Funding on Kickstarter is all-or-nothing. This means that unless a campaign reaches its funding goal, backers are not charged for a pledge and creators receive no funds. Consequently, setting the right funding goal is critical for a successful campaign and a successful creative project.
Your funding goal should be the amount you need to complete your project (e.g. the costs of production, materials, and shipping), and the fees associated with running a project on Kickstarter, not what you hope to raise from your campaign. Once you launch your project, you cannot change your funding goal or deadline.
There are two key questions that can help you think about whether you’ve set the right goal:
- If the campaign ends and you successfully fund but with just 100% of your goal, nothing extra, will you be able to follow through on this project and fulfill all the rewards to your backers? If not, you need to set your goal higher.*
- If the campaign ends and you fail to hit your goal, but you made it 90% of the way there, will you regret not being able to collect all the pledges that were made to your campaign? If the answer is yes, consider setting a lower goal, but make sure that you can still answer yes to the first question.*
*Take a look at the information we’ve shared below to help you make sure that you’re accounting for all fees and expenses, as well as how success rates change with different goal sizes.
As a first step, it helps to make a list of all the materials, resources, and expenses (such as shipping costs) you'll need to complete your project, and the estimated costs for each. Research how much things will cost, and consider how your expenses could change if you had to switch suppliers or fulfillment partners (it never hurts to have a back-up plan). We’ve also compiled a list of services that can aid in the process of completing your project.
Keep in mind that any shipping fees associated with pledges will be included in your funding total while your project is live.
If you are confident that you will be completing the project and be able to fulfill rewards regardless of how much you raise from your Kickstarter campaign, we recommend that you set your goal at the amount you know you will be able to raise from your own network (family, friends, fans, followers, newsletter subscribers). Remember that you can always raise more than your goal.
Check out this video for insight into how other creators estimated their funding goals:
If a project ends successfully, Kickstarter collects a 5% fee on the total funds collected. Additionally, Stripe, our payments processor, charges a variable card processing fee (roughly 3-5%). The complete fee breakdowns are available here.
If a project does not reach its funding goal, no fees are collected.
Funds raised on Kickstarter are generally subject to taxes. How much you owe can vary based on a number of factors, including the deduction of project-related expenses. We highly recommend talking to an accountant or tax advisor. They can guide you through your particular tax scenario in the most advantageous way possible.
While we can't offer tax advice, we have compiled a guide for financial professionals who may not be familiar with Kickstarter.
Success Rate and Goal Size
Not surprisingly, the larger the goal, the lower the success rate of Kickstarter campaigns. However, just because a campaign fails to hit its goal doesn’t mean that the creator chose the wrong goal size. Sometimes creators need to raise at least $100,000 to make their project come to life. Creators often choose goals that are aspirational, rather than what they really need to execute their project.
Set a goal that is achievable while allowing yourself to fulfill your rewards to your backers. Make sure you’re setting yourself up for success.
Still unsure about your funding goal? The Funding Calculator, which can be accessed via the Funding tab of the project editor, is intended to help creators visualize the potential costs associated with running a project on Kickstarter, including fees and taxes, on top of how much money will be needed to bring their creative project to life.
To use the Funding Calculator, follow the steps below:
- Click “Use our calculator to estimate total costs, including taxes and fees" in the Funding goal section of the Funding tab.
- Enter your estimated budget, this should be how much money you think you’ll need to create your project and fulfill all of your rewards.
- Use the slider, or enter an amount in the tax percentage box, to account for any taxes associated with your project. As we’re unable to provide tax advice, we recommend you consult with a tax advisor for more guidance.
- Once you enter an estimated budget and tax percentage, Kickstarter’s fee (5%) and our payment processor’s fee (~5%) will automatically be calculated. We’ll then suggest a new goal that incorporates the fees and estimated taxes.
- Please note that payment processing fees vary depending on the country you select and the number of backers you receive. More detailed information on fees can be found here.
- To use this new suggested funding goal, click the “Select” button to add it to your project.