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Crowdfunding a Book Project

Updated on August 31, 2017
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Heidi Thorne is a self publishing expert, author of 21 (and counting!) business books and eBooks, and a former trade newspaper editor.

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While attending a writers' conference, I was a bit puzzled at the audience inquiries about crowdfunding a book project. What? Yes, crowdfunding where you ask people to donate to your dream, business idea, or cause.

So I wrote it off as just some hair brain idea until I ran across it again. This time it was a genuine campaign to crowdfund a new self published book project.

Is this just a new level of self publishing crazy? Is it a scam? Or is it a way to legitimately make money from self publishing?

What is Crowdfunding? Is Crowdfunding the Same as Crowdsourcing?

First, let's clarify what we're talking about. Crowdfunding is a campaign whereby someone seeks pledges (begs?) for financial donations from friends, family, or the general public, usually via online platforms such as Kickstarter and GoFundMe.

If the campaign reaches its pledge amount goal, it goes forward and the person or group seeking the funds gets the money. If it doesn't, no money is collected from donors, the campaign ends, and funds will need to be obtained by other means.

In addition to the emotional satisfaction of helping someone out, crowdfunding campaigns may offer something special to their pledge donors in exchange for their help. This might be a promotional giveaway, a discounted price for the funded product or service once it is ready for the market, an invitation to a special event... some of these offers get very creative with these perks to help attract donors.

Conversely, crowdsourcing is gathering non-financial help or input. This assistance is sought to help create better products, services, or outcomes. For example, a conference may want to offer a customized educational session based on input from potential or actual attendees.

In this following discussion, we'll be specifically talking about crowdfunding.

How Does Crowdfunding a Book Work?

When self published authors seek crowdfunding for a book project, they are asking family, friends, and fans to support them financially in writing and self publishing a book. If they reach their pledge goal, they will go forward with the book. If not, they will have to decide if they want to use their own funds for the project, or scrap the idea altogether.

A special perk may be offered to attract pledges. This can include a copy of the book as soon as it publishes, with upgraded perks for higher pledges. Upgrades could include signed copies, promotional giveaways, invitations to book signing events, and more.

Why Would Anyone Want to Pledge to a Book Crowdfunding Campaign?

Like other crowdfunding campaigns, people may want to pledge purely because they are family or friends of the author.

But what about fans or prospective readers? It's less likely they'll pledge unless the perks—on top of a copy of the finished book—are very good. For them, it functions almost like a book or eBook pre-order. With pent up demand for a self published book unlikely to be high, readers may wish to skip the crowdfund offer and wait until the book is officially available to buy. This lowers the chances of meeting a pledge goal.

What Motivates Self Published Authors to Pursue Crowdfunding?

Making money from self publishing can be tough. Getting a traditional publishing book contract and advance can be even tougher. Frustrated by these options, authors may believe that their chances of making money through a crowdfunding campaign could be an alternative to get paid for their writing and self publishing investment. Once their costs are covered and they deliver the book copies and perks to donors, then they can get self publishing revenues and royalties off the book in the future.

Could be an innovative way to get paid for writing. But it is not without challenges.

Challenges of Crowdfunding a Book

Could Crowdfunding Hurt Your Image as an Author? Getting crowdfunding is a sales effort in itself. Unless the perks are very attractive, it's likely that only friends and family will be motivated enough to want to help out an author in this way.

Since using crowdfunding can appear as a "beg" for money, and not a "sale," carefully consider how that action could impact your image. People may think, "If he's such a great author, why does he need a handout?"

Understand the Costs of Crowdfunding. When setting a crowdfunding goal, authors will need to do a thorough cost and profit margin analysis to make sure that if the pledge goal is achieved, all costs are covered. Those costs include any donor perks, advertising for the campaign, shipping and handling for any physically shipped books or items, and costs to use the crowdfunding platform.

The cost of using platforms such as Kickstarter needs to be considered in the cost and profit projections. There will be fees for both using the platform and processing the pledges.

Consult a CPA Regarding Crowdfunding Platform and Taxes. For for-profit self publishing projects, Kickstarter, and other platforms that are geared for venture capital, would be appropriate. Pledge proceeds are taxable as income. If funds are raised and books (physical or digital) are delivered to donors, sales taxes may also need to be paid.

Even though GoFundMe donations are often considered "gifts," they may be taxable as income since you're self publishing to make money!

Because Facebook's fundraising tools are primarily for personal emergencies and nonprofits, using them for your for-profit book project would be a violation of the terms of service.

Again, consult your CPA or tax adviser to discuss applicable tax regulations and reporting.

