Introducing the Social Benefit Company – a new legal structure for Australian Social Enterprises

Background

Chuffed.org was launched in October 2013. At the time, we decided to incorporate it as a (non-DGR) charity – formally as a Company Limited by Guarantee. This decision wasn’t straightforward. We thought of ourselves as a ‘social enterprise’ and neither the ‘charity’ structure nor the ‘for-profit’ Pty Ltd structure really seemed to feel comfortable. If you had asked us at the time, why we chose the charity structure, we would’ve probably said something like “it’s the right thing to do; we’re not in it to make money; we’re here to change the world”. My gut feeling though is that we chose it because, having worked in the charity sector for the previous 5 years, we were more comfortable with how it worked, and where charities got money from. The structure also allowed us to raise philanthropic capital from the Telstra Foundation to kick start the business.

As we scaled though, to raising $5.1m in 2 years through the platform, it became very clear that we had a commercially-viable business – a business that could become the best in the world at supporting our community.

To do that though, we needed money. And this is where the charity model breaks.

Philanthropy is great at funding shiny things to get from $0 to $5m. It’s not great in helping a successful venture get from $5m to $50m and pretty much non-existant in helping you get from $50m to $500m. And so we knew we had to change the type of capital we were raising – in order to grow, we would need to raise equity.

Unfortunately, that’s not possible in a charity model, so we needed to convert our structure.

The goal

We wanted our new structure to allow us to raise equity while embedding our purpose into our DNA. Practically what ’embedding our purpose’ means to us is:

  • that everyone (i.e. shareholders and directors) is clear on what the purpose of the organisation is; and
  • that they are required and permitted to act to further the purpose; and
  • that shareholders (in particular founders) have a way of ensuring that the purpose is followed even with ownership changes

 

Enter the Social Benefit Company

The solution we came up with was the Social Benefit Company. It’s a model based off the US Public Benefit Corporation model (in particular the Delaware and Californian models).

It consists of three tenets:

  1. A clear statement of a specific public benefit that the organisation is set up to deliver (the “Purpose”) which we put into our Constitution.
  2. Directors of the Social Benefit Company are permitted and required to deliver the Purpose and to consider the wider impacts of their decisions as part of their duties as a Director of that Company (“Directors Duties”) – again we put this into our Constitution.
  3. A requirement that changing the Purpose or Directors Duties requires a 100% shareholder vote (“Mission Lock”). This was put into our Shareholders’ Agreement.

That’s it. This structure sets out a clear purpose for the organisation, and ensures that the purpose can’t be changed without Founders agreeing to it.

What do I need to do to become a Social Benefit Company?

Regardless of your situation, you’ll need to get legal and accounting advice. We’re not lawyers, but we’ve spent a considerable amount of time and money on thinking about this, so here’s our lay advice:

If you’re currently not incorporated:

Incorporate a Pty Ltd company and adopt a Social Benefit Company Constitution and Shareholders’ Agreement. You’ll also need to figure out what your purpose is – sounds easy, but this took a lot of iterations for us.

If you’re incorporated as a Pty Ltd company:

As above, but no need to incorporate a new company. Depending on your existing Constitution/ Shareholders Agreement, you may need a certain number of Shareholders and/or Directors to agree to the changes.

If you’re incorporated as a charity:

This is much trickier. We’d advise seeking legal and accounting advice. You’ll need to move your social enterprise into a Pty Ltd structure before you can adopt a Social Benefit Company structure.

In order to foster the growth of the Social Benefit Company structure in Australia, we’re publishing the relevant clauses from our Constitution here. Hopefully, they’ll be a useful starting point for your lawyers.

The Social Benefit Company Constitution

2. Purpose

2.1 Company’s Purpose

The purpose of the Company is to [insert purpose here] (Purpose). In the pursuit of the Purpose, the Company may do all lawful things, including, but not limited to engaging in activities that directly or indirectly support the Purpose. From time to time, the Board may by unanimous resolution determine any specific purposes of the Company in the best interests of the Company.

2.2 The Company’s best interests

In discharging its duties, and in determining what is in the “best interests” of the Company and its members, the Board shall be considered to be acting in the best interests:

(a) when it is directly delivering on the Purpose; and

(b) when it considers factors including, but not limited to, the long-term interests of the Company, the effects of any decision related to the current employees, the suppliers and customers of the Company or its subsidiaries, the environment and the communities in which the Company or its subsidiaries operate, (collectively, with the members, the “Stakeholders”).

In determining what is in the best interests, the Board is not required to regard any interest, or the interests of any particular group affected by a decision made by the Board, as a dominant or controlling interest or factor.

