McCabe Callahan on Community-powered Crowdfunding

McCabe Callahan

McCabe Callahan, Co-founder and CEO of Community Funded

McCabe Callahan is a co-founder of Community Funded. Founded in 2011 in Fort Collins, Colorado, the company offers white labeled crowdfunding platforms that leverage and strengthen existing communities, including universities such as Colorado State and towns such as Goshen, Indiana.

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The company was born, in part, as a result of McCabe’s personal frustration with his failed attempts to raise expansion capital from conventional sources for his coffee shop business during the Great Recession. Ultimately, McCabe was able to turn to his customers, who supported his vision and funded the expansion. Inspired by that experience – and further encouraged by the emergence of Kickstarter, Indiegogo, and GoFundMe – McCabe and his collaborators sought to create a compelling financing tool for other entrepreneurs.

Today, Community Funded pays its bills by providing fundraising solutions to large institutions, but its heart and soul remain focused on entrepreneurs. That’s why Community Funded powers the efforts of nonprofits such as The Local Crowd to help bring internet-fueled crowdfunding power to rural communities. Community Funded also offers the use of its platform for free (except for a credit card processing charge).

Community Funded Platform

Screenshot of Community Funded Platform

A Conversation About Community-powered Crowdfunding

I spoke with McCabe about what makes community-based funding different.



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A Useful Five-dollar Word

Community Funded emphasizes propinquity to a greater extent than other crowdfunding platforms. Even though technology-enabled interactions can stimulate communities of interest that are a source of propinquity, physical proximity remains a powerful force. Recognizing that, Community Funded seeks to “provide online technology that causes real-world impact.”


In social psychology, propinquity (/prəˈpɪŋkwt/; from Latin propinquitas, “nearness”) is one of the main factors leading to interpersonal attraction. It refers to the physical or psychological proximity between people. Propinquity can mean physical proximity, a kinship between people, or a similarity in nature between things.

Source: Wikipedia.org


As McCabe puts it, “Community Funded has always had a vision to connect, support, and empower. It’s really about connecting good ideas with a community of people who care and who can share resources to make those ideas happen.”

The Crowdfunding Fallacy

Although crowdfunding platforms have opened new opportunities for entrepreneurs, artists, and others, they aren’t magic money machines. McCabe notes, “A lot of people are still just wrapping their heads around this idea of what we call the crowdfunding fallacy, which is, ‘If you post it, they will fund.’ There’s not this community out there that’s just waiting for you to post your idea so they can throw money your way. It really comes down to sharing a compelling story, being authentic as a human, and building that community before you even ask them for a dollar.”

A lot of people are still just wrapping their heads around this idea of what we call the crowdfunding fallacy, which is, “If you post it, they will fund.”

To state the obvious, we sometimes need to raise financial capital because we don’t have enough money. However, financial capital isn’t the only kind of capital. Physical capital – such as a home or piece of equipment – can be transformed into financial capital through the mechanism of a lien. Even if we are poor in terms of financial and physical capital, we can be rich in social capital – a characteristic of social networks marked by trust and reciprocity.

To be successful in community-based fundraising, you really must start with the community building.

You can’t offer up a house as collateral on a loan before you actually own the house, and you can’t successfully tap your social network to crowdfund until you’ve built up your social capital. Furthermore, converting social capital into financial capital isn’t as straightforward as signing a lien: you have to develop a compelling story and a marketing plan, and you have to execute that plan. As McCabe says, “To be successful in community-based fundraising, you really must start with the community building.” That takes time and planning.

Using the Right Tool for the Job

Community Funded currently focuses on donation and rewards-based crowdfunding. In a nice twist, the platform accommodates in-kind contributions as well as donations that can be used to encourage financial contributions. However, it’s not a great platform through which to raise money to acquire an asset.  McCabe notes, “Those things really don’t fly with [donation or rewards-based] crowdfunding because people feel like they’re just being asked to help you step up in the world.” On the other hand, Community Funded’s style of crowdfunding can be useful for a startup. “I think that what it can be is a powerful marketing tool that can allow you to pre-sell some of your products and services and engage your community at a broader level to get that momentum out of the gate,” McCabe says.

As your company grows, it may need different amounts and kinds of capital. A successful $5,000 product pre-sale campaign on Community Funded might lead to the need for a $50,000 term loan via a platform like Able Lending in order to scale up. With time, you may find it possible to tap into a bank for a relatively low cost, $500,000 loan to further expand your operations. Some may even wish to seek equity funding using a platform such as Localstake.

This is only the beginning. Community-based funding is transforming the way we interact with ideas and capital – and capital of all forms, not just money.

It’s McCabe’s ambition to extend the Community Funded platform over time to enable community-based funding throughout the life of a business. He says, “This is only the beginning. Community-based funding is transforming the way we interact with ideas and capital – and capital of all forms, not just money.”

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