Opting to launch a campaign through an external crowdfunding platform can offer multiple benefits — including access to socially engaged audiences.
For new energy communities (ECs) or those launching their first crowdfunding campaign, the opportunity to reach the platform’s existing supporters can be a huge drawing card. Most platforms make it very easy to launch a campaign and offer tips for success. Still, ECs should be aware that attracting a high number of small donations requires substantial time on the part of staff or volunteers.
When selecting a platform, ECs should consider the following:
- Platform specificities: Some platforms specialise in particular types of projects (e.g. technical innovation, start-ups or helping people in need) or serve only certain geographical regions.
- Popularity at the scale needed: Depending on the geographical scope (local, regional, national or European) of the project and the fundraising goal, ECs may want to select a platform that targets a narrow group or is extremely wide.
- Easy payment system for donors: Payments and/or donations can be made through a donation button set up on the EC website, specific campaign pages, with a QR code or using EC social media channels. As they are linked to digital collection of money (via Open Banking financial technology and through use of application programming interfaces (APIs)), such systems allow anonymous (if preferred), secure and easy-to-use digital ways to donate from a bank account or a debit card.
- Payout schemes and related fees: Most crowdfunding platforms charge a fee to campaign organisers, which should be considered as a ‘cost line’ in setting the fundraising goal. Typically, the fee is a small percentage (2-5%) of each donation and many platforms ask donors to consider covering it, so their full donation goes to the campaign. Relative to the time and cost of developing a platform from scratch, the fee is usually quite low. Reading ‘the fine print’ about when funds raised will be transferred to the EC is also critical. A long payout period could create cash flow problems if the campaign has early expenses.
- Country in which the platform is legally registered: The precise pathways through which money flows, including its origin and destination, as well as temporary storage locations within the platform, carry significant implications for both safety and cost. Ensuring the platform is headquartered in a country with a reputable banking system is critical to avoid potential problems. Selecting a platform in a country other than where the EC and the target donors are located can lead to excessive currency exchange and transfer fees.
- Features: Consider the various features needed to run a successful fundraising campaign. This might include things like whether it is possible upload EC branding, photos and videos and how easy it is to link the platform to EC social media channels. Also, look for a platform that automates key functions such as preparing tax receipts (where applicable) and sending notes of thanks and updates to supporters. Such platforms can substantially reduce administrative burdens and related expenses.
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