts will be seen. TIPS FOR GETTING FUNDED IN THE LAST FEW DAYS SLIDE 138: 1. Thank people: singling people out for thanks in a public way rather than just generic thanks to all for support can be very powerful, because of that motivator identified in our research: social kudos. As well as making people feel special, it can also encourage others to give who may have been on the edge. Its wonderful what the suggestion of five minutes of glory can do! 2. Tell people what their support means: explaining to people what you will be able to do with their money has at least two positive effects. Its about increasing transparency but also it helps to create a collective sense of progress. For example, Caroline, Elliott and Michelle have helped us get to the $2,000 mark which means that, if we make our target, we will have enough to pay the film crew. Your support means that were halfway there to making our dream a reality! 3. Count it down: in the last few days, you need to keep reminding people that time is running out (for example, 3 days left to raise $1,000). WHEN YOU MAKE IT! SLIDES 139 144: Make sure you celebrate! You are responsible for creating the collective sense of achievement and thanking people is a great way to do that. But thanking people in a meaningful way, that communicates that you understand why they supported you. When Amanda Palmer hit the $1 million mark, she posted this photo. This wasnt about being gratuitous or controversial, it was about her speaking to her supporters love of burlesque and acknowledging their support.

If you promised people rewards and they elected to take them, make sure you honour that promise. Remember this is supposed to be the beginning of a long term relationship of support. If you made new supporters during the campaign, make sure you take the time to find out who they are, why they were attracted to the campaign, thank them and begin to build that relationship with them. For us, this is really the end game and you dont want to miss out on the potential of someone who pledged money to you out of the blue. IF YOU DONT MAKE IT SLIDES 145 146: If you dont make it, you need to keep talking to people. We have seen too often projects which just fall short, and the project creators go into hiding for fear of shame and embarrassment. Its important not to become resentful of your potential pledgers and especially not your artistic collaborators. It is entirely possible for you to remount the campaign at a later stage when youve done the post-mortem and re-grouped, but only if you manage the relationships and the failure well.