STREAT CEO and co-founder, Rebecca Scott tells us the story of how they took a donation of $4,000, transformed it into $80,000 crowdfunding campaign and launched their new $160,000 social enterprise cafe.
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Summary
In Episode 2 of the Home STREAT Home podcast series we dig into STREAT's second crowdfunding campaign as they battle through that perennial non-profit question: how much information do donors really want?
The full transcript is below, but here are top 3 highlights:
1. STREAT CEO, Bec Scott on why earnestness sucks in charity fundraising:
"Yeah I hate earnestness. I really, really hate it. If the only way we ever got you to become involved in something was just to make you feel so god damn guilty about living in a house or having your own home, that would be crazy"
2. Naomi from STREAT on why philanthropists should trust charities more:
"I feel like that pisses me off in general about philanthropy that donors want to say, "Well, here's some money and I'd like you to do this with it," rather than saying, "You know what, charity? You do great work. Here's some money and I trust you to make a good decision about what to do with it 'cause you know much better than I do, how to use that money effectively."
3. Ian from STREAT on the cheapest rent in Melbourne, ever:
"We were fortunate enough to have someone buy the property and gift us use of the property so that's $2.5 million property that we're able to use for the next 50 years for $5 a year"
Listen to the podcast here (17 min):
Here's a lightly edited transcript
If you walk down Cromwell St in Collingwood, Melbourne, it feels like you’re walking past light industrial brick façade after light industrial brick façade. There’s a stream of roller doors that gives you the sense you’re in a loading bay for a printing shop. But if you go far enough, there is one building that stands out.
Naomi: So the front of the building is actually an old manor house. I think it was built in the 1800s or maybe the early 1900s. But this is beautiful old manor house that was actually the largest brothel in Collingwood. And they've retained the entire facade and I think parts of the side of the building as well but a lot of the inside has been gutted.
Prashan: What does the front of the brothel look like?
Naomi: You would never guess it's a brothel.
Prashan: Right now, as we record, the old manor house looks like the middle of a construction site, because, super-excitedly, it’s the site of STREAT’s newest and biggest venture – their brand new site, their Home STREAT Home. There’s a café, there’s a bakery, there’s a roaster, there’s all their offices, their training space – it’s the dream site that STREAT’s always wanted to build and it’s hard to understand just how big the site is.
How STREAT ended up with this site is the stuff of non-profit fairy tales. Someone reads a media piece, calls them up, gets to know them, and then decides to buythem a $2.5M property to turn into a youth training academy. . Ok, I’m sure it was a bit more complicated than that, but that actually happened.
Here’s Ian from STREAT.
Ian: We were fortunate enough to have someone buy the property and gift us use of the property so that's $2.5 million property that we're able to use for the next 50 years for $5 a year. So that's the first big win and that came purely from a media story. And the gentleman read that story and engaged with us the next week and has been our major backer and supporter since.
Prashan: Yup. now, we could create a whole episode about that, but that’s not what we’re going to talk about. We’re going to talk about what happened next.
As it turns out, getting gifted the use of a site for 50 years is great, but then there’s a whole heap of other expenses. When they first got the site, the whole place was still set up as a brothel. It was like they were getting ready for a night of action, and then everyone just hurriedly had to leave, leaving their leather, their poles and everything else you’d imagine in a brothel right there in place.
So STREAT had to knock down stuff, build new stuff, make sure other stuff stood up – which is all expensive. And so they managed to fundraise $1.5M in grants from trusts and foundations and raised another $2.5M in debt from NAB and Social Ventures Australia – making the grand total somewhere near $4M.
Now STREAT wants to run a new crowdfunding campaign to raise $100k for the final stage of the site – which, well, is hard because, as Ian so eloquently puts it:
Ian: A lot of people may well assume, "Well gosh, they've got the land, they've got the loan, they've built the place, they really don't need the money,"
Prashan: So, how do you sell a $100k campaign for a $4M site? Today on Episode 2 of the Home STREAT Home podcast, we delve into exactly that question as we follow STREAT trying to figure it out. I’m Prashan from Chuffed.org, if you haven’t listened to Episode 1 of this podcast series, head to chuffed.org/podcasts and check it out first. Otherwise, stay tuned.
STREAT’s been thinking about this second crowdfunding campaign for a long time – remember their last one was four years ago.
Rebecca: We've known we're going do a campaign for probably a year and half, so we always said, right near the very end of the build project, we wanna find a way that we can raise a lot of it will be for the money, but also just let everyone know that, "Hey, after years, and years, and years of hearing about this thing, it's finally here,"
Prashan: Of course, things get in the way, money takes longer to raise, but in early January STREAT seconded in Naomi Barson whom you heard at the top of the episode to help them run the campaign.
