By Mitra Sorrells Posted February 5, 2013, 7:30 AM EST
With more than $400 million raised to fund nearly 85,000 projects since 2009, Kickstarter has demonstrated that crowdfunding is here to stay. Kickstarter is focused on funding creative endeavors such as films, games, music, and technology, but its success has spurred the development of hundreds of other services using the same model: invite people to pledge money toward a potential project with a specific funding goal and deadline. If the goals are met, the project moves ahead, and those who have made pledges are automatically charged.
The concept is ideally suited for events by providing a mechanism for hosts to eliminate—or at least reduce—financial risk. In the past year, several sites have launched that apply the crowdfunding concept to events, including CrowdTilt and EventStir. Online registration and ticketing system Picatic added a crowdfunding mechanism in September, and FundRazr, a crowdfunding site that has been around since 2010, added functions tailored to event funding.
Hosts are using these services in one of two ways: either to gauge interest in a new event before planning (and spending) begins or to motivate people to purchase tickets early for an existing event. Last fall, Junior Achievement of Saskatchewan used Picatic’s crowdfunding option to sell tables for a December fund-raising luncheon. The organization had increased the per-table price by 50 percent from the prior year, going from $200 to $300, and wanted to get an early indication of whether that would affect sales. “The luncheon had sold out every year for the five previous, but about 80 percent of the sales had come in the last two weeks. So we used it to spur sales sooner rather than sitting and wondering how many tickets would sell,” said Cody Barnett, the organization’s director of development and community relations. Barnett created a listing on Picatic that offered 15 of the event’s 45 tables at a 10 percent discount—$270—for those who bought within two weeks. The tables sold in six days. Barnett then shared that success in emails and newsletters to let potential attendees know that only 30 tables remained. “It definitely increased the speed in which people bought,“ he said. “In past years we would sell out about two days prior to the luncheon, but this year we sold out a week and a half out.”
Maryam Ufyani, executive director of Afghan Education for a Better Tomorrow, had similar success using EventStir for the organization’s “Afghan Arts and Culture Festival” in October. In past years all tickets were sold at the door for $15 each. This time the group created an EventStir listing three weeks before the festival, offering tickets at a discounted price of $10. “We had a goal of $2,000 in sales, and we met that ahead of time, about a week before the event. This helped tremendously to get a sense of how many people would show up and to have some funding in place before the event,” Ufyani said.
All of these platforms have social media options, so buyers can share their purchases with others through email, Facebook, Twitter, and other networks. FundRazr can also run as a tab on a Facebook business page, so sharing takes place every time a comment or contribution is made. It’s free to create an entry on any of these sites, but each one charges fees ranging from 2 1/2 to 5 percent for each ticket sold and in some cases an additional credit card processing fee.