2.3 Director’s discretion in determining best interests

Notwithstanding the foregoing, any Director can rely upon the definition of “best interests” as set out in rule 2.2, in performing their duties under applicable law, and such reliance will not be construed as a breach of a Director’s fiduciary duty of care, absent another breach, even in the context of a change in control transaction where, as a result of weighing other Stakeholders’ interests, the Board determines to accept an offer, between two competing offers, which has a lower price per unit.

2.4 No cause of action

Nothing in this rule 2, express or implied, is intended to create or will create or grant any ancillary legal right in or for any member or Director, nor any cause of action by or for any Member, Director or person in relation to the application of this rule 2.

The Social Benefit Shareholders’ Agreement

Definitions

Unanimous Resolution means a resolution:

(a) approved by the holders of 100% or more of the issued Shares held by those Shareholders present (by any means) or voting by proxy or representative and entitled to vote; or

(b) identified in a document where all those persons entitled to vote on the resolution sign a statement that they are in favour of the resolution set out in the document.

 

Matters to be determined by Unanimous Resolution of Shareholders

Matters to be determined by Unanimous Resolution of the Shareholders are:

(a)         (Constitution) amend Rule 2 – the Purpose clause of the constitution of the Company.

 


FAQs

For those of you who want the really nitty gritty, here’s some of the issues that we thought through. We leaned heavily on previous work done by Clayton Utz and Social Impact Hub and we’ve tried to reference where we’ve directly quoted them (see references at the bottom).

WARNING: This isn’t legal advice and there’s very little to no case law in this area that really provides a huge amount of clarity on how the courts would act. It’s our lay opinion, albeit based on a lot of research.

But, don’t the Directors have to “maximises profits to shareholders” according to the Corporations Act?

At common law, Directors are required to act in the interests “of the Company as a whole” [1]. Over the years, the “company as a whole” has been taken to be interpreted as being the financial wellbeing of the shareholders as a general body.

However, the consitution can be modified to define the best interests of a company in such a way as to affect the obligations of directors. That is, a constitution can define the consideration of non-shareholder stakeholders interests (eg. employees, the environment, suppliers) to be in the best interests of the company.

This is a view supported by both the Ford’s Principles of Corporations Law as well as the former Government body, CAMAC [1].

For Chuffed.org, we make it clear in our constitution that acting in the best interests of the Company involves directly delivering on the Purpose and considering all Stakeholders that our decisions effect (in particular, employees, suppliers, customers, the environment and the communities in which we operate).

How does the ‘mission-lock’ actually work?

In practice, the people who set up social enterprises are the ones who believe most in the Purpose and are the ones who want to see it protected. The purpose of the mission lock, therefore, is to ensure that the Purpose and the Directors’ obligation to follow the Purpose can’t be changed without the founders’ permission (regardless of how diluted their shareholding may be and regardless of whether the founders remain as Directors). The requirement of a 100% Shareholder vote to change these elements of the Constitution creates what we call the ‘mission-lock’.

The ‘mission-lock’ also comes with an enforcement mechanism, albeit one that hasn’t been tested in case law.

If Directors’ act wilfully against the Purpose or with disregard to their Duties, shareholders (acting on their own behalf or on behalf of the company) could theoretically seek an injunction to force Directors to act according to the Purpose. This has not been tested in case law but our hope is that action could either be taken for breach of the Company’s Constitution (under Section 140(1) of the Corporations Act) or for breach of Director’s Duties (under section 1324 of the Corporations Act) [1]. Again, this is a very untested area of the law – and hopefully we’ll never have to test it – but our belief is that the current Corporations Act allows for an enforcement mechanism which is about enforcing the Purpose, rather that any damage claims which we believe is the right balance.

Why don’t you have a ‘General Public Benefit’ statement like the US Public Benefit Corporations?

One of the key principles we were solving for is that Directors understand what their duties are and that conversations at a Board level are aided by the Purpose statement, not confused. Our feeling was that General Public Benefit statements actually confuse the conversation because they are so broad that you have no real idea when you’re not delivering on them.

Doesn’t this risk Directors being sued by non-shareholder Stakeholders for not delivering on the stated Public Benefit?

While non-shareholder stakeholders could take action under section 1324 of the Corporations Act for non-delivery of the stated public benefit [1], it’s incredibly unlikely and there’s very little basis for any action.

Why a ‘mission-lock’ not an ‘asset-lock’ like the UK Community Interest Companies?

While asset-locks theoretically seem like they protect the Purpose, we don’t believe that asset-locks are an effective mechanism because they’re so easy to get out of. Also, and arguably more importantly, no equity investor – even impact investors – will invest in an entity with an asset lock, which basically means that you can raise debt or grants.. which is the same as a charity, which gets us back to where we started.

Disclaimer

Everything contained in this post is a lay opinion and should not be relied upon as a legal opinion. We’d advise getting in touch with your lawyers who can step you through the details of creating a Social Benefit Company in Australia.

