What a crowdfunding campaign really costs in Africa
7 min readPublished Updated
A campaign that shows "target reached" has not banked its target. Between what you collect and the money actually available for the project sits a series of deductions almost no founder anticipates correctly, and which can exceed ten percent of the total.
This article works through the account, line by line, with a costed example. Not to discourage, but because a target calculated without these costs is a target you hit while still being unable to do the project.
The six cost lines
1. The platform commission
The most visible line, and rarely the heaviest. Platforms generally sit between 3 and 8 percent of the amount collected.
Two models exist, and the difference matters: all or nothing, where you receive nothing if the target is missed, and keep what you raise, where you keep whatever came in. The first reassures contributors, who know they will not half-fund a project. The second protects the founder. Check which applies before setting your target.
2. Payment fees
These depend entirely on the method used, and the gap is considerable.
Mobile money: generally 1 to 3 percent depending on operator and country. It is the cheapest channel, which is fortunate, since it is also the one most domestic contributors will use.
International card: markedly more expensive, often 2.9 percent plus a fixed component per transaction. This is the diaspora channel, and the fixed part weighs heavily on small amounts.
Here is a point few people calculate: on a €5 contribution, a fixed €0.30 already represents 6 percent before any percentage applies. On small gifts, fixed fees cost more than percentages.
3. Withdrawal, routinely forgotten
Receiving money into a mobile wallet is not the end of it: you then have to withdraw it, and withdrawal carries its own tariff, usually banded.
On a substantial amount that can add several points. Check your operator's bands before setting the target, and plan to withdraw once rather than in ten small operations: banded tariffs punish fragmentation.
4. Currency conversion
If your contributors pay in euros or dollars and you spend in local currency, there is a conversion, and it carries a rarely displayed cost: the margin on the rate applied.
This line depends heavily on the country:
- In the CFA franc zone, the rate is fixed (€1 = 655.957 FCFA): the risk is nil, only the provider's margin remains.
- In Kenya, Uganda, Tanzania, Rwanda or Guinea, the currency floats. Between the start of a six-week campaign and buying the equipment, the real value can have moved noticeably.
- In Tunisia, the dinar is not freely convertible and exchange control adds a regulatory constraint on top of the cost.
Our country guides cover this market by market.
5. Rewards
This is the line that ruins the most campaigns, because it appears nowhere until the end.
A physical reward has a production cost, a packaging cost, a shipping cost and a time cost. A hundred parcels to send means a hundred addresses to collect, a hundred packages, and several days of work.
Simple rule: a physical reward should never exceed 30 percent of the corresponding contribution, all in. If it represents 60 percent, you have opened a loss-making shop, not raised funds.
Intangible rewards (a mention, early access, a visit, a detailed report) cost almost nothing and are often more appreciated than an object.
6. Your time
It appears on no invoice and is nonetheless the principal cost.
A serious campaign takes several weeks of preparation before launch, then daily presence throughout: replying, following up, publishing, thanking. A campaign you launch and leave to live raises nothing.
A costed example
Take a campaign in Senegal targeting 3,000,000 FCFA, roughly €4,575, with 70 percent local contributions by mobile money and 30 percent diaspora contributions by card.
| Line | Basis | Estimate |
|---|---|---|
| Platform commission | 5% of 3,000,000 | 150,000 FCFA |
| Mobile money fees | ~2% of 2,100,000 | 42,000 FCFA |
| Card fees | ~3% + fixed on 900,000 | 40,000 FCFA |
| Withdrawal | operator bands | 25,000 FCFA |
| Rewards | 20% of the relevant contributions | 120,000 FCFA |
| Total deducted | ~377,000 FCFA | |
| Net available | ~2,623,000 FCFA |
That is roughly 12.5 percent between the target announced and the money you can use. Figures vary by provider and country, but the order of magnitude holds everywhere.
The practical consequence: if your project needs 3,000,000 FCFA, your campaign target should be about 3,450,000 FCFA. Setting the target at the net requirement means succeeding at the campaign and being unable to do the project.
What failure costs
A campaign that misses its target also costs, even under all-or-nothing where nothing is deducted.
It costs the time invested. It costs credibility with those who contributed and watched it fail. And it costs a stock of goodwill: the people you mobilised will not mobilise again three months later with the same enthusiasm.
Hence a counter-intuitive but robust rule: set a target you are reasonably certain of hitting, even a modest one. A campaign that exceeds its target by 40 percent builds a reputation. A campaign that reaches 80 percent of an ambitious target builds nothing, and funds nothing either.
How to reduce the bill
Favour mobile money in your domestic communication: it is the cheapest channel and the simplest for the contributor.
Discourage micro-contributions by card. A slightly higher minimum on that channel stops fixed fees eating the gift. Suggest tiers instead.
Prefer intangible rewards. They cost almost nothing, and a diaspora contributor often prefers a detailed report to an object that has to be shipped.
Withdraw in one go. Banded tariffs punish fragmentation.
Publish your fees. This is counter-intuitive and it works: a budget that shows "including 377,000 FCFA in fees" is more credible than a round number. It proves you did the arithmetic.
Going further
Our article on mobilising the diaspora covers how to build a first circle of contributors, and the one on funding applications explains how to combine a campaign with a grant application, which deducts nothing.
Amorcia shows its fees before launch, and releases funds against milestones rather than in one payment: the founder knows what they will receive, and the contributor knows what their money is tied to. Join the waitlist to be among the first to launch.