Unlike the first campaign, where it was very clear what the money was going to build, this one was a lot more complicated, because well they could’ve chosen anything. They needed money for vans, they needed money for the bakery, they needed money for programs, for the fitout, for the café – the list was endless.
Naomi: We're blessed that we got many, many options as to ways we could take that, be it bakery, be it focusing on trainees, be it impact, whatever it was. And it was really just nutting out what's the one core idea we want to hinge this story on, and the rest will fall out from there.
Prashan: The quest was on, to find that one story. And there was a lot to choose from. Step one though was deciding whether they should be selling the higher-level vision, something like this:
Naomi:. Conscious consumerism, so the concept of changing lives through meals, which is Quarter STREAT. A fair go for all, highlighting that some people through no fault of their own start on the back foot and STREAT's here to give them a fair go at education, a career, a life. Looking at hopelessness and youth homelessness, compassion, so again looking at poverty and disadvantage and something that STREAT can have a shot at remedying. Looking at inclusion, so everyone deserving to be included and STREAT contributing to the community in that way. About education and training and hospitality and giving them job-readiness skills and on the job training. Collective impact,
Prashan: … Or should they be selling the practical laundry list of what the money was going to buy:
Ian: I look through the entire construction activity and thought, "Maybe it could've been the solar panels, maybe it could be this, maybe it could be that." So we went through those things. I've listed all, in general terms, all the things that we need to get it up and running. And there's $100,000 or more where it could've been the two vehicles that we need. We need two second hand delivery vehicles, one refrigerated and one not, so it can deliver coffee and catering and bread and those sorts of things.
Prashan: Anyone who’s ever pitched a social good project knows this dilemma – do donors want to know exactly what their money is actually buying, line item by line item, or do they want to be part of a bigger vision of what those things actually sum up to create?
The big picture vision camp normally argue that people want the emotional engagement, that sense of connection that a laundry list doesn’t provide. And that if you want the organization to create that vision, the best way is to just trust them to do it.
Naomi: And I feel like that pisses me off in general about philanthropy that donors want to say, "Well, here's some money and I'd like you to do this with it," rather than saying, "You know what, charity? You do great work. Here's some money and I trust you to make a good decision about what to do with it 'cause you know much better than I do, how to use that money effectively." And I feel like that, for people to genuinely give and genuinely be philanthropic, unless they're involved in the sector they should just trust the charities to get on with their work. It's like when you buy shares in a company, I guess you get a bit of a say, but you trust the way the CEO's guiding the ship and you trust the board. And you hopefully trust the decisions they're making. That's why you invest.
Prashan: The other camp, the show me the budget people, argue that you have to give people transparency – you have to show them what their money is going towards.
Ian:. I'm more the practical side. I want people to know that what we're doing here, the money's going to go directly to purchasing and building some things which are really important.
Prashan: For the record, I think the tension is a good thing to have in an organization. Unsurprisingly, people need both, for slightly different reasons.
Donors get inspired by the big vision; that you’re doing something bold. They want to be part of doing something aspirational. That’s why new shiny things sell better than things that are derivative or the same as something I’ve already seen a hundred times before. And probably, more importantly, I’m way more likely to tell my friends about something big and bold than I am about something unambitious and dull.
Once you’ve got the vision in place, the line-by-line budget-level transparency is great to establish credibility. It says to people, ‘hey we’ve thought this through, we know we can achieve what we’re saying. In fact, we’re so confident that we’re going to tell you exactly what we’re going to spend the money on’. If I can see the line between what you’re spending money on and achieving that big bold vision, that’s when everyone’s happy.
So big bold vision to inspire everyone, the line-by-line budget to add credibility. To get to the line-by-line though, you have to start with the big vision – and everyone seems to have a different way of getting there.
There’s the start broad with as many ideas as possible approach:
Naomi: so when I go into meetings, I come up with a whole bunch of ideas just to be devil's advocate, some of them, but just to present as many options, that's clearly not exhaustive, but to prompt the discussion and debate around what feels right and what doesn't feel right, so... Yeah, again, just playing with a lot of copy, there was "Help STREAT Build a Home," "There's No Place Like Home," "We're Moving to Cromwell STREAT," that's crap isn't it, and "Help Us Build Cromwell STREAT," as in S-T-R-E-A-T.
Prashan: And then there’s the deep dive into one concept approach. Basically the thinking is that it’s hard to have a real response to multiple high-level concepts – they all sound good – you get a much better understanding of what your gut instinctively likes and dislikes by deep diving into one concept and seeing how you react.
One of the deep dives that STREAT took was on a ‘Bake a difference’ concept. The bakery was the new thing that STREAT was doing and because people like funding shiny, new things, it seemed kind of logical.
