StartSomeGood

Tips and inspiration for changemakers from the social impact crowdfunding website, StartSomeGood

Tipping Point: What it is, why it works.

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In the earliest days of designing StartSomeGood, we had to make a decision about how to structure our fundraising model. We looked at other crowdfunding sites and debated whether to adopt the Kickstarter-style “all-or-nothing” model (where campaigns only receive funds if they’ve hit their goal) or IndieGoGo’s “keep what you raise” model (where campaigns receive all funds raised, regardless of goal).

But when looking at the priorities of our users and contributors, both models seemed to be lacking.

What if, we wondered, we could combine the best features of both and create a model uniquely designed for social entrepreneurs.  And thus the idea for the Tipping Point was born.

What is the Tipping Point, and how can design your campaign to take advantage of it?

On StartSomeGood you nominate two fundraising goals: your total goal and your Tipping Point goal. Your total goal is the dream amount you would like to raise to start the maximum amount of good. The Tipping Point is the all-or-nothing component of your campaign: this is the target you must reach in order to receive your pledges.

Why is this better for social entrepreneurs?

Because this is what we already do when we fundraise for community projects. I’ve spent my whole adult life involved in this process: designing projects, writing grant applications and fundraising from my community.  The target amounts for these campaigns usually represented our dream budget, with everything we felt would give us the greatest chances of success. They were ambitious stretch goals. But there was a second amount we always had in mind: the minimum amount we needed to start good.

For example, if we were trying to raise $15,000 for a project, we might be prepared to launch even if we only raised $10,000, cutting out some of the non-essential elements, or running a more limited pilot. This amount was the minimum we felt we needed to start good, the point at which we were prepared to get out there and make things happen.

The Tipping Point model makes these dual targets visible and transparent. The ability to list the Stretch Goal while highlighting the effect of incremental amounts raised beyond Tipping has the added effect of compelling donors to keep donating once you have reached fundraising goals.

We ask entrepreneurs to consider how much money is enough for them to commit to starting good. Because however well-intentioned, you can’t always start something from nothing. Even with all the volunteer support and community good-will in the world, some things cost money. Which is why having an all-or-nothing component of the campaign is important: changemakers can’t be expected to implement their vision regardless of the support they receive. 

Having a Tipping Point gives both donors and entrepreneurs security of outcome: your money only goes to the project if they have sufficient funds to deliver on their commitments, and entrepreneurs aren’t expected to work miracles if this support isn’t there.

Why not just have a single all-or-nothing goal?

Because with an all-or-nothing goal entrepreneurs tend to be expressing only this lower, minimal goal, fearful of aiming for too much, falling short and getting nothing. We want to allow social entrepreneurs to express more ambitious goals without risking everything. This ensures projects can more clearly express the social impact made possible by different levels of funding rather than just a single amount.

Tipping Points must represent the real Tipping Points in projects.

If your goal is to launch a program in two cities you can easily launch in just one if you only raise half your total goal. But if your project involves the purchase of a bus, you cannot simply buy half a bus if you fall short. Hence the Tipping Point.

It can help to show a general breakdown of costs to demonstrate how you arrived at your goals and your preparedness to take action. Though granular detail is certainly not required, transparency helps to build trust with potential donors. 

They also represent the amount of risk you are prepared to take on.

Do you go for the dream amount but risk falling short or identify a more modest goal which would still allow you to start some good? In evaluating this remember that the game dynamic of Tipping Points is very powerful: with funds already raised on the line your community is more likely to rally around your goal at the deadline to get you over the line.

This is partly because Tipping Points work like a matching grant – you use the funds pledged from your initial supporters to inspire your less-fervent supporters to chip in, increasing the impact of their contribution as you approach your Tipping Point.

We are committed to giving social entrepreneurs flexibility in designing their campaign, trusting that they understand better than us what is required to create the change they seek in their communities. Just as StartSomeGood welcomes all forms of social change initiatives, non-profit, for profit and unincorporated, we also allow each campaign to choose what component of their campaign is all-or-nothing, i.e. the placement of the Tipping Point, which can be between 25 and 100% of the total project goal.

We are always here to help you think through these issues and design a campaign that works best for you.

If you are ready to start some good, click here.

Author: StartSomeGood

StartSomeGood is the crowdfunding platform for social enterprise, non-profits and community groups. We've funded projects in 35 countries and have one of the best success rates in crowdfunding. www.startsomegood.com

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