References

[1] We’ve relied heavily on the Clayton Utz Opinion prepared for Small Giants and the Social Impact Hub’s excellent report available here. We don’t however share the opinion that’s promoted in both of these documents that extra legislation is required, however we do believe it’d be useful.

What are the most successful perks/rewards for my crowdfunding campaign?

Perk Soft Toy Bear

We get asked a lot about perks and rewards and how important they are for crowdfunding success? Do I really need to offer perks? Won’t it stop people being philanthropic?

Our answer to these? Perks help. A LOT.

The reason for this is that perks give people a way of participating in your campaign. They tap into selfish motivations as well as benevolent motivations. And they let you access your supporters’ spending purse, not just their philanthropic purse — you can guess which of these is bigger.

So what perks should you offer? 

Well perks tend to fall into three categories:

  1. Pre-release products or services: ‘Selling’ products and services via crowdfunding is probably the most common type of perk. Whether it’s tickets to your eventmembershipsCDsbee-hives or even crepes, forward selling products and services is a great way to get people involved in your project.
  2. Unique experiences: Most social cause organisations don’t realise it, but they are nearly always an amazing repository of wonderfully special, unique experiences. It could be dinners on a rooftop gardenworkshops on a farmtickets to an opening party, or even locating a tattoo on a founder.
  3. Special recognition: An oldie, but a goodie. Getting their name on or sponsoring a part of a project is still popular among some crowds. The key here is being creative on what can be sponsored. Edgar’s Mission had barns, rocks, rakes, posts, shelters and even a mountain.

 

So, how do I come up with perks for my campaign?

This might sound obvious, but the easiest way to come up with perks is to co-design them with potential donors. Edgar’s Mission ran a workshop with some of its key volunteers prior to its campaign to come up with their perks. Spacecubed did the same with their members. It’s best to have a hypothesis on your perks as a starting point, as well as the levels you need perks at (normally $25, $50, $100, $250, $1000, $2500, $5000)

 

Some other considerations

  • Perks which are directly connected to your campaign, which let people participate in your campaign/project are far better than unconnected perks (eg. Amazon gift cards,
  • Having an early bird offer on your perks is a great way to build momentum. Spacecubed – a co-working space in Perth – released a very limited number of highly discounted memberships in the first 24 hours of their campaign
  • Some perks (like drugs, illegal stuff, raffles) are not allowed. Make sure you check our terms to stay on the right side of the rules.

Does anyone really care about Asylum Seekers?

Very few of these illegal boat people would not get into the country by legal means, they bring violence to them which is obvious from the start in the detention centres.They cost us millions in education, accommodation, health & security.

– Linda

Sometimes when you read the comments section on any‪ news.com.au article on refugees, you could be forgiven for thinking that you’re all alone in being compassionate towards people fleeing for their lives.

You’re not. There are millions of others who feel the same way.

And now, thanks to Jason Koh and his ‘People Just Like Us’ campaign, people like you can buy a banner like this one, to show your colours and show your compassion.

It’s a really simple way to remind our community, that we’re here to‪ #‎AdvanceAustraliaFair‬ – not to ‪#‎ReclaimAustralia‬

https://www.chuffed.org/project/people-just-like-us

(This photo is from Alex B’s house – thanks for sending it through!)

New feature: Collect your donors’ addresses

Chuffed.org Workshops

We’ve just released a new feature on Chuffed.org to save you time and to help you get those fantastic perks to your donors even quicker.

After talking to a number of campaigners, we realised pretty quickly that while getting hundreds of donors is great, it becomes not-so-great when you have to collect hundreds of postal addresses to deliver them perks.

Some campaigners told us they spent several days just following up with people to make sure they had the right details.

So, we decided to find a way to make that whole process even simpler for you. Now, in your Chuffed.org campaign backend, you can choose to collect addresses from your donors.

 

Collect addresses from your Chuffed.org donors

We’ve even put in some smart internationalisation features to make sure addresses format correctly for your international donors.

This feature is now available to all our campaigners, and it’s up to you to decide whether or not you want to turn it on.

 

Some common questions

 

1. Will I be forced to collect addresses?

Definitely not. Our default setting is not to collect addresses, and that will remain so. If you don’t collect addresses, everything on the payment form will look exactly like it does right now.

 

2. I’m running a political fundraiser and need to collect addresses for compliance reasons. Can I use this feature?

Yep. This is definitely the way to do it if you need to meet your compliance requirements.

 

3. Should I collect addresses just to put into our CRM?

We are against collecting information that you don’t really need or intend on using. We think you should only collect addresses if there’s a good, clear reason to do so.

