Lessons from a crowdfunding social service project

We started a crowdfunding project to construct a home for a family whose house got washed away during the Kerala floods 2018. This was our first experience in a crowdfunding project. Here are the lessons we learnt out of this project. 

Credibility of the idea and the promoters are the key success factors for every crowdfunding project.

Credibility of the promoters is the most difficult to achieve. It has to be built over a long period of credible track record.

During execution phase of the project, trust of all the stakeholders have to be built by bringing in absolute transparency of the project (funding, expenses, project progress, project risks, forecasts of time and cost). This is achieved through continuous communication. We used whats-app group, facebook page and the wordpress blog for this purpose.

Probability of scope creep is much higher in crowd funding projects, as the expectations of the beneficiaries escalate during the project execution, when they understand that it is funded by multiple people , hence the illusion that there is plenty of money.

There has to be a key project manager, who owns the entire project, and accountable to the sponsors.

For one of our projects, we started raising funds from people. Then another sponsor who was willing to sponsor the entire project turned up, scuttling our initiative to generate public interest in the project. In fact we started receiving donations for this project and we had to get the permission from the donors to use the funds for another similar project. Getting a single sponsor is good for the beneficiary and at the same time it is a risk for crowd funding.

Ensure that the beneficiary have not sought / applied or is eligible for any alternative funding, before going for crowd funding. Other wise it will lead to point 6. Sometimes we will be preventing a better opportunity (funding) by linking them to your crowdfunding project. There are many larger sponsors out there. So please check whether the project under consideration is eligible for any other source of funding.

Funds have to be distributed against the milestone completion only. Pay it directly to the vendors and service providers. Do not entrust money to the project beneficiary, as it can be misused.

If we are constructing a new house, the risk is very low compared to demolishing an existing house, as the ownership of raising sufficient finding to complete construction falls on the project manager. In such cases, do not even start without sufficient funding required to complete the project.

In new constructions, we have the freedom to start developing and show progress as soon as funds start coming in. This in turn will generate more interest among the sponsors, resulting in better funding.

We started with one project (home for a person whose house was washed away during the floods) based on impulse and intuition. That gave us more confidence to venture into the second project, and the funnel is growing. It would have been better if we had managed it as a program, with a standard design, bill of material, budgeting and funding for the program, than for individual projects. In this case we could have raised funds against the program, instead of individual projects.

Hope to come out with more lessons learned as we progress further.

Visit the crowdfunding project web site 

Congratulations Shashi PMP

Hi Abrachan,

Yesterday I took my PMP exam and I cleared it. Thanks a lot for all the support you have provided through out.
Your method of teaching made the entire curriculum look easy. I was able to understand every bit of it. The face to face interaction with you makes it more easy.Thank you for making yourself available as and when I needed to go over be it same topics or new topics or just to answer my questions on the already covered topics. In your method i dint have to by-heart any aspect of the PMBOK. One good thing about your method is we will be going over the
entire PMBOK at least once.
The vast curriculum of PMBOK makes it very difficult to even start the study. With so many reference books available we can easily get lost in picking the right path for the certification. But your method clearly defines a path and if we just follow it we can easily not only get certified but also gain and improve on our Project Management knowledge.
With your class and using Rita’s book as reference and answering all the question in the Rita’s book was more than sufficient to give the exam and clear it.
Thanks a lot of all the help you provided.
Thanks & Regards,

Shashi