Crowdfunding In Plain English

On this episode of Bloomerang TV, Brady Josephson of Chimp and recharity.ca joins us to define crowdfunding in plain english and offer some tips on how to get started. You can watch the full episode here:

Full Transcript:

Steven: Hey there. Welcome to this week’s episode of Bloomerang TV. Thanks for tuning in. I’m super excited today. I’ve got my pal Brady Josephson. He’s joining us from our beautiful neighbor to the north, Canada. Hey there, Brady. How’s it going?

Brady: Hey, I’m good. Thanks for having me.

Steven: Brady, man, you’re all over the place. You write for Huffington Post. You write for HubSpot. You’ve got your own consultancy. You work for a really cool technology company. If you cannot take up a half hour talking about all the stuff you do, let people know who you are and what you’re up to these days.

Brady: Yeah. Thanks. It’s increasingly hard to define. I’m a charity guy. I’m trying to find solutions that can kind of grow the charitable pie. That’s been a journey from working for a charity and then working for technology companies and doing some consulting kind of on the side. I also teach at North Park University in Chicago. So, today I spend most of my days trying to build partnerships with charities and organizations to raise more funds in North America.

Steven: Very cool. Tell us about Chimp because this is a really unique sort of crowdfunding platform, technology company. What does Chimp do? What are you guys up to there?

Brady: Yeah. That could be its own session. At its root, Chimp is a democratized owner advised fund. So, anyone in Canada, we’re just in Canada right now, but anyone in Canada can have their own fund where they can give into an account and send it out to any registered charity at any point. But what we’ve built on top of that are different tools.

So, there are fundraising tools, personal fundraising tools and they look similar to crowdfunding pages or peer fundraising pages. But because we use the donor advised fund, people can use their page over and over for different causes. They can give to different campaigns. They can get matched by their employers.

So, it’s slowly evolving into more of an ecosystem where you can kind of do all of your charitable giving and all of your charitable impact in one place, which is kind of unique if we can succeed.

Steven: Yeah. It’s really unique. I don’t think anyone else is doing anything like it. If I’m characterizing or describing this incorrectly, tell me, but you can gift funds from your fund to another person and that person can give it to the charity of their choice. Did I describe that correctly?

Brady: That’s absolutely correct. Yeah. I gave you a gift, I think.

Steven: Yeah.

Brady: We’ll send it to any charity. It’s called our peer-to-peer gift. So, we’ve built some tools where companies use that. So, instead of giving their customers a crappy bottle of wine at the end of the year, they can give them a charitable donation of $25, $50, whatever. And then those people can give to a charity they care about. We’re recently working on some point of sale devices. So, instead of you make a purchase and now the company will make a donation in your honor to their charity, we’re saying, “Whoa, it’s your money. Why don’t they give you money and you give it to the cause that you care about.”

Steven: Right.

Brady: Again, it’s all possible on the donor advised model. We’re trying to build some cooler accessible things on top of it.

Steven: Yeah. It’s really neat. I really enjoyed receiving the gift. No one had ever given that to me, obviously, before but it was super fun thinking about a Canadian charity that I wanted to give it to and sending it out. Yeah, a really neat technology, check that out just as an aside.

But what I really want to talk to you about is crowdfunding and peer-to-peer. There are all these sort of, I don’t like to say buzzwords, but it kind of is a buzzword these days. Can you kind of cut through the noise and just really define in plain English what is crowdfunding? What is peer-to-peer? There are a lot of folks out there that still don’t know what that is and definitely aren’t taking advantage of it.

Brady: Yeah. I’ll try. For me, the definition on crowdfunding is just people rallying and networking their funds together to fund a project or a person. What’s funny about that is that’s basically just fundraising.

Steven: Yeah.

Brady: It’s not that different. When I talk, I often lead with the story about the founding of Harvard University, which is essentially and old school crowdfunding story. We’ve been literally crowdfunding things in the charitable sector for hundreds of years. But because our for-profit brethren are now using crowdfunding to fund things like arts and films and increasingly technology and companies, now it is this kind of buzzword. The charitable sector is saying, “What is this and how do we do it?” The irony is, again, we’ve been doing this longer than anyone.

Steven: Right.