Two Million Dollars Raised on Chuffed.org

You may remember back in September we announced that we hit our first $1,000,000 through the platform. Well since then, things sped up, and we’re really excited to announce that we’ve now hit $2,000,000 donated to Chuffed.org campaigns.

We were blown away by the first million dollars coming in in 11 months since we launched, but this second million was even faster – it took under 5 months!

For the stats geeks amongst you:

  • Donations came from 49 countries
  • The average donation through our credit card system was $94
  • The biggest campaign raised $162,000; and
  • We now get >50% of traffic coming from mobile/tablet devices

None of this would be possible without your amazing support and trust. We can’t thank you enough.

2015 is set to be a very big year for Chuffed.org – with international expansions underway, and new product expansions on the horizon, we’ve got a lot to keep us busy. But first off the rank will be some feature releases that many of you have been asking for. Stay tuned.

Thanks once again, and if we can support you for any of your campaigns in 2015, please feel free to reach out.

Chuffed Love,

Prashan, Liv, Seb & Katie, and all the Chuffed.org family

How to raise $15,000 in 50 hours – includes email templates and tools

Rob Caslick

In early 2013, when we were on the hunt for our very first crowdfunding campaigns, I met up with Rob Caslick in a rather unglamorous hotel lobby in King’s Cross, Sydney. Rob was an engineer by day but at night transformed into volunteer-extraordinaire, running a weekly Organic soup kitchen for 50 people at his parish church.

We chatted about a potential campaign for the soup kitchen, but it wasn’t until November that year when Rob approached us about a Refugee Rooftop Garden he wanted to crowdfund, that we really got down to battle planning.

Rob launched their campaign on December 2. In 50 hours, he’d hit his target of $15,000. By Christmas he’d raised $30,000, been featured in the Sydney Morning Herald and ABC Radio, and was fielding calls from the 7:30 Report and TV celebrities wanting to be part of the campaign.

Here’s how he did it – in his own words

_______________________________________

HOW TO RAISE $15,000 IN 50 HOURS

To say that the Refugee Garden had a long incubation period would be a massive understatement. I had been talking up the idea for 12 months to anyone who’d listen but it wasn’t until a meeting with the Jesuit Refugee Service (JRS), which is located directly above the Soup Kitchen I ran, that the idea for the Rooftop Refugee Garden idea really became a reality.

Then of course there was the issue of money. We had planners cost out the project and the absolute minimum we needed was $15,000. We did the usual thing of applying for grants, but when they didn’t work, we turned to crowdfunding.

The team at Chuffed talked us through exactly what we needed to prepare to make the campaign a success and since I have a military background, I thought I’d theme the campaign as a military battle.  It added an element of humour to the campaign (at least to me).

Here’s my battle strategy.

_______________________________________

Tactic A: Multiply myself with foot soldiers (worth $5,000)

By myself I could only raise so much, but with 10 of me, we’ll clean up

After stripping my Gmail contact list and realising I had about 500 people to send the campaign to, it became pretty clear that only sending the campaign to that list was going to be a failing strategy. The team at Chuffed suggested that I needed a list closer to 3,000 people to make the campaign work and the only way to do that would be to recruit more people to the cause.

Step 1: Recruit your soldiers

I knew foot soldiers for this campaign were going to come from three sources:

  1. People involved in the project:  I  had the full project team commit early – the landscape architectural company produced a budget, the structural engineer looked for drawings and started to comment on how much weight we could hold.  All of these people became automatic soldiers.
  2. The super keen-beans: While I’d been talking up the project to anyone who’d listen, I kept note of the ones that got excited. They also became automatic soldiers.
  3. General recruitment: One month before launch date, I sent this recruitment email to my 500 Gmail contacts:

Sat, Nov 9, 2013 at 6:41 AM

Subject: Rooftop Garden update and Invitation to tour Wayside Chapel Rooftop Garden

Hello team,

We are about to launch a crowd funding campaign to raise the funds to build our garden above JRS. I am looking for some campaign soldiers. You get a free Refugee Garden T-shirt and all I ask is that you send out an email to all your work colleagues and friends on December 1st. Asking them to donate to our project. The email will be a link to the campaign website (www.chuffed.org) where we will be hosting our campaign.

I met with Indira Naidoo who set up the Wayside Chapel Rooftop Garden yesterday. She has invited us to tour the garden with reverend graham long. They have a great garden with bees and indigenous herbs.

The tour needs to be a Thursday and I have penciled in November 28 at 5pm. Let me know if you would like to be involved.

Rob Caslick

Four weeks out from the campaign, we’d recruited 15 foot soldiers.

Step 2: Engage your foot soldiers like crazy

These 15 foot soldiers were pure gold. They were our first donors and our biggest evangelisers. I wanted them to feel part of the inner circle – like they were part of the team, not like I was asking them for something.

