Crowdfunding and competitions – how does it work?

UPDATED JULY 2019

Crowdfunding campaigns are a great way to raise funds for your business or launch a new product or service to an audience who are already excited to use it. To incentivise support and call your target audience to arms, you might be planning to launch a competition in conjunction with your crowdfunding campaign… but you may not realise that there are pretty strict rules around the use of competitions when crowdfunding.

We wouldn’t be the home of competitions and giveaways if we didn’t know the rules around crowdfunding competitions too, so we’ve rounded up a list of popular platforms and their rules around using competitions to boost support.

If we’ve missed a platform and you’d like us to scope out their compatibility with competitions, comment below or get in touch with us.

Kickstarter.

NOT ALLOWED

Kickstarter is great for projects with a definitive deliverable – such as a movie, an app or a product. It focusses on innovations, inventions and businesses that offer products.

They are crystal clear when it comes to competitions (or contests) not being permitted on their platforms:

“We prohibit projects that are illegal, heavily regulated, or potentially dangerous for backers, as well as rewards that the creator did not make… [including] Contests, coupons, gambling, and raffles.” – Kickstarter rules.

From reading a lot of different articles on the subject, some by people who have received permission to run their competition alongside their Kickstarter, it seems as though Kickstarter are against the idea that only some of your backers will receive a reward or prize, but it looks like they are open to discussing specific competition ideas, so you can always contact them for a definitive answer…

Pozible.

NOT ALLOWED

Pozible markets itself as a crowdfunding platform for artists, non-profits and startups in Australia. The projects are usually creative in nature and feature a lot of artists, musicians and small business projects.

Again, they are very clear on not allowing competitions or entry into a competition as a reward:

“You can’t offer entries in raffles, competitions or other gambling services, stakes or odds as rewards.” – Pozible guidelines.

Now, you could get pedantic and say that they only state ‘as rewards’, so you could run a competition alongside your regular rewards… I’d always err on the side of caution and contact them for clarification for your individual competition.

Indiegogo.

POSSIBLY – SEEK PERMISSION

This crowdfunding site markets itself as the place to raise funds for innovations in technology and design and features mostly products, with a few indie films and albums mixed in.

Indiegogo cover competitions in some depth in their terms, laying out the exact conditions in which you are permitted to use competitions with your campaign, but only once you have sought permission from them:

“Campaign Owners may not offer any contest, competition, giveaway, sweepstakes or similar activity… without Indiegogo’s prior written permission (which may be granted or withheld by Indiegogo in its sole and absolute discretion).” – Indiegogo ‘legacy’ terms.

UPDATE: The quote above is from Indiegogo’s ‘legacy’ 2017 terms, it would appear that the terms ‘contest’, ‘competition’, ‘giveaway’ and ‘sweepstakes’ don’t appear in their updated, 2018 terms, so all the more reason to get in touch with them, clearly explain your competition idea, ensure you don’t require payment to enter the competition and attach your terms and conditions (or rules) which clearly release the platform from liability and responsibility for the competition.

GoFundMe.

POSSIBLY – SEEK PERMISSION

GoFundMe focusses on raising money for events, usually of a personal nature such as getting to a sports championship to compete, raising money for hospital treatment or donating to deserving charities.

The only reference to competitions (contests) is in their terms of use is:

“Promotions: You are not permitted to offer any contest, competition giveaway, sweepstakes or similar activity (each, a “Promotion”) on or through the Services without our prior written consent which consent may be withheld in our sole and absolute discretion.” – GoFund Me terms and conditions.

UPDATE: ‘Contests’ used to be mentioned by name under prohibited activities, but GoFundMe seem to have softened their rules around competitions slightly, though you still have to seek permission with no guarantee it will be granted.

StartSomeGood.

POSSIBLY – SEEK PERMISSION

StartSomeGood is focussed on not-for-profits and social enterprises that, well, start some good in the world!

They don’t explicitly forbid competitions, in fact, they don’t mention competitions, contests, sweepstakes or giveaways at all in their terms of use, FAQs or Criteria. If you strongly feel that your social enterprise would benefit from a competition in conjunction with your crowdfunding campaign, I would recommend getting in touch with them via their contact page to ask if your idea would be permitted.

You can peruse StartSomeGood’s terms here.

ReadyFundGo.

POSSIBLY – SEEK PERMISSION

This crowdfunding platform is aimed at startups and innovators in Australia and funds mostly business ideas and projects.

In their terms, they don’t specifically cover the use of competitions, giveaways, raffles or contests, but that doesn’t necessarily mean it’s permitted either. The best course of action would be to contact ReadyFundGo directly to ask if you competition idea would be allowed on the platform.

You can check ReadyFundGo’s terms and conditions here.

Your very own website…

HELL YEAH IT’S ALLOWED!

Here’s one you may not have considered.

Many successful projects have been crowdfunded using crowdfunding plugins hosted directly on a company’s website. The biggest challenge you will face will be traffic – which is exactly where competitions come in handy.

The platforms above are recognised crowdfunding sites where people go to support something, they have an in-built audience already. Crowdfunding on your website, without access to a platform’s existing audience means you’re going to need to build an army of supporters in advance, ensure you have healthy traffic to your site during your campaign and most importantly, promote your campaign absolutely everywhere.

I’m not going to go into every possible plugin out there as it’s easy to google “crowdfunding plugins” (which is exactly what I’d be doing anyway…) plus there are many more qualified than me on the subjects of crowdfunding plugins who have already written pretty comprehensive articles on the subject, like this one from Kista.

How to make the most of your crowdfunding competition.

As competitions are our speciality, what we will do is leave you with some parting tips to make your crowdfunding campaign work like a dream with your competition idea…

1. Find a way

Just because the major players say no to running a competition with your crowdfunding campaign, it doesn’t mean you can’t still go ahead with your idea – just in a different way.

Consider using your competition idea to raise awareness and supporter email addresses before you launch your crowdfunding campaign – ReadyFundGo even recommend this on their blog.

2. Remember your goal

Your goal is obviously to hit your crowdfunding target. Keep every aspect of your competition geared towards this goal. From your entry method to your promotional messaging, push them towards the goal of pledging support and donating.

3. Keep it relevant

Offer a prize that’s relevant, valuable and attractive to your target audience, the ones who will continue to use your business, product or service long after your competition – and crowdfunding campaign – has come to a close. Use these tips to get to grips with who your ideal entrant is.

4. Promote, promote, promote!

I can’t emphasise this enough! A competition, like a crowdfunding campaign, is 20% strategy and 80% promotion. If people don’t know you’re running a campaign, they can’t support you. Make sure you’ve got a comprehensive promotion strategy in place before your crowdfunding campaign goes live and you’re reminding your audience every couple of days that you’re live and would love their support. If you need a hand with ideas, we’d love to help.

Competitions, or contests, may be prevented by the big crowdfunding platforms who have obviously had a bad experience with a few bad eggs, or worry that your backers won’t be properly rewarded for their support; but there are plenty of innovative ways to overcome this. From pre- or post- crowdfunding campaign competitions to hosting your crowdfunding campaign on your own website using a number of pre-made plugins.

Whatever you decide, be sure to shout about your competition from the rooftops to ensure you smash your crowdfunding goal – and if you need a hand, you know where we are.