How to Set the Right Funding Goal for Your Kickstarter Campaign

Kickstarter runs on an all-or-nothing funding model, meaning that unless a campaign reaches its funding goal, backers are not charged, and creators receive no funds. Therefore, setting the right funding goal is crucial for a successful campaign and project completion.

We've created this comprehensive guide to assist new and returning creators in determining the appropriate goal for your campaign.

Understanding Your Funding Needs

Your funding goal should be the amount needed to complete your project, covering production, materials, shipping, and the fees associated with running a project on Kickstarter—not just what you hope to raise.

Key Questions to Consider

1. Can You Complete Your Project with 100% of Your Goal?
   If the campaign ends and you only reach your goal without any extra funds, will you be able to follow through and fulfill all rewards to your backers? If not, you need to set your goal higher.
2. Will You Regret Not Hitting Your Goal If You Fall Slightly Short?
   If you make it 90% of the way but don’t hit your goal, will you regret not being able to collect the pledges? If yes, consider setting a lower goal, ensuring you can still complete the project and fulfill rewards.

Steps to Set the Right Goal

1. List All Costs:
   Make a comprehensive list of materials, resources, and expenses, including shipping. Research costs thoroughly and consider how expenses could change if you need to switch suppliers or fulfillment partners.
2. Estimate and Research:
   Research the estimated costs for each aspect of your project. Having backup plans for suppliers or partners can help avoid surprises.
3. Account for Fees:
   Kickstarter collects a 5% fee on successful projects, and Stripe charges a variable card processing fee (around 3-5%). Make sure these fees are included in your funding goal. More details on fee breakdowns are available here.
4. Consider Taxes:
   Funds raised on Kickstarter are generally subject to taxes. Consult with an accountant or tax advisor to understand how much you might owe, factoring in project-related expenses. We’ve compiled a guide for financial professionals unfamiliar with Kickstarter.

6 Essential Tax Tips for Crowdfunders in 2024

A guide for your accountant. *This isn’t legal or tax advice*

Kickstarter Project Updates BlogKickstarter Staff

Using Your Network

If you are confident in completing the project regardless of how much you raise, set your goal at an amount you know you can raise from your network (family, friends, fans, followers, newsletter subscribers). You can always raise more than your goal.

Success Rates and Goal Size

Larger goals tend to have lower success rates, but that doesn’t mean the goal is wrong. Sometimes, projects require substantial funds to come to life. Setting an achievable goal while ensuring you can fulfill rewards is critical.

Funding Calculator

Kickstarter’s Funding Calculator can help visualize potential costs, including fees and taxes, needed to bring your project to life. Here’s how to use it:

1. Access the Calculator:
   Go to the Funding tab of the project editor and click “Use our calculator to estimate total costs, including taxes and fees.”
2. Enter Your Budget:
   Input your estimated budget, including the amount needed to create your project and fulfill rewards.
3. Adjust for Taxes:
   Use the slider or enter an amount in the tax percentage box to account for project-related taxes.
4. Review Suggested Goal:
   The calculator will automatically factor in Kickstarter’s 5% fee and the payment processor’s fee (~5%), suggesting a new funding goal. Click “Select” to add this goal to your project.

By following these steps and utilizing available tools, you can set a funding goal that aligns with your project needs and increases the likelihood of a successful campaign.

Good luck with your Kickstarter journey and we're here to help you every step of the way.