We did three things with them:

  1. Three weeks out, we sent out the campaign to the soldiers and asked them for feedback.
  2. Two weeks out, we  personally called every soldier and ran them through what the attack plan was.
  3. 7 days out, we leaked the video to the soldiers and updated them on the great contribution of other soldiers so far.  The email was really the first call to action.  We asked the soldiers to send out the link to all of their friends now and be ready for battle on the next Monday – Launch Day.  I made it super-simple for people to share the campaign by actually typing up an email for people to use.  Honestly, it felt a little controlling but I thought it would help to maintain a unified message.This is the email we sent:

Date: Tue, Nov 26, 2013 at 6:47 AM
Subject: St Canice’s Rooftop Garden for Refugees – “Meet James”

Hello Soldiers,

Thanks for offering to go into battle for the Refugee’s Garden in Kings Cross.  The campaign runs for December and January,  but our target is to raise $15k by Christmas. This gives us about three weeks starting Monday December 2.

We need to go in hard.

We have selected the finest 15 soldiers.  Your campaign mission is to raise $1000 each and/or send the campaign link out to 500 people.

We have had a lot of support so far.

1. Corporate Katrina Torres has designed a cool tshirt for people who donate $50

.  Sargent Christine Manfield (celebrity chef and author) has offered to cook for the first 40 people to donate $150. Dinner will be in the garden mid Feb 2014 (no pressure).

3. Lieutenant Danielle Zorbas has put together the attached campaign video.  Thanks also to Frances Yeoland for her graphics, Dappled Cities for the music and Mr James for being part of this campaign.

VIEW 3 MINUTE VIDEO HERE

Your first mission: Please can you send out an email to your friends, colleagues and clients this week, with a link to this video introducing them to James and establishing the need for the garden.
For convenience I have typed up the below email for you to copy paste.  (Feel free to amend to suit).

The campaign goes live on Monday December 2.  We will ask you to send a follow up email on Monday afternoon to officially launch the campaign and to start collecting donations.

Feel free to call me with questions or comments.

A sincere thank you again for being part of this.

Rob Caslick

____________________________

 

Dear ????

Meet James.  A new resident of Australia.  From arriving by plane, James had to wait almost 5 years for his refugee application to be processed. He suffered depression and anxiety.

His story is common.

To help James and other Asylum Seekers living in Sydney we are building a garden. The aim of the garden is to provide a place of meaningful and familiar activity.  An opportunity to give back to the community by growing foods for the soup kitchen below.  An opportunity to start engaging with the community and improving conversational skills.

Please watch and share this 3 minute video we have created.

http://youtu.be/60585gUgzi0

Our goal is to raise a total of $15,000. All help welcome.  Our campaign starts next week.

We are offering the following perks to donors:

1. Donate $50 and receive a Refugee Garden t-shirt,

2. Donate $75 and receive tickets to the cocktail opening of the garden,

3. Donate $150 and receive tickets to Dinner in the garden with Christine Manfield $150 (40 tickets only) date mid feb

4. Donate $250 and receive 1 x Garden Membership (Cocktail + Dinner + Tshirt)

5. Donate $2000 and be an official Garden Sponsor (4 x garden memberships plus recognition on plaque. Plus invitation to future harvest events)

6. Donate $5000 and be an official Garden Founding Partner (4 x garden membership plus greater recognition on plaque and invitation to future harvest events and free hire of the garden for corporate event)

 

Please help raise awareness by sharing this video and campaign with others.  I will email you again on Monday when the campaign goes live

Regards

Soldier A

 

You’ll notice that I quite explicitly talked about the actions that other soldiers had made. This was deliberate. Talking up the contribution soldiers have already made, inspires the other soldiers to action.

If we had more time we would’ve had a launch party with the soldiers. By the Friday before launch, I had soldiers calling me up asking me when the damn campaign would open – all their friends were already asking them how to donate. To keep the momentum (and the suspense) up, I sent out this email to the soldiers:

Date: Fri, Nov 29, 2013 at 5:59 AM
Subject: Early Success

Soldiers,

Well done.  Our preemptive strike has been successful.

Many people are already emailing me wanting to donate.  Once the campaign goes live donations are simple.

The plan now is to finalise our online crowdfunding campaign.  I plan to do this on Saturday.

On Monday please be prepared to send out your emails again.  Studies suggest that people are more ‘giving’ after lunch.  I aim to send some out at about 130pm. Tuesday’s after lunch are also a good time.

Rob

 

Step 3: Launch hard or go home  

“Every battle is won or lost before it is ever fought.”

– Sun Tsu: The Art of War.

