What Type of Campaign Should You Run?

Crowdfunding tips & resources

by David Van Seters
Wayblaze co-founder

It is important to carefully consider which type of crowdfunding you want to use to raise your needed funds, as each is best suited for different purposes. Whilst most crowdfunding platforms only offer one or two types of crowdfunding, Wayblaze offers four.

4 crowdfunding types for you to choose from

Donations

These are simply financial contributions with no conditions attached, which may or may not be eligible for a tax receipt, depending on whether or not your organization is a registered charity. Choose this type of campaign if you think your cause has a strong emotional appeal to a large audience.

Rewards

With a rewards campaign, you assign different rewards for different levels of support. For example, if you are raising money for a tool lending library, a $10 contribution might earn a free one-week equipment rental whereas a $100 contribution might earn a 1 year membership. Ensure that the reward is appropriate to the requested contribution amount for each reward level. Choose this type of campaign if you are a business or enterprising non-profit and can offer a range of tangible benefits in exchange for contributions.

Debt

This type of campaign involves obtaining a loan from your backers and then repaying it over time on an agreed schedule. Your debt campaign should specify the interest rate you are offering and the period over which it will be repaid (e.g. 4.5% interest with 36 monthly principal and interest payments). You should only select this option if your initiative or business will generate financial proceeds that are sufficient to allow you to cover operating costs and repay the loan.

Equity

In an equity campaign, you invite your backers to become equity owners in a business or cooperative. In this type of campaign, there is no requirement to repay the backer although typically the backer will receive a share of the proceeds from the business and there may be a future opportunity to sell the shares, hopefully at a higher price than originally paid. Only choose this option if you are legally able to issue shares and are comfortable managing a large number of shareholders.

Even if you choose to run a donations type campaign, you may still want to offer perks as a way of recognizing different levels of support. Here are some examples:

Perks for donation campaigns

A thank-you mention through social media

Recognition on a wall plaque

A donation to a related cause

A special thank you video

A T-shirt or Mug from your organization

Perks for rewards campaigns

A discount coupon

The item that you are trying to raise funds for

$120 in products/services for every $100 paid

Products at a discount through a bulk buy

Invitation to a VIP preview event

Research has shown that 3 to 7 perks, with a wide range of dollar amounts work best. If your perk is a product, make sure that you consider both the value of the product and the cost to deliver it to the backer and allow ample time to fulfil your perk.

Case Study: NADA

NADA is Vancouver’s first package-free grocery store. They ran a very successful and well-executed rewards campaign which raised $55,000 from nearly 500 backers.

NADA used a series of well designed graphics to illustrate a creative range of rewards which ranged from $15 to $1500 and included zero-waste tips, natural toothcare kits, package free grocery store coupons, zero waste workshops and even a sailing trip with the founders.

Check out NADA’s great campaign page