3 Biggest Crowdfunding Traps Schools and Sports Teams need to Avoid

The future of fundraising is online. Not everything, of course -- a snack bar isn’t going to benefit (much) from posting on Facebook.  But the benefits and efficiencies of using email, text, social media and various online platforms (like FanAngel) makes it a foregone conclusions that more and more funds will be raised digitally.

If you’re a booster parent or team coach, then you know all too well the vast amounts of time you’re losing to fundraising. That’s time lost forever--time you could have spent with your family, friends or athletes.  That’s why it's so important to understand and navigate some common traps which many fall prey.

Leveraging the Internet to amplify efforts is a great objective, but many parents/coaches have tried and failed. Others have tried with some success, but have no idea they left a substantial amount of money on the table. This post exposes three common crowdfunding traps. The post also explains how FanAngel circumvents these pitfalls, ultimately saving you precious money, time and energy.

Big Box Trap

The first trap is what I call the “Big Box Trap”. This is trying to use a generic crowdfunding site (e.g. GoFundMe) or plop a donation button on your homepage.  This approach work great in certain circumstances: Medical emergency where the story revolves around a single person is an excellent examples. 

However, this approach is far from optimal for groups, like teams and schools. To understand why, you must look to a psychological phenomenon know as the Bystander Effect. This phenomenon tells us that people are much less likely to help (e.g. donate) when they think others might. This Bystander Effect is SUBSTANTIAL. Studies show a 50% drop in support. Can you imaging leaving HALF of you money on the table?  Or even worse, did you? 

FanAngel avoids this pitfall with something we call “Contextualized Crowdfunding”. With Contextualized Crowdfunding, a team or school is able to include individual photos and fundraising goals for each of its students/athletes. Emails are generated with an appropriate headshot, and the donation page includes the name, headshot, individual fundraising goal and progress of that athlete/student, thereby creating a deeper need and context to the donors.

The biggest appeal to the Big Box Trap is it's inexpensive.  Typical fees are between 5-7% (plus credit card fees) with crowdfunding sites and 3% for donation buttons alone. Some sites even claim to be free, but don’t fall for that trap either…they still tack on a 5-7% fee that is “optional” for the donor (however around 97% pay this fee begrudgingly). 

FanAngel isn’t the only platform that offers Contextualized Crowdfunding, but to the best of our knowledge, we are the only platform that offers it at Big Box prices (our fees are 5-7%, depending on banking setup).

Full Service Trap

Several companies offer full service solutions, where a representative visits your school or playing field, writes your scripts, shoots and edits the video/audio, and helps setup and manage the whole campaign. This sounds AWESOME until you see the bill. For this service, these companies charge between 20-30%. That’s upwards of 600% more than the Big Box Trap.

So, what are you really paying for? In this scenario, the bulk of that extra costs is going towards travel costs associated with an outside sales team and visiting representatives.

Given that these full service solution typically do a good job at contextualizing the campaign, they DO help schools and team raise more money…as much as 100%.  So, from that perspective, even paying a 20-30% fee will put you ahead.

Consider a team that can raise $5,000 without help and pays a 5% fee (plus credit cards fees) – they will pull in about $4,600.

Using a full service company, they might be able to double their raise to $10,000. Using a fee structure of 25%, and the team now pulls in $7,500! That's a 63% increase.

However, at FanAngel, we still think there’s a better way (and it's calculates out to  a 100% increase)! The reality is that everyone has a smartphone nowadays. Heck, schools and teams often have full-blown video studios. With a little planning and remote help, any school or team can shoot a few minutes of basic raw footage and upload it to Google Drive, Dropbox or YouTube. 

FanAngel’s solution is what we call “Cloud Service”, which means we are Semi-Full Service in the cloud. Our experts can write the script, draw storyboards, edit an uploaded video and audio, setup and manage the campaign – everything the Full Service solutions includes EXCEPT travel to your location and physical shoot the video. 

By cutting our this travel costs, we can keep our fees at 5-7% like the Big Box platforms, but still give schools and teams the full service treatment they deserve.

Using the same example above, the Cloud Service approach, plus a Contextualized Platform like FanAngel means, you’ll raise $10,000, incur a 5% fee (plus credit cards) and keep $9,200. That's a 100% increase!

Crowdfunding Trap

The last trap is crowdfunding itself. Not every school or team is a good candidate for a crowdfunding campaign. Demographics, local economics, parent/athlete participation, and various other factors play into the likelihood of success.

Thinking that crowdfunding is the only way to leverage the Internet for your fundraising needs is a mistake. There are lots of tried-and-true fundraisers that can still amplify their efforts by leveraging social media, email blasts, text…and a campaign page.

What about that spaghetti feed with auction, the drive-thru barbecue, the restaurant night, spiritwear, a lift-a-thon, flock-a-flamingos…  All those methods can still leverage the Internet to extend their fundraising capabilities and save valuable time and effort.

Consider, for example, a pancake feed fundraiser. Instead of just using fliers and posting on social media, make sure to setup an Event Registration page that can contextualize the event. To boot, include the ability to donate if the donor can’t make the event. Going even further, use a drip email platform to maximize interest (more on drip emails in a future post). 

To see more ideas, review of 21 Best Online Fundraising Ideas for Schools and Sports Teams page.  

We’ve got your back! 

At FanAngel, we are boosters, coaches and parents, too.  We are passionate about support sports, but we also know the time and energy it takes can be daunting. That’s why we’ve launched a blog and Facebook Group to discuss success and failure, share best practices, and support ALL aspects of fundraising – Online and Offline.   So, subscribe to our blog and join the Facebook Group to share your own experiences. 

We’re all in this together. 

David Burton

CEO, FanAngel