The Writer and The Donor

Currently most weblit authors are publishing their work on a donation based business model. That is to say they hope to make enough money to support themselves by giving away the bulk of their content for free (yay!) and soliciting donations from their regular readers (>.>). There are some variations, but by far the most popular of the donation based revenue models is known widely as the “1,000 true fans” model. Put forth by Kevin Kelly (and some other people), the basic gist of the 1,000 true fans model is that if you have 1,000 people totally and completely in love with your work, enough to donate X amount of money a year (let’s say $100) then you will have an income.

I’ve written about my feelings towards donation based funding before: I hate it. I accept it as a useful tool in certain situations– specific one-time $$ goal, specific purpose– but not as a sustainable source of income for a writer that is reproducible year after year.

My problem with 1,000 true fans and its ilk is that it’s unbelievably simplistic and flies in the face of decades worth of fundraising strategy … it also does not account for human behavior.

Here’s the problem: 1,000 true fans essentially is an undefeatable proposition built on circular reasoning. What is a “true fan”? Some one who will spend money on you! Can a person be a “true fan” and not spend money on your work? No. So if I’m putting out my work and I have 1,000 regular readers, but $0 donations does that mean the “1,000 true fans” theory is disproven? No! The theory says, because you have 1,000 fans but not 1,000 TRUE fans … work harder, put out a better product, promote yourself more, get 1,000 true fans.

As I’m sure some of you have already figured out, fluffy-seme is not my day job. What I actually do for a living is finance and fundraising for nonprofits. So I spend a lot of my time working with revenue streams from donations and more typical business type activities. There’s a whole industry in asking people to give you money, it’s actually a bit more complicated than asking 1,000 people to give X amount of dollars.

Putting aside my personal feelings about writers asking for donations, I can see the appeal of it for a solo writer: it’s easy to set up, requires virtually no accounting or accountability, and so many writers and artists have tried it that it no longer stands out as audacious.

But at the same time, writers who want to try this strategy could benefit from learning a few basic lessons from the fundraising community. We’ve been doing this for decades as an industry … so I’ve assembled some food for thought here on how to approach donation based funding for success.

It’s Human Nature

My biggest problem with the “1,000 true fans” idea is that, even if you’re able to cultivate 1,000 people willing to support you financially how do you keep them? Two years ago I was a huge House fan, this year … meh, not so much. It’s not that the new season of House isn’t any good. Actually, so far I like it BETTER than the season where I was a “true fan”. So what happened? *shrug* Who knows? That’s the way fandom works, people do not stay “true fans” indefinitely. Instead they float in and out of stuff: obsessing for a time, then either losing interest altogether or getting distracted by something else. They may rediscover and return as a “true fan” later … or they may not.

In trying to beat the odds, there are two things that help hold fans interest: 1) community and 2) ownership. There have been dozens of studies about how having friends that are also fans helps intensify and extend commitment. It becomes something you bond over and share with other people. It hooks into your sense of identity. As for ownership, this can be dangerous territory. Think of the BNF (Big Name Fan) concept, the BNFs in a given fandom are so hyper committed because they feel like your serial is THEIR serial. They had some intangible role in its creation. Like I said, it’s effective but dangerous because fans committed to you this way can and often do either turn on the creator or other fans for the smallest perceived slights.

So the first question you have to ask yourself is in setting up your donation strategy is: how are you going to hold onto people as fans? Do not make the rookie mistake in assuming that this is about the quality and integrity of your work. Just as the traditional publishing world often prints crap and rejects gems, the quality of the material has very little influence over whether fans become hardcore. 

Why Do People Donate?

Fundraising theory states there are six things that motive people to donate. They are (in order):

1. Anger
2. Fear
3. Self-Interest
4. Exclusivity (perks for donating)
5. Curiosity
6. Validation (confirming you values)

Notice that nowhere on that list is anything about liking the work you’re donating to support. Nor is guilt or sympathy anywhere on that list either. People might give you a few bucks if you wave a picture of starving African babies in front of them (or in this case starving artists I guess), but they’re more likely to resent you and never give again unless the process of giving makes them feel validated in what they already believe. In fact, having worked as a canvaser in my younger days (just about the most horrible job you can have in fundraising) I’ve noticed guilt often makes people quite hostile towards you instead of charitable.

Little case study here: Cassandra Clare before she was a YA writer was a BNF Harry Potter fanfic writer. So one day her apartment is broken into and her laptop is stolen. Her fans cry “Oh noes!”, collections are taken up, donations made and the laptop replaced. Why did these people donate? Self-Interest. People donated in the hopes of creeping closer to a powerful inner circle in their fan community. You see this sort of thing all the time in the New York social scene: people trying to buy themselves into the upper class (the New York Public Library and the Met benefit heavily from this). It was just weird to see it play out in a fandom

But what was even more interesting is what happened AFTER. Like most BNFs Cassie Clare had just as many people, probably more, who hated her guts. Now seeing her get a free laptop from what they perceived as exploitative means, they were filled with righteous indignation and PISSED OFF. Long story short, these people took up a rival cause in the form of another HP fan who had been trying to raise money for her sick mother for months with no success. Once “Laptopgate” broke, the anti-Cassie Clare fans raised oodles and oodles of cash in just a few days (way more than what CC’s collection had produced I believe). Before they got angry, no one cared to give a dime. The sad sorry of a woman sick with cancer didn’t get sadder or more worthy over night, it had just stumbled upon the best motivation to get money out of people: anger.