While the concept could have worked, by deep diving into it, STREAT’s collective gut felt a bit uncomfortable about it. Here’s Bec again.
Rebecca: So, all of that, I think, could have really worked. But it's only one part of, it's one-fifth of that new big amazing building. So, we didn't want you to feel like... Actually, it's one thing and then you turn up on site and you're just expecting a bakery and then there's kind of surprise. So, trying to make sure it was bigger than any one part.
Naomi: To me, it was focusing on the bricks and mortar element of what we're doing, rather than the emotional themes about what a home encompasses, so belonging and safety and somewhere that provides community. I didn't feel that a bakery was broad enough to include all of that. And don't get me wrong, I feel like it could have worked. Like it was more, "Let's move down this other path and see if we come up with something else that resonates more." It was more of a "You know what, that doesn't feel really right, right now. Let's explore this home idea a bit more. If we get back there, great. If not, let's see where else we get to."
Prashan: After 2 long workshops over a good fortnight of debates, the team started to coalesce around a vision.
Rebecca: Yeah, we probably threw around two or three or maybe even four concepts. We started throwing them around in meetings and just said, "What about this? And what about if we did that?" And just keeping the ideas really open, and I don't even know where the idea of kind of a housewarming came from. I'm not quite it was about that particular idea that had just kinda stuck in my mind. But there's something, no matter how many times we kinda think of new ideas, in my mind I always come back to what our young people don't have. They have an absolute lack of some where that's safe and they belong and somewhat... Yeah, that sense of belonging. So what I didn't want, is I didn't wanna do a campaign that was kind of cute and had a cute theme around it. We were missing an opportunity if we didn't give people a chance to belong as part of the very process of the campaign.
Naomi: it was actually Bec that came up with Home STREAT Home, she illustrated it on the board and Bec's very creative and is forever drawing. But she illustrated it as a home and then STREAT, the word and then home and talking about our trainees come from a home that's generally not somewhere they feel safe or belong or particularly want to be. They come to STREAT in the middle of their day and spend their day training with us, and that's where they've actually for the first time in their lives felt like that they have that sense of community and support and love, and all that great stuff.
Naomi: And then they go home at the end of the day, so it was almost this STREAT book-ended by homes.
Prashan: Once they had agreed on ‘Home STREAT Home’ as their overarching vision, things started to fall into place. They ordered coffee cups with the Home STREAT Home branding. They created a pitch about how STREAT was creating a new home and recorded a video to match.
Then came the perks. Now the perks in a crowdfunding campaign are normally seen as auxiliary – an additional way for donors to give to a campaign. I might get a t-shirt if I donate $25, or to get my name on part of the project for $500.
Prashan: What struck me when I was listening to Ian and Bec talk about the perks was that for them, the campaign was in many ways defined by the perks. The campaign wasn’t just about “asking for money”. It was also about telling customers that their new site was there, and training them to be, well, customers.
Prashan: Here’s Bec.
Rebecca: We're trying to get people across into that new site. So, it's a way about kind of priming a customer-base and getting them enthused about this new project. So, even though when the campaign comes to an end, it won't be the following day they can walk straight into that site and buy something from there. But it won't be too long after
Prashan: If you remember back to their previous campaign, Ian was trying to do the same thing:
Ian: One of the main reasons I wanted to run the crowdfunding campaign was to start the customer behaviors that we really wanted. Up until then, STREAT had been a couple mobile carts and you would go up to Federation Square or Melbourne Central and Melbourne Union and buy a coffee from us. This was the first time you could actually go to a café and have a meal, take coffee home, start to get some catering. I wanted people to start purchasing in the way that our business was heading. We started some of those behaviors which continue on now
Prashan: By framing it around creating more customers for their new sites, STREAT wasn’t just tapping into people’s spending purse, instead of their philanthropic one, they were also taking a much longer term view about where the value of the campaign is. They were hooking people in via the campaign, not just for the money they get today, but for the hundreds of coffees someone will buy in the future.
There was one more thing that was really important to Bec. This – I should say – is probably my favourite 30 seconds of interview across this entire podcast series and I think captures the secret of why some campaigns succeed online and others don’t. Ready? Here we go.
Rebecca: Yeah I hate earnestness. I really, really hate it. If the only way we ever got you to become involved in something was just to make you feel so god damn guilty about living in a house or having your own home, that would be crazy. So I want you to feel so positive about being part of this campaign, that it's something that you look forward to, it's fun, or it can give you a laugh. It's not just this dry topic that's gonna make you feel like the world's about to end and there's nothing you can do about it. Actually, there's a heap of things that you can do to help us stop homelessness and we can have a heap of fun along the way as well.
Prashan: That’s the secret to a great campaign. Make stopping homelessness fun.
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