The first three days are do or die. If you don’t get to 30-40% in your first few days, you’re dead in the water. Since we didn’t really have our own list to launch to, launch day was all about getting the foot soldiers revved up. Again, I used the pre-written email tactic to make it super easy to share:

Date: Mon, Dec 2, 2013 at 7:05 AM

Subject: It’s almost time

Soldiers, Time to break out the face paint.

The campaign goes live at 1pm. Our campaign message: We understand Christmas is a time of giving. If you give to one charity this Christmas, please give to us.

Here is the link to our campaign. https://www.chuffed.org/project/rgkx/

From 1pm, please also copy the link into your social media or press share/like when you see others have done it. I have typed up the below email for you to send. Feel free to amend to suit or create your own.

A sincere thank you for your support in the campaign so far. See you on the other side!

Rob Caslick

__________________

 

Dear Friends/Colleagues,

It can take five years for a refugee application to be processed. This means five years in limbo without work permits and without meaningful, five years of vulnerability, without family and friend support networks.

We are building a rooftop garden for these asylum seekers. But our rooftop garden will grow more than food; it will grow opportunities. Opportunities for refugees to participate in familiar activities and grow traditional foods. Opportunities for meaningful activities during periods of uncertainty. Opportunities to increase self worth. We understand that Christmas is a time of giving.

If you give to one charity this Christmas, please give to us. It’s not all about giving, in return for your donations, we are offering t-shirts, a dinner with Christine Manfield, a cocktail reception and garden memberships.

Click here for more: https://www.chuffed.org/project/rgkx/

Soldier A

 The result was extraordinary. We raised $4,724 in our first day. A third of the way there.

Step 4: Keep the momentum going by keeping your soldiers updated

The momentum of Day 1, spilled over to Day 2 and by the end of the day we were just shy of $7,000. Thanks to Tactic 2 (below) by Day 3, we hit our target. At each milestone, I emailed the soldiers to keep them excited – everyone loves to be part of a team that’s winning.

Here’s the email after Day 2:

Date: Wed, Dec 4, 2013 at 5:50 AM
Subject: Almost half way

Soldiers

You have fought well.  In just over 36 hours we have raised $6734.  We have only 7 tickets to Christine Manfield left!

This afternoon back up arrives.  An email goes out to the entire Parish of St Canice’s. If you yourselves were going to purchase tickets to Christine [one of the perks] please do so before 2pm.  If you can’t and would like me to put a ticket aside for you, let me know.

Rob

And here’s the Victory email, where we decided to raise the bar:

Date: Thu, Dec 5, 2013 at 5:36 AM

Subject: Victory – $15,000 raised.

Soldiers, you have fought a great fight.

Together we raised $15,000 in one of the fastest social crowd funding campaigns in Australia. Congratulations, to each one of you.

No doubt, there will be more battles to fight. But with the huge support we have had it gives me confidence and courage that we are on the right path. I look forward to sharing the journey with you.

As a thank you, I have added your names down for a t-shirt and a ticket to the opening cocktail event. The intention is to leave our campaign live and go for $20k. An additional 5k will allow us to build a pergola with hanging vines and a seated area for reflection.

A huge thanks to our friends at Chuffed.org. They have mentored me in this campaign and also provided us with a $1,000 bonus. (2,000 if we get to 20k). Enjoy your day.

Rob Caslick

 

Tactic B: Leverage the influencers – people who care about the same things that you do but have far wider reach (worth $8,000)

The second part of our battle plan took a very similar approach to the first, but with a different audience – the influencer organisations. We had been working with quite a few partner organisations at the Soup Kitchen for quite a while and I knew they were extremely influential in the food industry.

Two months prior to the campaign starting, I began engaging with two large influencers (Food Connect and Feather & Bone) about the campaign. I asked them if we could add their logos to our Chuffed page to add credibility and weight to our campaign and then asked if they could send out the campaign to their mailing lists.

Here’s an example of the email I sent:

Date: 27/11/2013, at 12:26 PM

Subject: F&B Logo

Hi Grant and Laura,

The campaign for the garden will go out to quite a few people next week.  I was thinking to put the Feather & Bone logo as a supporter of the kitchen and garden.  Is this ok with you?

Rob

 

I can’t overstate how important the support of these influencers was to our campaign- and in particularly the email that they sent out. They multiplied our reach several fold, celebrated our victories with us, and added credibility to the project.

Click here to read the email that Feather & Bone sent out to their mailing list.

And here’s what happened when these two influencers sent out their emails:

The Welcome to Australia team (a refugee support organisation) also helped by reposting our campaign on their Facebook page – the post received 455 likes and 28 shares.

All these influencers had one thing in common – they all cared about an issue that we also cared about. Luckily for us our campaign hit two big issues – food and refugees.