Next time you get a fundraising appeal in the mail from a charity, check out the wording of it. They spend so much time talking up injustice and urgency because they are trying to make you ANGRY.

Different Donors Different Asks

Okay, hypothetically, let’s assume you do have 1,000 fans willing to give you money for your work … how much do you want? $5? $10? $20? $100? Undoubtedly, you’re thinking to yourself “as much possible!” and then you go and do something stupid: you set up a Paypal button where the donor can fill in the blank with whatever amount they want.

Thing about donors is most of them won’t donate unless specifically asked (best if it’s someone they trust, a friend for example), at which point they ask you “how much?” If your answer is “ohhh…. ummm…. how much do you want to give?” things get awkward and no donation is made. Don’t ask your donor to assess your needs, they don’t like doing that. Donors prefer to be told “please give [this much]” so that they can say yes or no, or maybe counter offer.

So how much?

Let’s go back to the previously suggested $100. Afterall 1,000 true fans x $100 dollars each = $100,000 <– Awesome!

And you tell yourself, if I update once a week … that’s really only about $2 per update. That’s not a lot at all! Certainly my true fans will donate $8+ a month!

Except the reality is your fans are not the Borg. Some of them are SUPER COMMITTED, some of them are less committed, most of them even less so. If you’re only looking for donations from the top tier of super committed fans (read: “true fans”), you’re not going to raise very much. You need to know the right amount to ask each potential donor.

But how do you figure this out?

Allow me to introduce you to the funding pyramid, the favorite tool of many a nonprofit. The funding pyramid breaks donors up into three commitment levels and then tells you how much to ask from them to reach your fundraising goal:

1. 10% of donors give 60% of your money
2. 20% of donors give 20% of your money
3. 70% of donors give 20% of your money

So let’s say we want to raise $100,000 from 1,000 people. We could ask for $100 from each one of them, but some people will be completely unwilling to give that much and a few of them might be willing to give more.

1. 100 people $60,000 = $600 each
2. 200 people $20,000 = $100 each
3. 700 people $20,000 = $29 each

Now if we were a traditional nonprofit these numbers would be just fine, but for an individual writer each benchmark no doubt seems more impossible than the last. So for cases like this I generally tweak the pyramid somewhat, keeping the $$ in each tier the same (in this case $60,000; $20,000 and $20,000) but setting a clear donation amount per donor for each level and solving for the number of donors I would need on each tier.

But it looks bad to offer different donation levels to different people in this case, so let’s also add donation increments. Now we have two variables to play with: how many donors we need on each tier and HOW OFTEN each donor needs to click the donation button in order to get from one tier to the other.

What’s useful about setting it up this way is that it allows you to track your readers and coordinate donation incentives better with your specific needs. I actually think the whole “I’ll write a special chapter for X number of donations” is a rather cute idea. If you know how close you are to your actual goal, which donors you need to move up in order to be successful and what their interests are, you can target your incentives for the greatest impact.

Anyway, so let’s look at our $100,000 goal again and let’s explore two scenarios: one where our donation button asks for a $5 contribution and one where our donation button asks for a $2 contribution.

At $5:

• Tier 1: $100 per donor at the end of the year = 600 Donors donating 20 times a year = $60,000
• Tier 2: $50 per donor year end = 400 Donors donating 10 times a year =$20,000
• Tier 3: $25 per donor year end = 800 Donors donating 5 times a year = $20,000

At $2:

• Tier 1: $100 per donor at the end of the year = 600 Donors donating 50 times a year = $60,000
• Tier 2: $50 per donor year end = 400 Donors donating 25 times a year =$20,000
• Tier 3: $25 per donor year end = 800 Donors donating 13 times a year = $20,000

Notice that in the end we’re drawing from a pool of 1,800 fans, an considerable upgrade from our original model, but $100,000 is a lot to raise on $5 and $2 increments. Of course now you’re saying to yourself “Hey $100,000 is a ridiculous income on writing alone” … so let’s rework the numbers using a more realistic salary for a writer. How about $40,000? The number of times we need people to click the donation button on each Tier don’t change, but the number of people we need on each level does:

• Tier 1: 240 Donors, $24,000 raised year end
• Tier 2: 160 Donors, $8,000 raised
• Tier 3: 320 Donors, $8,000 raised

Now we only need 720 Donors, 320 of them tossing us $5 five times a year.

There are lots of ways this model can be tweaked to give you clear goals of how much you need from who. I’m including an Excel document for those of you who would like to play (the changeable variables are in blue, everything else is determined by formulas). Want less increments (twenty times a year is really a lot… even for $5 donations) change the donation units. Fewer donors? Up how much you want each donor to have given by the end of the year.

Practicalities

Most of you reading this now probably do not expect to make a living publishing online fiction. Probably you’re looking to merely supplement your income by a few thousand doing something you love. In which case you can have some real fun running numbers, figuring out who of your readers should be in which Tier and developing strategy for how to get them there and keep them there. As I’ve stated and (now) overstated … I STILL don’t believe donor based funding can support writers/artists … but if you want to do it, do it with a plan.

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