I have an idea. But I don’t have the resources to fully fund my idea, so I would like all of you to pledge some money to help me bring this idea to life. Wondering what you get in return? Well, depending on how much you pledge towards my venture, I have various incentives I can offer you. Are you in?
If the premise above sounds familiar, that’s because it probably is. “Crowdfunding”, which is the practice of getting a large number of people to fund an idea, has been gaining in popularity over the last few years as technology continues to allow individuals to connect faster and more cheaply than ever. One of the more popular crowdfunding sites is Kickstarter, which allows anyone to submit an idea, and if accepted, receive funds from willing investors. Depending on the amount of backing an investor gives, the investor will receive some sort of benefit (in the form of a gift, a product, an experience, etc.) from the entrepreneur in exchange for his support. For an example, check out this famous Kickstarter project, which garnered over $10MM in pledges from nearly 70,000 backers.
Crowdfunding can be used across an incredibly wide and diverse spectrum: campaigns have been created for filming a documentary, recording an album, designing a tech product, and even making beef jerky. But can it be used in the professional sports space?
Given that people will use crowdfunding when they don’t have the revenue or the resources to achieve their end goal, and given the amount of revenue many sports teams generate, the typical professional sports team doesn’t necessarily fit the depiction of the traditional crowdfund entrepreneur. The LA Lakers or NY Yankees aren’t going to use crowdfunding to pay for their next CFO, or build a new LED display screen for their stadiums.
But the team could use crowdfunding to make an impact in the community. Departmental budgets are not an “always increasing” luxury, and community relations departments often have more projects they want to organize than they have the resources for. Why not use crowdfunding to support one of these local initiatives? Create a “crowdfund page” on your team website, drive people to donate money to the cause, and provide incentives that scale as the donations increase in size. For example, if you are trying to help refurbish the local homeless shelter, incentives for smaller donations might be a team yearbook, a team poster, or a player bobblehead. Larger donations could trigger such incentives such as lunch with the team president or a golf outing with player alumni.
What if the team also added in a corporate partner to the crowdfund? Now the corporate partner could also offer incentives of its own product/service. In addition to helping the community and giving back to the fans who donate, there is now a value add for the sponsor via the newly-created association between the cause, the sponsor’s product/service, and the funding fan.
The above is just one example of how crowdfunding could be used at a team level. It is not meant to supplant or bypass the current and traditional means of community involvement and support, but at a time when many community programs struggle to draw the budgets they truly need or deserve, crowdfunding could be a creative way for teams to help the community, the fans, and corporate partners, all at the same time.