Crowd fundingPosted: 2 June 2011
I was on a panel recently chatting about funding with Rick Chen from crowd funding website Pozible. Crowd funding is described (on Wikipedia, the font of all my knowledge) as “the collective cooperation, attention and trust by people who network and pool their money and other resources together, usually via the internet, to support efforts initiated by other people and organisations”. Pozible is specifically for creative projects and ideas. Creative types can load a project on the website for which they are seeking support, and anybody on the planet can give the project a small or large amount of money, or anything in between.
I was pretty excited about the Pozible model, and impressed by its success in its first year. Rick said there’s been a 60% success rate, which means 60% of the people who’ve put projects up for support have successfully reached their fundraising target. Not bad.
The first time I heard about this type of funding was at the Grantmakers in the Arts conference in Chicago last year. There are a few different types of crowd funding. Some sites house projects which have the capacity to offer tax deductions and others provide a ‘gift’ in return for your support. At the conference I heard about some really amazing examples. United States Artists was seeded with $22 million from a coalition of foundations (Ford, Rockefeller, Prudential and Rasmuson) and in 2010, launched the first “micro-philanthropy” site for artists. I also love the thinking behind Community Supported Art. Combining my two loves – food and art – CSA was inspired by the increasing trend of consumers buying seasonal produce directly from local growers. They’ve applied that same theory to the arts. Community members can buy a ‘share’ which gives them three ‘farm boxes’ containing art works from local artists. I may be getting away from crowd funding a bit here, but I think it’s a really innovative way to get a collective of funders to support an artist’s work.
I was excited about Pozible because I see it as part of a new wave of philanthropic initiatives. It was pointed out during Rick’s presentation that the ‘donations’ are not really donations because, in Pozible’s case, you get something in return (called ‘Rewards’ on Pozible and ‘Perks’ on United States Artists). In the legal sense, that’s absolutely correct. You’re getting something in return for your dollars and therefore you’re not entitled to a tax deduction. But philosophically, it sort of feels more like philanthropy to me. What you’re getting in tangible terms is usually something small like your name on a website or a signed copy of a book or CD. What’s far more valuable to the giver is that warm fuzzy feeling that you’ve been part of something. Knowledge that you, along with many others, have contributed your small part to actually make something happen. Given the sense of community it brings, I think there’ll be a lot more crowd funding, and models like it, to come.