Brady: I try to talk about social fundraising, which encompasses both crowdfunding, which is more project-based and specific. It’s often driven by an organization, “We’re raising $50,000 for an orphanage in Uganda or something.” It’s very specific, very tangible and project-based that people can then give to or potentially fundraise for. And then there’s peer fundraising, which is either the older kind of traditional model where it’s event-based–walkathon, bikeathon, “Support me in this race,” that’s kind of common.

Now there’s newer offshoot that’s kind of the Charity Water-ish model where people are giving up their birthdays or doing their own fundraisers on their own or ALS Ice Bucket Challenge would be kind of in that non-event-based fundraising. So, to me, that’s kind of peer kind of project. But in reality, they’re increasingly overlapping, which makes it really hard to define.

Steven: So, that’s how you would draw the distinction? I feel like some people use peer-to-peer and crowdfunding sort of interchangeably. But it sounds like that’s not really correct. Is that fair to say?

Brady: Correct. That’s my own definition. That’s one of the ways that we have kind of tried to define things. If you don’t define it, now we’re talking about–peer-to-peer strategy and crowdfunding strategy have huge overlap, but they are a bit different in my opinion. One you’re purposefully going to people to fundraise on your behalf and the other one you’re purposefully trying to create this really ripe giving opportunity.

So, on one the ask is a donation and the other one is to fundraise. So, they’re similar–raising funds from the crowd, grassroots focused, story, social, etc. But for me and for us, we try to make a little delineation just to try and provide some clarity to the conversation. But I’ve seen them interchanged a lot.

Steven: I tend to agree with you. I don’t really think they are interchangeable. I think that distinction is really helpful and definitely correct. It’s interesting. You say how nonprofits, people have been fundraising this way forever. But now it seems like in the last two, five, ten years even, we have this like technological renaissance that is really enabled it on a larger scale. Can you kind of talk about that and how that sort of changed the game for people?

Brady: Yeah. So, I think the technology and social media has really just democratized information, the ability to create information and access information. I think in fundraising, that’s done two main things. One, you can find and access charities way easier now than you ever could before.

It used to be a very, very, very ask-driven industry where a charity that has a lot of money and a lot of lists and emails and whatever could find you and ask and that’s how you find out about them. But increasingly, you can go on GuideStar and Charity Navigator and in Canada, Chimp. Every registered charity has a profile page with some information on them.

Steven: Cool.

Brady: So, you can find them and actually give to them without them even knowing what’s going on. So, the discovery side of charities, we’re still way behind, but it’s there. So, you can find charities. But on the other end, it’s the cost of transaction online. It allows things like a grassroots mass strategy to actually be cost-effective, whereas in the past when we’re dealing with paper and mail, it just didn’t make sense.

And then also there’s a sharing component. So, I often talk about crowdfunding as, kind of like direct mail on steroids, where in the past you write this great appeal and you send it to someone, they open it up and they’re inspired and say, “Oh, this is great. I’m going to give.” But what would they do? Say, “Oh, I want my neighbors to find out. Let me zip to Kinkos and make some copies and hand them all over the neighborhood.” It just doesn’t happen.

But now we can have those types of asks that happen in real time. You can easily share it in your networks. You can pass things on. It’s really kind of leveling the playing field. It allows an organization like Charity Water to be as big as it is as fast as it is built on the backs of small donors. It’s really that technology revolution, for sure.

Steven: It’s an exciting time, especially for smaller nonprofits that maybe were locked out of some of those things just based on budget and manpower. We work with a lot of smaller nonprofits. I think that some of them are starting to feel left behind. They see all of these things that you’re talking about but don’t really know how to get into them, how to get started with them.

What kind of advice would you give to a small nonprofit, maybe even a newer nonprofit who sees all this happening and is maybe sort of feeling like they’re getting left behind. They want to get into it. How can they get into it?

Brady: Yeah. That’s a good question. It’s a tough question. Most of the consultancy and knowledge base that we have in the sector comes from higher ed., hospital, big organizations, traditional organizations, which is really, for the most part, irrelevant to small organizations and new organizations.

So, for a lot of organizations, one of the thing we say, especially if you’re new and kind of having a younger-ish, we’re talking like 40 and below maybe, as your core focus, digital first is the core. So, don’t even bother with things like a direct mail strategy and these kinds of things. Get ahead of the curve on where things are at now. Don’t try to play catch up with the things that have been going on.

