Crowdfunding for your Socially Responsible Business

Written By Sharon Schneider

One advantage of being a socially responsible business is having a compelling brand story, which leads to loyal employees, customers and community partners. You might be thinking - that’s great. But how do I turn that good feeling into revenue?

Our show today is about turning that customer loyalty into financial support that goes beyond sales - through crowdfunding. Crowdfunding was previously limited to soliciting donations, but thanks to the JOBS Act of 2012, you can now raise equity in small amounts from a large group of people. Our guest Devin Thorpe, bestselling author and podcaster, shares the secrets of a successful crowdfunding campaign for your socially responsible business.

I see three flavors of crowdfunding that I think are worth differentiating:

  • Charitable Crowdfunding: First, you might be thinking about crowdfunding sites like GoFundMe, which is often used for individuals facing medical bills, or recovering from a natural disaster. This is purely charitable crowdfunding, you are making donations to an individual just because you want to be a good neighbor or friend or human. Nonprofits also run charity crowdfunding campaigns, which are mostly about getting their existing network of supporters to bring in other financial supporters by giving them something to post about on social media. 

  • Rewards-based Crowdfunding: Think of a Kickstarter campaign to back a new gadget, or a new board game, or a clever invention of some kind. The entrepreneur needed funding to get their invention into production, so they would use crowdfunding to pre-sell the product, build a community of people really excited about it, and then use the funds to actually execute and deliver on all these pre-orders. The reward here might be the actual product, or it might be some kind of swag for smaller donations, like stickers or shirts or mugs. It might be an intangible perk or recognition. But the funds are still donations, where people get a reward (the product) for a certain level of donation. (True story - in 2015 I backed a Kickstarter campaign to fund a documentary called The True Cost about the impact of fast fashion, and in return for my $1,000 donation, I received an associate producer credit in the movie. It was the coolest thing ever. But it’s not like I got a piece of the proceeds of the movie. I donated money, I got a reward, and that was the end of the contract.)

  • Equity Crowdfunding: Before the JOBS Act of 2012, you could only raise equity financing from accredited investors, which meant people with a net worth of $1 million or more (not including your house) and/or an annual income of $200,000 or more. But with passage of the JOBS Act, you can now raise small amounts from a whole bunch of non-accredited investors, which paved the way for equity crowdfunding. If you are raising equity through crowdfunding, of course, that means that each person will actually own a small part of the company. So you’re entering into a much more long-term and serious contract arrangement. And your investors are coming along for the ride, the good, the bad and the ugly. As you can imagine, it’s not for everyone. But it can be a major lifeline for small businesses. And today we talk to an expert in the world of crowdfunding, Devin Thorpe.

Devin is a bestselling author who calls himself a champion of social good. He travels extensively as a volunteer doing service, as a new-media journalist finding heroes and as a speaker sharing what he’s learned. As a Forbes Contributor, he covered social entrepreneurship and impact investing, reaching an audience of over 2 million people. He has produced over 1,200 episodes of his podcast featuring luminary change agents, including Bill Gates. His books—read over 1 million times—help people do more good. He has helped nonprofits raise millions of dollars via crowdfunding. He draws on his experience as an investment banker, CFO, treasurer and U.S. Senate staffer.



Here are some of the resources mentioned on the show, and you can listen to all of Devin’s experience and advice on VoiceAmerica.com, Spotify or wherever you get your podcasts

Find Devin on social media:

And get your copy of Devin’s books:

Sharon Schneider
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