Kickstarter Project Managers Must Take Lessons From Nonprofits

As readers may know, before I wrote about video games, I worked in the nonprofit industry for a number of years. I raised money and, in one of my favorite positions, I helped give it away to groups with worthy projects. In a previous position I was responsible for distributing state grant funds both in a local capacity and as part of a government panel of experts. The lessons I learned doing this can be applied to Kickstarter.

Before Double Fine married the gaming world with crowd funding, Kickstarter was (and still is) a hotbed of cultural activity. Just as developers have traditionally contended with the publisher model, artists typically needed to have fiscal sponsorship by a 501(c)(3) in order to more easily raise funds.

Under that section of the tax code, contributions are tax deductible, which is a major motivating force behind charitable giving. Without that status, going to complete strangers with a letter or short grant proposal was rarely successful.

Kickstarter allows artists to present their work to interested parties from around the world who might be willing to help see the projects completed, just as it has allowed developers to get in front of gamers. Even though the barriers to funding have fallen, the rules of fundraising and project management have not. 

There are some simple rules that Kickstarter project managers of all disciplines should consider when assembling a proposal.

Be Honest
Above all else, project managers must be up front with potential backers about the strengths and weaknesses of the project. Kickstarter's "Risks and Challenges" section should not be looked at as onerous, but rather as an opportunity. The best projects are those in which the managers have taken the opportunity to be honest with themselves first.

Budget Wisely
Whenever I worked with nonprofit groups on budgeting, my first rule was simple. "Project your revenue low and your expenses high." Always assume that something is going to take more time than you'd like, and absolutely plan for financial contingencies. This includes backer rewards. The case of Star Command is one that should be drummed into every project manager's head. Backer rewards and fulfillment cost money. They must be part of the budget.

Don't Bite Off More Than You Can Chew
Too often, I see project scopes and stretch goals that evidence "mission creep." Rather than using funds for smart additions that are within the realm of feasibility, project managers frequently commit to too much before a single day of development has gone by. Stretch goals are dangerous, especially as they are often formed out of the excitement of unexpected success. Before committing, project managers should revisit the entire budget to make sure that incremental additions achieve economies of scale rather than yielding excessive expenses.

Fire When Ready
We receive many Kickstarter pitches every day. When making the decision to cover a project, I ask a set of standard questions. 

• Is the budget feasible?
• Has the project manager been honest about the challenges?
• Are there unanswered questions about the development cycle, other funding, or the experience of the staff involved
• Have the developers on the project actually shipped a game?
• Is the project just an idea or is it an in-progress endeavor?
• Does the pitch video show enough that I am confident the project will happen?

Provide Timely Updates During the Campaign and After
Do not alienate your backers. If something changes (good or bad), let your backers know immediately. Transparency is important, and it should be full. There are few things worse than being mostly transparent, but surprising your backers with a bit of bad news. Backers might not be investors in the traditional sense, but there is a perception among many that they are entitled to be fully in the loop. Whether you agree or not as a project manager is irrelevant, especially if you want people to fund you again.

When looking at Kickstarter projects, I need to have the confidence that managers have fully considered all of the contingencies and worst case scenarios. I want to know that the team has credibility and can deliver on promises. I expect that the big questions about execution are answered up front and don't require an interview with the developers.

We see many interesting concepts and few attractive projects. The more project managers do up front to answer questions, the easier it is for us to cover and for backers to fund. These are the same things I suggested to the hundreds of organizations I worked with as a grant maker, and though there are differences in the financial model, they apply to any group asking others for hard-earned money.

Note: This story was originally published on July 13, 2013.