How to Explain What Fan Contributions Will Be Used For

A fan-contribution breakdown should name the project, list the main estimated costs with a total goal, and state what happens once it is funded and how any surplus will be used. Labeling uncertain figures as estimates keeps that promise honest before a fan pays anything toward the goal.

This page covers the transparency piece specifically: what to say about where contributions go and how specific to get. For the full process—from setup and the ask through follow-through—start with the pillar guide on funding your next creative project with fan support.

What is Project Support, and why does that change the wording?

Project Support is FanBell's goal-based contribution feature: a fan sends cash toward a creator-defined total, and a funding bar on the creator's FanBell page shows how much of that total is filled (how FanBell works). It changes your wording because a contributor is funding a stated goal rather than buying a product, so the copy has to describe use of funds.

Project Support is not a store: fans are not buying a product that ships to them, and there is no built-in tiered “give $50, get a sticker” reward system. Your copy should therefore explain what the goal funds without implying that every contributor is purchasing a product, reward, or delivery.

These are the core mechanics to reflect in your wording:

What does the FTC require you to say about how the money is used?

The FTC's guidance to crowdfunding creators is that you "use the money raised from crowdfunding only for the purpose represented," and that if you collect money for a specified project you must not spend it "for personal purposes or to start another project" (FTC Business Blog, June 2015). That single rule is what your breakdown has to survive.

Two federal enforcement actions define the line, and both turned on the gap between the stated purpose and the actual spending:

• In its first crowdfunding case, the FTC alleged that Erik Chevalier asked backers for a $35,000 board-game goal, raised more than $122,000 from 1,246 backers, announced a cancellation after 14 months, and spent most of the money on rent, a move to Oregon, personal equipment, and licenses for a different project (FTC press release, June 11, 2015).
• The 2015 settlement order against Chevalier imposed a $111,793.71 judgment, suspended for inability to pay, and barred him from misrepresenting any future crowdfunding campaign or failing to honor a stated refund policy (FTC press release).
• The FTC lists "the purpose for which funds raised from a crowdfunding campaign will be used" as one of the three things that settlement bars the creator from misrepresenting, alongside whether a contributor receives a deliverable and any fact material to the decision to contribute (FTC Business Blog).
• In the agency's second crowdfunding case, the FTC alleged that Douglas Monahan's iBackPack of Texas, LLC raised more than $800,000 from consumers across four campaigns on Indiegogo and Kickstarter, delivered none of the promised products, and settled in May 2020 with a permanent ban on crowdfunding plus a judgment of nearly $800,000, suspended for inability to pay (FTC press release, May 11, 2020).

Announcing that 2020 settlement, Andrew Smith, then Director of the FTC's Bureau of Consumer Protection, said: "Crowdfunding is a legitimate way to raise money for your business venture, so long as you use that money for the business and not yourself" (FTC press release). Neither case punished a wrong estimate; both punished spending that did not match the stated purpose.

How specific should the cost breakdown be?

A cost breakdown should be specific enough that a fan can see exactly what the money buys and how you arrived at the total — an itemized list with a price beside each line, not one vague, unexplained lump sum. Compare:

• Vague: “Help me level up my content!”
• Specific: “This goal covers a new microphone ($180), acoustic panels for cleaner audio ($120), and editing software for the next six months ($100)—$400 total.”

The dollar amounts above are illustrative examples, not FanBell requirements or prescribed prices.

The specific version lets a fan picture the intended outcome and see how the total was calculated. You do not need to publish a full accounting ledger: the FTC's crowdfunding guidance does not ask creators to publish receipts, only that you "use the money raised from crowdfunding only for the purpose represented" (FTC Business Blog). An honest estimate that is later adjusted is not the problem the FTC pursued in its two crowdfunding cases — an undisclosed, unexplained use of funds is.

A simple format works for most projects:

If the project has one major cost, such as a piece of equipment, venue deposit, or production run, one line is enough. Do not invent extra line items merely to make a simple goal look more detailed.

How do you keep the scope honest and narrow?

State only what the goal is genuinely intended to fund, name one purpose rather than several, and keep that scope unchanged after contributions begin. Redirecting contributions to an undisclosed purpose is the exact conduct the FTC pursued in its first crowdfunding case, where the creator's Kickstarter goal was $35,000 and the settlement judgment was $111,793.71 (FTC press release).

• Do not add unrelated costs later. If the goal is for a microphone, do not quietly start counting rent or unrelated general expenses toward the same breakdown. Create a separate goal for a different purpose.
• Do not promise a date you cannot confidently meet. Project Support has no campaign deadline and no all-or-nothing funding mechanic, so nothing forces you to name a delivery date.
• Label estimates clearly. Write “estimated at $300” or “roughly $300” if the final price may vary.
• Explain plan changes. If the project costs less than expected or shifts to a different item, tell supporters. See keeping supporters updated on a creator project for practical wording.