Our main lessons

So, all in all, here’s my top 5 things I think you need for success:

  1. Listen to the guys at Chuffed.  Without doubt their advice helped us raise more money.  They have done this many times before and actively helped us better engage our audience. They did everything from helping us write emails and media releases to campaign strategy advice to fielding calls from the media.
  2. The campaign is won or lost before it begins.  It is all about the four weeks prior to the campaign and how you launch. If you don’t launch hard, you won’t make it.
  3. Multiply yourself.  Allow other people to own your campaign.  Don’t just ask people to donate, ask people to treat the campaign as their own and have them raise funds for you.  The more ownership they have the more money they will raise.
  4. Engage the influencers.  Our campaign had a huge kick once the influencers told their audience.  The best influencers are people who already support you, but next in line are people that care about the same issues you do. Involve them early, make it easy for them to share your campaign, and you’ll be amazed how much their support will mean.
  5. Confidence matters. When you communicate to your soldiers, you have to remain in control and remain confident of success. You don’t start a battle by telling your soldiers ‘if we’re lucky we might win this one’.

And finally, running these campaigns is hard work, particularly if you’ve got a day job! Just check out the times those emails were sent! But it’s also extremely rewarding – we didn’t just raise $30,000 for our garden, we built a whole community around it.

That’s the power of crowdfunding.

– Rob Caslick

New Feature: Team Crowdfunding

Chuffed.org Workshops

Today we’re very pleased to announce a whole new way to crowdfund for social cause organisations. But before we do, some back story.

We firmly believe that crowdfunding is a team sport. It’s about starting with a core bunch of people who are passionate about your project (the champions), giving them something worth talking about and then making it easy for them to talk about it.

This ‘champions’ strategy was what Rob Caslick used to raised $30,000 for the Refugee Rooftop Garden and what Shanil Samarakoon used to raise $17,500 to build an Earthship Community Centre in Malawi.

And so, we wanted to create a product that recognised these ‘champions’ for their effort and supported them to raise more funds.

This is where ‘team crowdfunding’ was born.

So, how does it work?

At its simplest, team crowdfunding gives each of your champions their own crowdfunding page that’s connected with your main campaign page. The team pages can be customised by each champion and they inherit any perks from the main campaign.

Check out an example here: www.chuffed.org/project/the-welcome-dinner-project/

Who’s team crowdfunding best for?

We think team crowdfunding’s perfect for not-for-profits and social enterprises who:

  • Are worried that they don’t have a big enough audience to launch a crowdfunding campaign
  • Want to leverage their supporters’ audiences to get noticed
  • Are keen to be innovative with their fundraising

So how do you get started? Well just shoot us an email at [email protected] and we’ll give you access for your campaign.

5 steps to writing an awesome non-profit crowdfunding pitch

Girl Writing

Every day we get a whole heap of crowdfunding pitches from non-profits and social enterprises, which vary from the very good to the very crap. We’ve seen it all, from the three-line-’people-will-get-it’ pitch to the boring-10-page-grant-application pitch (hint, both miss the point).

To make it easier for you, we’ve broken down crowdfunding pitches (and any non-profit pitch, really) into these 5 steps and given you an example from a real campaign:

1. Context – Set the scene Zoom right out and set the scene for your audience. Many of them will already know this, but it moves their brain into the right frame to introduce what you’re doing. In 2010-11 Australia had 54 396 applications for refugee status, mostly from conflict-torn areas,
2. Issue – Explain what the problem is in the current context 

 

Normally there’s something broken in the current context or there’s an opportunity – whichever it is, tell people what the issue is, before you tell them how you’re going to solve (or take advantage of) it.

But we take forever to process their applications – more than five years in some cases. This means five years in limbo with nothing meaningful to do, and five years of vulnerability, without family and friend support networks.
3. Solution – What are you doing to solve the issue? 

 

This is where you talk about what you’re going to do. Keep it simple and specific. Avoid non-profit buzzwords that no-one really understands (seriously, don’t do it).

We are building a rooftop garden for these refugees to volunteer at.
4. Impact – How will what you do change the world? 

 

Here’s where you talk about how what you’re doing will make a difference.

Our rooftop garden will grow more than food; it will grow opportunities. Opportunities for refugees to participate in familiar activities and grow traditional foods. Opportunities for meaningful activities during periods of uncertainty. Opportunities to increase self worth.
5. Ask – How much do you need and what are you going to spend it on? 

 

And always end with an ask. Be clear on how much you want to raise and what you’re going to spend it on.

We need $15,000 to build the garden and we’ve got some awesome perks for those who help us raise the funds.

And that’s it. You can use this same flow for your pitch video too. Simple.

How to increase your donation page conversion by 1500%

Girl looking at ipad

We’re obsessed with conversion metrics at Chuffed. Seriously, we A/B test everything. Colours/sizes/positions of buttons, call to actions, payment flows – they’re all constantly being improved and a result we’ve increased conversion 15 fold. That’s not a typo. And we don’t mean 15%.

