World Business Chicago is taking a second stab at helping community
development organizations and small businesses raise money on crowdfunding site
Kickstarter, revising its guidelines after the initiative's first round produced
The city's economic development arm had introduced its Seed Chicago program in April, working with Accion Chicago and the Local Initiatives Support Corp. to select 11 community development and entrepreneurial projects to be highlighted on Kickstarter, an online fundraising platform geared mostly toward design and artistic endeavors.
Of the 11 projects, only five reached their fundraising goals. Kickstarter uses an all-or-nothing model, meaning projects that do not hit their target amounts receive no money.
The five successful campaigns collectively drew in more than $50,000 from nearly 900 donors. Growing Home Inc., which runs workforce development programs at organic farms, raised $21,027 for a new greenhouse in the Englewood neighborhood, just surpassing its $20,000 goal. Community group Teamwork Englewood, meanwhile, blew past its $5,500 target to raise $10,235 for a 10-week summer program where Englewood teenagers will learn computer programming and Web development.
Most of the six unsuccessful campaigns received pledges representing just a fraction of their goals. Tamale Spaceship, a food truck seeking $34,000 for a brick-and-mortar restaurant in Pilsen, collected $6,376 in pledges. A group seeking $27,000 for a public art project in Logan Square received $3,304 in pledges.
"We would have loved to see more of them get funded, but we knew it was more important to create variety in funding goals and projects in the non-profit space and the small business space and test what works best," said Katie Olson, strategy manager for World Business Chicago's Plan for Economic Growth and Jobs.
For the next round of Seed Chicago, funding targets will be capped at $10,000. Olson said some of the large fundraising goals in the first batch might have been overwhelming to potential donors, especially when they were for broad projects such as establishing an entire small business. Applicants for the second round of Seed Chicago will have to take a narrower focus.
World Business Chicago is also adding an extra layer of vetting by requiring that applicants first get approval from Kickstarter. In the pilot, Seed Chicago organizers realized close to launch time that some campaigns "weren't the best fit for Kickstarter's platform, but by then, we'd identified the projects and worked with them so closely," Olson said.
"This time around, we will...work with Kickstarter staff to really hone in on a project that could be funded, based on the types of projects that Kickstarter backers tend to support," she added.
Fluency in social media and crowdfunding in general helped Seed Chicago's successful projects, since they were able to reach out to their networks and rally donors. Olson said World Business Chicago will provide planning and campaign management tools to project leaders.
For the second round of Seed Chicago, organizers are looking for at least 20 campaigns. Olson said officials still believe Kickstarter is the best platform for online fundraising, and that groups need to craft campaigns that will resonate with crowdfunding donors.
"Crowdfunding has really exhibited exponential growth, but it hasn't been adapted for small businesses, particularly in Chicago, so we continue to feature projects in an attempt to refine crowdfunding," she said.
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