I have a confession to make. I’m a crowdfunding addict. Or as I think of these emerging platforms: peer-funding. For the first time projects can be funded by those who share the passion and vision of the creator. In other words, not the anonymous crowd, but your global peers getting together and saying “let’s make this happen”. That’s new, powerful and very cool.
Peerfunding (or crowdfunding, if we must) is the facilitation of numerous small contributions to fund specific, time-limited, projects. Crowdfunding is an offshoot of crowdsourcing, the buzz term from a couple of years ago that gave us talent-mobilizing sites such as GeniusRocket for creative and InnoCentive for scientific problem-solving, outsourcing these functions to the crowd. But this new breed of sites are different, and not just because they are asking for money instead of logo designs or film concepts. Crowdsourcing is focused on producing a unique high-quality contribution (be it logo or film or chemical breakthrough), harvested from the crowd, these new funding platforms work cumulatively. Just as Barack Obama proved the power of small dollar fundraising in the political world we are now seeing the power of small dollar philanthropy in new sectors, especially the arts.
This model first caught my attention in the lead-up to this year’s Burning Man, as numerous arts collective raised funds for their projects on Kickstarter. It was really exciting to see some of the amazing things in development and to be able to support in my own modest way a couple of projects I thought were most exciting. And I’ll admit it, I did it for the perks too, including the promise of a ride on a very cool artcar (which I never took them up on sadly).
The focus on perks is another unique feature of this model of these new platforms. Across all the leading sites it is required that projects articulate “perks” for their funders. And I don’t mean the usual “feel good about yourself” perks, I mean “give me something cool” perks. This works perfectly for many creative projects that are object-oriented – if it’s a zine or book you can receive it (signed!), if a film you get a dvd or a credit, if an exhibition or catelogue a print. Digital projects tend towards the thank-you pages and downloads of code (woot). At the higher amounts everyone has to get more creative: dinner with the artist; consulting; an event at your house; an award in your honour.
It’s all fun stuff, and it beautifully fuses the line between philanthropy and straight-up shopping. I have always enjoyed purchasing hand-made zines, now I simply pre-buy them and in so doing give the creator the confidence and funds to make it. I enjoy film, and spend money on a Netflix subscription, so why not actually chip in to see documentaries on issues I think are interesting or important made? Some of the projects on Kickstarter in particular have blown out their fundraising targets by seemingly-absurd amounts, raising 1000%+ of their goal, but this is usually really just an unexpected run on a groovy new product. Being quasi-philanthropy and quasi-shopping simultaneously attracts more supporters than either approach alone would engender.
Over the past few months I have supported the publication of zines both micro-micro and merely niche via Kickstarter, production of a documentary on avant-guarde culture in Jerusalem via IndieGoGo, a series of social change posters via LoudSauce and the relaunch of a much-loved independent media website via the Australian FundBreak. There is also Spot.us, which supporters journalistic projects.
These sites are not all the same. Kickstarter and Fundbreak are exclusive to creative projects while IndieGoGo is broader and LoudSauce and Spot.us even narrower, specifically funding public interest advertising campaigns and journalism respectively. All of these sites except for IndieGoGo operate on an “all-or-nothing” model whereby if the project doesn’t raise its target by the deadline they receive none of it, with all contributions returned. This is a perfect fit for creative projects (and advertising campaigns) that have very specific amounts required to produce the project (whether it’s printing costs or tv time) or else it can’t happen at all. There’s a necessary tipping point. If it project doesn’t raise the necessary funds then the commitments are returned and its no-hard-feelings. It gives a security to contributors that the project will really happen or their money back and for creatives it reassures them that if necessary funds aren’t raised they’re not on the hook to those who have contributed thus far.
Not all types of projects have this tipping point and currently only IndieGoGo caters to them with a keep-what-you-raise system. This can create another, also important, sort of confidence, that those supporters people have been able to mobilize will see their support realized and delivered.
The biggest gap I see in the peerfunding space currently, in addition to having several valuable niches currently unserved, is that they are all based around one-off projects. There’s nowhere where you can create a stable profile for an organization or enterprise and then fundraise for specific projects over time – building a community across these projects and deepening your engagement with these supporters. I’ll have more to say about this soon.
Have you contributed to any projects on a peerfunding platform? What do you think is working and how could it be better?