Will Pledge Donors Want a Piece of Your Book's Future? In your crowdfunding documentation, you should be very clear about who owns the copyrights, revenues, and royalties for the work that's being created. If the book becomes super successful, there could be some donors who incorrectly feel they own a piece of the book's future. Consulting your business attorney about the legalities of crowdfunding your book project is highly recommended.

Would you consider running a crowdfunding campaign for a self published book?

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Disclaimer: Both the publisher and author have used their best efforts in preparation of this information. No representations or warranties for its contents, either expressed or implied, are offered or allowed and both parties disclaim any implied warranties of merchantability or fitness for your particular purpose. The advice and strategies presented herein may not be suitable for you, your situation or business. Consult with a professional advisor where and when appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other damages, including but not limited to special, incidental, consequential or punitive, arising from or relating to your reliance on this information.

© 2017 Heidi Thorne

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    • heidithorne profile image
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      Heidi Thorne 4 days ago from Chicago Area

      Hi Suhail! If you have enough siblings and close friends, it could be a crowd. :) Thanks for stopping by and have a terrific week ahead!

    • Suhail and my dog profile image

      Suhail Zubaid aka Clark Kent 4 days ago from Mississauga, ON

      Still, a good option to keep in mind, Heidi :-)

      If not the crowd, I remembered I can always make an appeal to my siblings and close friends ha-ha.

      Regards,

      Suhail

    • heidithorne profile image
      Author

      Heidi Thorne 6 days ago from Chicago Area

      Thanks Dianna! Glad you found in the info helpful. Thanks for stopping by and have a great weekend!

    • teaches12345 profile image

      Dianna Mendez 6 days ago

      Thank you for defining this term and helping readers understand how it can be useful in publishing a book. Yes, I would definitely use this resource.

    • heidithorne profile image
      Author

      Heidi Thorne 3 weeks ago from Chicago Area

      Hi purl3agony!

      I definitely think that crowdfunding cuts into the actual long-term sales of books, though the overall profit picture could be helped by the infusion of cash. The concern, as you've identified, is that those who pitch into the crowdfunding campaign may represent a large portion of the total potential buyer pool. So if the book is later offered on Amazon or elsewhere, it may have lower future sales activity, which will not help it rank on sites such as Amazon.

      Then I'd have to ask if the knitting book is crowdfunded, is it also crowd sourced, with contributors of both finances and content? That could be a crowdfunding nightmare with everyone probably wanting a cut.

      Thanks for pointing out that additional troublesome issue with this strategy! Have a great week ahead!

    • heidithorne profile image
      Author

      Heidi Thorne 3 weeks ago from Chicago Area

      Hi Suhail and K2, too! You offered some great examples of where a crowdfunded book project might make sense. These are community efforts where everyone benefits. But I agree that for our own personal publishing efforts, this strategy is a bit of a stretch. Thanks so much for adding those helpful examples to the conversation! Have a wonderful week!

    • purl3agony profile image

      Donna Herron 3 weeks ago from USA

      Hi Heidi - Thanks for this great information. I have seen crowdfunding campaigns to help publish knitting books, and I've had a lot of the questions about the projects that you mention here. I also wonder - if all or most of the interested buyers fund the book through crowdfunding, does this cut into the book's actual sales and profits?

    • Suhail and my dog profile image

      Suhail Zubaid aka Clark Kent 3 weeks ago from Mississauga, ON

      Thank you, Heidi, for mentioning this option.

      I have noticed this to be successful in some special cases. For example, a book on flora and fauna of Pakistan for attracting foreign birders, where all my Facebook wildlife lovers and Pakistani diaspora across the globe chipped in to help out the writers.

      Another example is a coffee table book on Kuvasz dog breed, where we chipped in to help the author publicize a breed that we, the contributors, love.

      There are other examples as well.

      I think crowdfunding can be helpful for writing books, where all funding people/groups get some satisfaction or indirect reward in getting the book published, and where there is a committed group of writers who are helping the cause on behalf of a larger funding community.

      However, whenever I publish my book, I will never be taking this route due the reason mentioned by Bill Holland.

      Thanks again for continuing writing informative blogs.

      Regards,

      Suhail and K2, the Great White Kuvasz

    • heidithorne profile image
      Author

      Heidi Thorne 3 weeks ago from Chicago Area

      Shannon, thank you so much for sharing your experience with crowdfunding! Like you, I've only donated a couple of times to these efforts for charitable or personal help. I never got any big perks for donating either. :)

      I, too, would never consider this route for my self publishing projects. Agreed, there are so many self publishing options that it makes it an odd choice. I say let the real market fund me with real book sales! I think it is only a valid path for a community or family type project so that one person doesn't get stuck with all the costs. For standard publishing projects that will be sold to the general public? No way.

