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When I recently read that in 48 hours Toronto college graduate Max Sidorov used Indiegogo to raise more than $625,000 to send tormented school bus monitor Karen Klein on a vacation, I decided it was time to find out more about this crowdfunding phenomena.
Several months ago I wrote about how Toronto authors S. Bear Bergman and Cory Silverberg successfully raised enough money to publish their children’s books using the crowdfunding site Kickstarters. At the time, one reader suggested that Indiegogo is a much more flexible option, particularly for Canadians.
It turns out he’s right. For one thing, Kickstarters requires that participants have a U.S. bank account and a major U.S. credit card. In contrast, Indiegogo is available worldwide. The only caveat is that all transactions are conducted in U.S. dollars. Furthermore, unlike Kickstarters which limits fundraising to creative projects like art, comics, gaming, theatre and writing, you can raise money on Indiegogo for just about anything, including community, health-related, environmental and political projects.
In fact, in one recent project Courtney B.C. resident Shawn Wood more than doubled his initial goal of $5,000 to finance a dream wedding for his fiancé Emily Niinmets who has terminal lymphoma. And even celebrities are getting in on the act. Half way through a six week campaign, author Margaret Atwood raised over $54,000 of her $85,000 target to develop an online event space where artists and performers can connect with fans and aficionados called Fanado.
You can opt for one of two funding models.
- With flexible funding, you pay 4 per cent to Indigogo if you reach your target amount, or nine per cent if you do not. This encourages people to set reasonable goals and promote their campaigns through other forms of social media.
- A fixed funding option also costs four per cent if you reach your objective, but if you do not, you receive nothing and your contributors are refunded.
Currency exchange fees may also apply and there is a three per cent fee for credit card processing plus a $25 wire fee for non-U.S. campaigns.
Your campaign is built online using the Indiegogo platform and will typically include one or more videos and text. One-click social media integration, direct email and announcement features are designed to help spread the word, raise awareness and increase funding. Indiegogo also uses an algorithm they call the “gogofactor” to select the most active campaigns that are featured on its homepage.
The most successful campaigns are proactive, have a good pitch and find an audience that cares, Indiegogo spokesperson Rose Levy says. “The campaigns with the greatest challenges are those where participants think all they have to do is post their story and the money will pour in.”
Ninety-three per cent of successful campaigns offer donors incentives for contributing. For example, Toronto-based Matthew Ogelsby’s drive to raise $10,000 to expand his comic book series, “Romantically Apocalyptic Books of Captein” generated $28,500, with 28 days to go. For a $10 donation, contributors will get pdfs of two previous books. CDs, greeting cards and an autographed print are added to the package for larger donations.
A research report released earlier this year by industry publication The Daily Crowdsource says crowdfunding has gone from a $32 million market to a $123 million market in the past two years.
How did the Karen Klein project raise such a remarkable amount of money in 48 hours? “I think that the simplicity and the collective call to action was a big part of this,”Indiegogo co-founder Slava Rubin told the Los Angeles Times “It was people coming together to right a wrong … everyone felt they wanted to be part of the response.”
You can read more about other Canadian projects on Indiegogo here