When it comes to crowdfunding, again, we really try to draw the parallels between, “Look, you’ve been doing this–your direct mail appeals, your annual fund, whatever it is, you’re setting a goal. You’re reaching out to people. You’re making an ask and an offer. It’s the same thing, just in a different technology or form.”

Steven: Right.

Brady: The form actually has a lot of upside and things you couldn’t do in the past. So, if we can kind of translate what people know to be good fundraising and just reapply it into these newer things, whether it’s social media or crowdfunding or peer-to-peer, it’s the concepts that still apply.

Steven: So, maybe a good way to end is where can people really find good information about this? I’m talking about like best practices, case studies, examples so that if they want to do it, they’re not just sort of flying blind. Are there any resources out there or places that you know of where people can really learn how to do this in an effective way?

Brady: Yeah. Generally, that knowledge and information comes from platform and providers. So, us and Chimp and we have another company called Peer Giving that kind of builds crowdfunding and peer fundraising into websites. We do some of that ourselves in the US. Classy, it used to be StayClassy, they have great resources and information and know a lot about this. CauseVox is another one that has good stuff. Basically, any of them, Crowdrise, Razoo, Fundly, all of those organizations that do this have a lot of that information and a lot of those kind of best practices.

So, the only caveat would be some of them are for-profit and nonprofit. Those are pretty different strategies at times. So, be sure that you’re looking at one that’s really focused on nonprofit or for charity. Also, what I really like about Classy is they seem to get fundraising, but they understand what it means for crowdfunding and peer fundraising.

Some startups in technology just go, “Oh, crowdfunding is the best. This is how you should do it.” They don’t actually understand the intrinsic motivations behind donors, which is different than investing in a company or trying to buy a watch or something.

Steven: How do you pick those out? There are a lot of vendors. You just listed a lot of really excellent ones. CauseVox is great, Classy. Obviously you want people to check out Chimp. Fundly is a good one. But like you said, there are other ones where it just feels like it was kind of a startup and kind of a fly-by-night thing and people saw an opportunity to create that technology. How do you identify who are the really reputable providers? There are so many. It seems like there’s a new one every hour, I feel like, I see a new one.

Brady: Yeah. I saw something that said there’s over like 600 different platforms now just in North America alone or something like that. So, just looking at the website and their featured projects, often, they’ll showcase a few of their featured projects, if those are charities, then it’s probably more of a charity-centric platform.

They often have resources and sometimes they’ll just call out nonprofits or for charities. Or if you get into contacting them or emailing them, just ask them, “Can you tell me a few examples of how charities are using this platform or nonprofits specifically are using this platform?” There are a lot of things that are not charitable at law that are getting funded, right?

Steven: Yeah.

Brady: You fell ill and you needed some funds, I hope you don’t, but if you feel ill and you’re needing funds, I could donate to you in a non-charitable way legally, but that’s charity. I’m helping you. So, that’s what’s going to be interesting for me in the next 10-15 years where our definition of charity, which has come down from a legal perspective and a tax perspective is really becoming less and less relevant for the motivations of millennials and down of what they want to do.

It doesn’t matter if it’s charity and I get a tax receipt as much as I want to do something good. That will be a big challenge for charities, I think, to try to keep up and for the administrations to kind of define that or expand their definition or not.

Steven: Yeah. It will be interesting to see. I know you’re keeping an eye on it. Where can people find your writings? You’ve got excellent blog posts out there. You write for huge publications. I want people to read those. Where can people learn more about you and follow you online?

Brady: Sure. So, I do all of my stuff in one way or another at Re: Charity, so ReCharity.CA. So, if it’s posted somewhere else on Huffington Post or Chimp or HubSpot or wherever it is, I try to at least link to it. So, that’s kind of the central hub. I’m on Twitter @BradyJosephson. So, that’s where I’ll share a lot of that stuff. And we have a growing blog at Chimp, Blog.Chimp.net, which has a lot of good resources and we’re doing our own webinars. We’ve talked about doing something similar to Bloomerang TV. So, we’re copying you there.

Steven: That’s okay. I copied it from somebody.

Brady: Exactly. There we go.

Steven: Well, cool. We’ll link to all that stuff. Definitely follow Brady. He knows what he’s talking about. This was awesome having you. Thanks for taking some time out of your day to chat with us.

Brady: Thanks. Yeah. I really appreciate you having me.

Steven: Sure. Thank you for watching. We’ll catch you again next week with another episode. We’ll talk to you then. Bye now.