Here’s how we did it and how you can apply it to your own donation page:

1. Don’t make people create an account before they donate

You know that thing when you click ‘Donate’ and you get redirected to a ‘Create an account with us’ page.

If you’re doing it, stop. Right now.

Ok, confession time: when we first started, we copied every other crowdfunding site and made account creation compulsory before you could donate. Big mistake. When we redesigned the site in October 2013, we completely removed the account creation step and conversion dramatically improved.

Turns out that this new flow:

Donate -> Enter your payment details -> Thanks for donating

Works several times better than this flow:

Donate -> Create an account -> Enter your payment details -> Thanks for donating

(Actually most crowdfunding sites use this flow, which is even worse):

Donate -> Confirm donation -> Create an account -> Enter your payment details -> Thanks for donating

Oh, and we still create accounts for people, we just do it while their donation’s being processed.

2. Make the donation button red

Ok, so there’s nothing magical about red, what’s important here is that your donation button should stand out from the rest of the page. If people are looking for it, don’t make it hard for them to find it. The easiest way to do this is with colour contrasts – make most of the page a dull colour, and make the donate button a bright colour.

We tried a range of colours on our page and we found that red increased conversions by about 50% from our original green.

3. Be transparent – tell donors where their money’s going

I sometimes think we’ve been so smashed around about administration costs in the NFP sector that we’ve taken to talking in obscurities about where money is going to be spent.

One study* that we came across said that only 4% of charity websites actually tell people what their donations would be spent on.

We strongly believe that telling people at the point of donation what percentage of their money is going where actually helps conversion. We believe in it so much that instead of hiding fees seven levels down on our website or in some obscure section of our Terms & Conditions, we decided to make it clear on the payment page what goes to the charity and what (if anything) goes to us.

Here’s a shot of what it looks like:

A final note

Every page is different and it’s difficult to know exactly what’s going to increase conversion on your page, so it’s absolutely critical to guess, test and update (and then do it over again). We use Visual Website Optimizer to do all our A/B testing but there’s other great tools like Optimizely and Google Content Experiments that have relatively cheap plans.

*Source: Donation Usability: Increasing Online Giving to Non-Profits and Charities, Jacob Nielsen

Is your not-for-profit boring on Facebook?

Chuffed.org Workshops

The setup: I was sitting down with a friend who runs a $10m not-for-profit the other day talking Facebook. He knew they needed to be on Facebook, he said, but what exactly was he meant to do when he got there.

“Is it just about pushing out our content? How do we get above the noise of all the other stuff online? And is it an awareness tool or a fundraising tool?”

The challenge: Review 400 Australian not-for-profit and community fundraising pages and figure out what the good ones (and the crap ones) did.

The answer: So first we had to figure out what our definition of “good” vs “crap” was (hint: it’s not number of likes). We decided to go for an engagement-driven metric, what we called “The Facebook Engagement Ratio (FER)” which is:

(Head down to the bottom of this post if you want to see if your Facebook page FER is any good)

And then we looked at the top 10% and the bottom 10%. Here’s what we found out:

1. Entertainment and news trump information

Pages with content that’s entertaining and news(y) kill pages that are full of information. If I’m going to find out what first aid I need if I have a snake bite, or how to improve my cardiovascular health, I’m not going to go to your Facebook page. Sorry, but Google works fine for that.

If I want to find out the latest about a detained Greenpeace protester, or get cuteoverloaded with pictures of endangered orangutans, Facebook’s the perfect medium.

2. It’s not about you, it’s about them (and what they care about)

Pages that served up content about the issue people cared about, rather than about their own organization won every time. The truth is people care more about the issue than they do about you, so stop serving them up stuff about you.

The guys at The Animal Welfare League of Queensland get this (https://www.facebook.com/AWLQLD) . They get that their audience cares about animals finding new homes – so they post up stories about …. animals finding new homes:

3. From a person, not an organisation

Pages that had posts that sounded like they were from a person, rather than sounding like they had been filtered through “corporate communications” speak worked much better.

Like this:

Not this:

And finally, how good is your FER?

If you’ve calculated your FER, and want to know if it’s good or bad, here are the stats:

  • Average FER: 6.5%
  • Range: 0% – 57%
  • To be in the top 10%, you needed an FER higher than: 13.5%
  • To be in the bottom 10%, you needed an FER lower than: 0.76%

And just in case you’re wondering, higher likes correlates with lower engagement:

Quick note: ‘people talking about this’ moves pretty frequently, so maintaining a high FER takes ongoing effort i.e. you can’t like-farm your way to an engaging Facebook page

And that’s a wrap on our first blog post and we’d love to know what you think. Please leave your comments below.