Standing Out From The Madding Crowd: Crowdfunding Lessons Learnt by School of Hard Knocks

School of Hard Knocks is a charity that uses sport to tackle the issues surrounding unemployment, crime, and health. Founded in 2012, we work with individuals to help them take responsibility and positive steps forward in their lives. We offer a number of different programmes, each tailored to its audience and principal aims. The constant factor is our methodology – controlled confrontation, challenging activities and a constant affirmation of self-worth and motivation.

We run courses throughout England, Scotland and Wales, changing the lives of children and adults throughout the UK using rugby, boxing and strongman courses, supported by a curriculum of powerful life lessons. We work with unemployed adults to help them find and sustain work, and with school children at-risk of exclusion to help them re-engage with education and improve their attendance, behaviour and attainment.

Most readers who have heard of us (if any of you have!) will know us from the annual documentary of our work shown on Sky Sports. Presented by Will Greenwood and Scott Quinnell, the show follows one cohort of adult men through a SOHK Adult course.  The show had nearly 900,000 viewers last year and is broadcast annually in September.

You could, therefore, argue that SOHK is naturally suited to crowdfunding.  We have a global media partner; celebrity endorsements; and experience of producing good quality video content. We also have a number of compelling case studies, likely to pull the heartstrings of potential investors.

Our experience, however, as a recipient of an RSA Catalyst grant (via Fellow Tom Peyton), has been that crowdfunding is an increasingly crowded and more complex fundraising mechanism than you might think.

First of all, you need to think about audience size. Statistically, the average donation via Crowdfunder.co.uk (our chosen platform) is £50; so to reach our target of £23 500, we need to find 470 donors.  As only 5% of the people who view your campaign will donate, this equates to nearly 10 000 page views.  Evidence also suggests that 70% of your givers will come from your existing network – so the first lesson of charitable crowdfunding is to have a big contact list in place and a seriously rigorous marketing plan.

A second major factor is the rewards you offer. Crowdfunding started as a fundraising vehicle for commercial companies, who typically offer equity or a dividend-paying bond to investors. This simplifies things a little, as the investor decides whether they think the company will succeed and whether the return on investment is high enough.

In the charitable sector, however, equity and dividends are essentially non-existent, unless you have a physical asset you can somehow offer as a security. Charities therefore, need to find cost effective rewards for different donation levels that will incentivise donors to give – on the assumption that purely philanthropic donors would already be giving to you, with or without a crowdfunding campaign. 

After testing different models for this over the last few months, I can say with certainty that I will never run a retail business. Trying to find rewards that offer a decent fundraising margin but also appeal to investors is a nightmare – especially if you don’t want the risk of storing and posting items yourself (not to mention the staff time needed on this). 

What it took us a while to realise, I think, was that the decision to give on a crowdfunding campaign is essentially commercial, not philanthropic. Donors (or customers, as they should really be called) are weighing up the value of the reward alongside the value of the social or philanthropic return and are looking for a combined value for money. So if my £20 ‘buys’ me a £2 key ring, I’ll need to feel that there’s £18 of social return on investment to donate.

Most crowdfunding sites are inundated with generic ‘please give to this organisation’ appeals. These appeals are doomed to failure and are essentially just restatements of that charity’s own website, which asks people to donate because it is a worthy cause.  Looking at the number of charitable campaigns that have failed to hit their target by offering only cheap mugs or ‘heartfelt thanks’ options, I think this lesson hasn’t yet sunk in across the non-profit sector.

Finally, it is interesting to look at what type of project fundraises effectively.  The biggest charitable crowdfunding campaigns, by far, are those for health-related causes, most commonly for treatment for a named, seriously ill child.  These causes are unique, in a way, as they are basically just philanthropic asks.  However, as noted above, they would be just as effective if they were set up via JustGiving, which would also allow them to claim Gift Aid and increase their impact.

If we leave these campaigns in a category of their own (the ‘probably should have used a different platform’ category), the best projects have a few things in common: realistic targets; a tangible output (i.e. not just ‘contribute to our organisation’s core costs’); a defined geography; and a simple, compelling narrative. In SOHK’s case, this is raising £23.5k to roll out our school's programme in south London, which we think ticks every box.  It remains to be seen, however, whether our learning through the RSA Catalyst grant can help us stand out from crowdfunding’s madding crowd.

SOHK's South London Schools Appeal goes live on 3rd October! 

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^{Are you an RSA Fellow looking to fund a great idea? - find out more about RSA Catalyst grants}