Please note : This article dates from 2013 and is written from during Adam’s previous role as founder/director of online radio station, Soundpond.net. Core concepts remain very much in play, but some data and facts (re: platform capabilities) may be outdated.
Our 6-week-long fundraiser recently concluded. We thought it could be useful to other creatives to breakdown some financials, and answer questions like.
- How did we achieve success?
- When did our campaign make the most money?
- What factors affect the final payout? Fees, taxes?
- The impact of costs for the “perks” donators get?
The target was $15,000 AUD, and we smashed it! Another $10,000 contributed by the Adelaide City Council has ensured our move into a multipurpose Broadcast/Arts/Music venue, hopefully in about 2 months! (Editors note : Soundpond.net went on to raise more than $80k more via State Government grants).
Some key facts about the campaign, crowdfunded entirely online, hosted by Indiegogo.
- Indiegogo is the worlds largest fundraising platform.
- Risk Management
- Indiegogo also allowed “partial” campaigns. Every other platform only pays out if you hit your goal. Indiegogo let’s you keep whatever you managed to raise (minus a fee). 9% if target not hit, 4% if hit.
- Payment Methods
- Direct CC, or via Paypal. We took cash/direct depositexternally, then paid it into the campaign. Sure we’d lose a percentage on transaction fee’s, but it helped boost the campaign numbers and that helped generate buzz. Paypal payments came through to us immediately. CC payments were held by Indiegogo till the end (and take 10-15 days to transfer).
- Negative aspects.
- While Indiegogo allows campaigns by AUS companies, the campaign is actually in USD. This wasn’t made clear at checkout, and depending on the exchange rate, a contribution would actually cost more/less, plus an international transfer and currency conversion fee. This actually ended up being slightly beneficial to us, as we’ll outline later.
- Other Costs.
- As the final transfer comes from Indiegogo overseas, there were international wire fees, and currency conversion fees charged by Paypal, Indiegogo, and our bank.
The graph above shows total $ over time.
Starting with a big flurry of donations things settle down rapidly, which is entirely normal. The next big rise is on a Monday Night, traditionally this was the busiest night on the station and our social media. A repeating pattern of “flat spots” over the weekend emerged. Soundpond.net was at the time an entirely online enterprise, and hardly updated social media then. Surprisingly, we actually saw a steep increase in the middle of the campaign…traditionally in crowdsourced campaigns this is the “flatspot” (something like 80% of donations are usually raised in the first and last 10% of the campaign time). We attribute this to the efforts of Erick “E” Watson, who made a series of update videos around this time, which got hundreds of views. Note : Some of the “jumps” came from our two fundraising events : Soundpond.net Day at the Ed Castle, and donated door from “Panic! DJ’s” event at Ghost Ships.
In the last third of the campaign it appears that donations were coming in steadily, but this is misleading. The donation rate actually slowed down significantly, but the average donation amount more than doubled. The high rollers who’d been holding back jumped in…we attribute this partly to the announcement of our “Fox Creek” wine perks, 10 of which sold in one week, really highlighting the importance of growing a campaign. You need to announce new details, new perks, and push them…and it gets results!
FOMO is so, so real. Make bank from it.
The HUGE jump right at the end is courtesy of our 50-hour-lockin, which saw ~$4,500 USD raised in the space of 72 hours. This was not a freak accident, our research revealed in many campaigns most donations happen at the end (FOMO is real) so we scheduled our major event for then.
Our station founders and Erick “E” Watson locked themselves into the studio live-on-air and completed a range of challenges dreamed up by our fanbase. It was humiliating, and effective. Donations traditionally skyrocket on the countdown to the end, this is when people want to help push it over the line.
The graph above shows donation frequency over time. A big spike at the beginning. Interesting to note is the second large “peak”, does *not* correspond to a big jump in the overall total…this was when we released 19 original tracks by Adelaide artists for $5 or more. Quite a few people jumped on that pack, but $5 donations don’t massively increase the total. Still, great to see lots of people supporting the tunes! Clearly shown here is the “lock in” blowing the campaign out the water, with over 35 donations per day. Something like 110 donations (out of a total 250) occured in the last 72 hours.
Check your platforms currency! THIS IS CRUCIAL!
The graph above compares the average value of the AUD/USD. Indiegogo collected/paid in USD.
Editor note : Reminder this is 2013 data! The average value of the AUD has been pretty damn strong for the past 3 years, hovering around $1! This is good, it meant that when people went to donate say $100 on the campaign, it would cost them about $100 AUD, + a credit card and transfer fee. However, what nobody could have predicted (at least, not us), is that the AUD would take one of the biggest, fastest drops in value in recent history just as our campaign kicked off! What did this mean to the average punter? A $100 USD donation to the campaign now cost $110 AUD, plus transfer fee’s. This really wasn’t made too clear during Indiegogo’s checkout process.
We got super lucky. If the value of the AUD had drastically increased after the donations were made, we would have lost out. Big time. Up to about 10% of the total value. Instead, we increased our total value. So the biggest thing to be aware of if choosing Indiegogo over Pozible, is that the currency exchange rate can be an “unknown” factor. At first glance, even though it appears in this case it’s helped us, it really only helped the donations that were made at the beginning of the campaign. Anyone donating near the end got hit by the weaker value of the $AUD. The Indiegogo fundraiser total was $USD16,467 US Dollars, approx $AUD18,100. (As of exchange rates on the 6th July 2013). (Editors note : or $21k+ in 2017!).
Fee, fi, fo, fum, and more fee’s.
- $AUD Campaign Total before fees = $18,038
- Fee’s : Indiegogo platform fee (4%). Credit Card fee (3%). Wire fee ($25). Paypal fee’s (~3%)
- Total fee’s = 8.25% , ~$1,500
- Campaign Total after fees = $16,549
- Cost of providing perks (T-shirts, hoodies, stickers, etc) : $2,000 (~11% of total)
- Total raised : $14,550 AUD (80.66%)
- Adelaide City Council Contribution : $10,000
- Total funds pool for the new station : ~$24,550
Just *Some* of the expenses we’re facing.
- Rental deposit ~$10k
- Swipe card entry system + install ~$2k
- Transitional rent (old premises) $1.5k
- Co-working office area fitout ~$1.5k
- Council Fees ~$varies
- Additional soundproofing in new studios $~2k
- Front Reception Counter ~$500
- Street signage ~$varies
- Internet connection/modems etc $~500
- Fire Extinguishers and Emergency exit mods $~1,000
^ Already up to ~$19k, and the fundraiser total doesn’t include taxes etc! The total raised also doesn’t take into account the costs of media production for the fundraiser, our time and effort put into starting the campaign, shooting video for it, promoting it, doing the lock-in, or the time it’s going to take to create over 250 packs for the contributors (consisting of stickers, shirts, hoodies, wine, etc). Luckily, all of this is being done by the station founders and a team of dedicated volunteers, so won’t actually cost us much in financial terms. If you had to pay for this labour though, it’d eat up a significant portion of the earnings. There will be a few additional costs in postage etc, no doubt. We are planning to bulk-order some items (like hoodies) and use the sale of them to offset this cost. $24.5k will make life a bit more comfortable, but it’ll go pretty quickly.
It’s the end of a long, hard road…and the start of a whole new one, but we’re up for it! Estimated move in time is mid to late August. Hope to see you at the launch!
Follow up note : Most donations came in around the $25 mark so always have a “perk” here!
This article originally authored by Adam in 2013 during his tenure as owner/director of radio station Soundpond.net. Post-sale Soundpond’s new owners decided to do away with most of the existing online content comprising of near 500 articles, so some has been saved and republished here from historical backups.