      The projects for which I witnessed crowdfunding were inspirational/motivational and memoirs of all things. *shaking head*

      Truly appreciate you taking the time to tell your crowdfunding story! Have a lovely day!

    • shanmarie profile image

      shanmarie 3 weeks ago

      Interesting hub, Heidi. I had no idea anyone would consider going this route. It makes sense for fundraising products or other group products.... maybe. The costs might make it unrealistic.

      I have only used these type of platforms a few times. When I say use, I mostly mean to donate or to share for others. One project I donated to as a fan was an album project of a singer I like. For personal reasons, I shared a GoFundMe of a family member with stage 4 cancer. Her daughter created the page for her medical bills. But we did not personally donate to the account because the site keeps a percentage, so we donated to her directly. And then recently, we set up a fundraising account on GoFundMe in an attempt to raise enough funds to be able to intervene in a CPS case for our granddaughter.

      Personally, I would never consider a platform like that for publishing. I self published a poetry book for free. I don't sell many and don't plan on promoting it. And I also paid a self-publishing company several years ago that has a promotional package. This company allowed me to pay it out in payments. Luckily, there was no time limit on when I could submit my work because I have not finished the project I intended to publish with this company. Too many other options than crowd-funding for me.

      May I ask what kind of project you witnessed being funded this way? Just curious.

      Forgot to mention that the fan thing I funded....the major donators who donated mega bucks got big prizes as a reward. Wasn't me, but I figured a buck or two was worth my support.

    • heidithorne profile image
      Author

      Heidi Thorne 3 weeks ago from Chicago Area

      AliciaC, crowdfunding a book never occurred to me either until I saw it was a thing n the writing wild! I'll have to say it's innovative. But I agree that it would only be a reasonable request for maybe a family or community project (as noted in one of the other comments). Thanks so much for stopping by and chiming in! Have a lovely weekend!

    • AliciaC profile image

      Linda Crampton 3 weeks ago from British Columbia, Canada

      The idea of crowdfunding for a book project has never occurred to me. It's an interesting thought, but I can think of only a few situations in which I would consider it to be appropriate. Thanks for sharing the interesting information, Heidi.

    • heidithorne profile image
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      Heidi Thorne 3 weeks ago from Chicago Area

      Flourish, like you, I think writing a book is a personal investment and sacrifice. In my opinion, the only valid ask is for a sale of the book. Thanks for chiming in! Have a beautiful weekend!

    • FlourishAnyway profile image

      FlourishAnyway 3 weeks ago from USA

      People ask for money for ridiculous reasons and for wonderful reasons. With writing a book, my take is if you want something badly enough you'll figure out (another) way. This is a beg and I'm glad you highlighted some of the issues and concerns.

    • heidithorne profile image
      Author

      Heidi Thorne 3 weeks ago from Chicago Area

      Hi Glenis! I think you're right about the family history type of publication. It would be a family project and crowdfunding would be an ideal way to have family members participate. But you're also right that it is a bit cheeky to ask. :) Thanks for chiming in and have a beautiful weekend!

    • Glenis Rix profile image

      Glenis Rix 3 weeks ago from UK

      I wouldn't risk asking for crowd funding for a work of fiction, in case it didn't sell enough copies to recoup the costs. But I can see some circumstances in which crowd funding might work. For example, publication of a family history or a biography of a family member might perhaps be funded by family members. It would be a bit cheeky to ask though. I wouldn't do it!

    • heidithorne profile image
      Author

      Heidi Thorne 3 weeks ago from Chicago Area

      Sally, I'm seeing more crowdfunding efforts, too. I understand for those who have had some setbacks and need a little help from their friends. But for a book? I just think it's odd. And my concern, also, would be that donors feel they are "shareholders" in the project, and will want a little more than a free copy of the book. Thanks so much for sharing your thoughts on the topic! Have a beautiful weekend!

    • heidithorne profile image
      Author

      Heidi Thorne 3 weeks ago from Chicago Area

      Billybuc, I also think it's more hassle than it's worth. I'd rather self publish the regular old way, too. Hope you're having fun with the pup. Happy Weekend!

    • sallybea profile image

      Sally Gulbrandsen 4 weeks ago from Norfolk

      Crowdfunding seems to be growing more common these days, the funds I have seen are usually based on someone having a misfortune or financial need but I am not sure that I would like to follow this route. It seems to me that one might not be able to take a project forward without a lot of interference from those doing the funding.

    • billybuc profile image

      Bill Holland 4 weeks ago from Olympia, WA

      I've had this suggested to me. Quite frankly it seems like more work than it's worth. Just writing a novel is at least a nine-month investment of time . . . and then to develop a successful crowdfunding platform will take months, right? I'd rather be writing and marketing my books the way I've done it in the past.

      Have a great weekend!