December 7, 2007

Web site aims to be Craigslist of fundraising

BOULDER – Carol Meier, whose children go to Boulder’s Bridge School, raised $450 for a school projector without leaving her house or pressuring co-workers.

Other people report the same success stories for soccer tournaments, trips, CD projects, filmmaking, pizza parties, scholarships, helping foreign orphanages and just about anything else. They do it without door-to-door solicitations and no traditional fundraising.

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They do it with Crowdfunder.com, a site that enables communities to raise money. Users go online to post an explanation of their funding needs. Donors click a button, and their contribution is dispersed to the proper accounts. “If it had been hard I would have given up,” Meier said.

“You generate the cause, and if you don’t make your financial goal the contributors get a refund,´ said Joe Pezzillo, CrowdFunder’s co-founder and marketing director.

CrowdFunder, launched in October at Boulder’s New Technology Meetup, began while Pezzillo, Dave Rogers and a few others brainstormed about how to make the world better and make money at the same time. With Pezzillo’s background in innovative broadcasting startups and Roger’s experience in marketing ventures and as former publisher of The Onion, they had the entrepreneurial drive.

“We thought, ‘Wouldn’t it be cool if a band like U2 could play a private Web concert to those who contribute to financial goals in Africa?’ Then (we thought), ‘Let’s build a platform so people can play live over the Internet,'” Pezzillo said.

That morphed into a site where anyone could raise funds for anything. “We don’t dictate the content as long as it’s legal,´ said Rogers, CrowdFunder’s president and chief executive. He said frivolous, personal and charitable causes all have equal footing on the site.

With $375,000 from Littleton-based Waveland Colorado Ventures, the entrepreneurs built a prototype focusing on hyperlocal communities.

People posting on the site e-mail their friends who tell others.

“There has to be a high level of trust to contribute money. If you see recognizable names on the site as donors you’re more likely to give,” Rogers said.

CrowdFunder has several hundred users who have raised approximately $10,000 in the first month in the metro area. Even Tom Chenault, the host of Business for Breakfast radio show, uses the site to raise money for homeless shelters.

“If you reach your goal we’ll take 7.5 percent,” Pezzillo said. “We’re not making money now. All funds are going to advertising expenses and perfecting the business metrics. We’re still proving the concept.”

The founders noticed that within two weeks of the site’s launch, key users were schools. The Boulder High School athletic department, the Bridge School and middle schools all had needs. Teachers traditionally reach into their own pockets to meet those needs, Rogers said. According to Denver-based Quality Education Data, teachers spend $4 billion of their own money each year to buy supplies for their classes.

“There is a clear need to have a separate school site as parents are not comfortable with nonschool-related activities,” Rogers said.

In early 2008, Pezzillo and Rogers are planning to launch SchoolFunder.org to help teachers save their money.

Meier is thrilled. “I love that they’re breaking out so our donors don’t have to wade through those other, sometimes weird, postings (on CrowdFunder).”

Earnest Mathis, manager of Waveland Colorado Ventures, said his group will invest an additional undisclosed amount into SchoolFunder and CrowdFunder before the end of 2007 and again in April 2008. An unnamed Boulder investor also infused a sizeable, unrevealed amount.

“We liked the space they’re going after in the social networking world,” Mathis said. “It makes sense since there is a phenomenal amount of money spent by teachers, parents, schools and individuals for various objectives. SchoolFunder is also poised to take off in a big way.”

Derek Scruggs, founder of community-based sites such as Enthusiast Group, said the challenge is Web site traffic.

“How do you get people to interact? What is the social value? Communities thrive on a core that keeps coming back. (CrowdFunder) has tools to disperse funding to blogs now. How do you get a million donees to put it in their blogs?

“If they can get into nonprofit association publications and blogs, PTA newsletters and e-mails, people will come to their site indirectly through those venues. The mega-trend is increased creation and distribution of information with decreased transaction costs. Nonprofits are always broke, so this fulfills a compelling need. CrowdFunder is targeting grassroots elements. If they are successful, they can dominate.”

Rogers agreed.

“By this time next year, we’ll be similar to Craigslist with hundreds of individual markets under CrowdFunder and SchoolFunder. We’ll also license out our technology. We’ve been approached by companies to incorporate our site into theirs.” He added that there will be other undisclosed business activity in 2008.

“We can make a difference in the world. Isn’t this what the Internet is for? It’s about empowering community, leveraging technology and adding financial accountability.”

BOULDER – Carol Meier, whose children go to Boulder’s Bridge School, raised $450 for a school projector without leaving her house or pressuring co-workers.

Other people report the same success stories for soccer tournaments, trips, CD projects, filmmaking, pizza parties, scholarships, helping foreign orphanages and just about anything else. They do it without door-to-door solicitations and no traditional fundraising.

They do it with Crowdfunder.com, a site that enables communities to raise money. Users go online to post an explanation of their funding needs. Donors click a button, and their contribution is dispersed to the proper accounts. “If it had been hard I…

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