The largest study of crowdfunding follow-through supports keeping both scope and timing modest. The Kickstarter Fulfillment Report — an independent University of Pennsylvania Wharton study by professor Ethan Mollick, covering 65,326 successfully funded projects from April 2009 through May 2015 — found that 9% of Kickstarter projects failed to deliver rewards and that 8% of pledged dollars went to those failed projects (Kickstarter Fulfillment Report).

Three further figures from that same report are worth writing your copy against:

• 7% of Kickstarter backers failed to receive the reward they chose, and only 65% of backers agreed or strongly agreed that "the reward was delivered on time," which is why a stated date is the riskiest sentence in a funding pitch.
• Mollick's conclusion in that report was that backers "should expect a failure rate of around 1-in-10 projects, and to receive a refund 13% of the time" (Kickstarter Fulfillment Report).
• Mollick's advice to creators in that report was to plan for failure by "keeping lines of communication open and explaining how the money was spent" — an after-the-fact version of the same breakdown you publish before collecting (Kickstarter Fulfillment Report).

A narrow scope also makes follow-through easier: you can show what happened against the same clear plan fans saw before contributing.

How do you write the “where it goes” section?

Write it as four short lines a fan can read in a few seconds: name the goal, break down the estimated cost item by item, state what changes once the goal is funded, and say where any surplus goes. That order answers the questions a contributor asks in sequence, and it covers the fund-use disclosure the FTC's crowdfunding guidance asks for.

Use this structure:

1. Name the goal. “Raising for a new ring light setup.”
2. Break down the estimated cost. “An estimated $150 for the light, $90 for stands and diffusion, and $20 for cables—$260 total.”
3. State what changes when funded. “This setup will improve the lighting on future videos, not just one upload.”
4. Address possible surplus. “If the final cost is lower or contributions exceed $260, the remainder will go toward replacement bulbs and lighting accessories.”

The $150, $90, $20, and $260 figures are illustrative wording examples, not platform-set amounts or requirements.

Combined into one block, the four elements read as a single quotable paragraph a fan can act on in a few seconds:

"Raising for a new ring light setup: an estimated $150 for the light, $90 for stands and diffusion, and $20 for cables—$260 total. This setup will improve the lighting on future videos, not just one upload. If the final cost is lower or contributions exceed $260, the remainder will go toward replacement bulbs and lighting accessories."

For guidance on where this section belongs and how to write the surrounding title, suggested amounts, and call to action, see what to put on a project support page.

Frequently asked questions

Do I need to show exact receipts for every dollar?

No. The FTC's crowdfunding guidance asks creators to "use the money raised from crowdfunding only for the purpose represented" and does not require published receipts (FTC Business Blog). A short, honest breakdown of the principal costs is more useful to fans than a public ledger; after funding, close the loop with a brief “here’s what I bought” update, as in keeping supporters updated on a creator project.

What if I do not know the exact cost yet?

Use your best estimate and label it clearly: “Roughly $300 for gear; the final cost may vary slightly.” An explicit estimate tells fans what you currently expect without presenting an uncertain figure as guaranteed.

What if contributions exceed the listed breakdown?

Explain how the surplus will support the same project. For example, if an illustrative $400 goal receives $460, you could write: “The additional $60 will go toward a spare cable and backup battery for this setup.” Name the actual use instead of leaving supporters to guess.

Do I need to update fans once the goal is reached?

A follow-up update is the clearest way to show that you used contributions as described. Wharton professor Ethan Mollick's advice to creators in the Kickstarter Fulfillment Report was to keep "lines of communication open and explaining how the money was spent," and only 65% of backers in that study of 65,326 funded projects agreed their reward arrived on time. A short note stating what you bought, what it cost, and how it is being used is enough.

What happens if I spend contributions on something else?

You risk a federal deception action. The FTC has brought two crowdfunding cases on exactly that fact pattern: a $111,793.71 suspended judgment against a board-game creator who raised more than $122,000 from 1,246 backers (FTC press release), and a permanent crowdfunding ban plus a suspended judgment of nearly $800,000 against an operator who raised more than $800,000 across four campaigns.

Ready to set up a transparent goal? Create your free FanBell page and add a Project Support goal with a clear breakdown of what it funds—creating a page costs $0/month, a FanBell funding bar shows that goal filling in real time, and you keep all but the 12% platform fee, which FanBell charges only when a fan contributes.