Knowledge bank

Emily Speed on how crowd-funding uses the Internet to manifest new possibilities for revenue streams, turning small stakes into big ideas.

Crowd-funding uses the same principles as crowd-sourcing, where high quality information or knowledge is sourced from a large group of people. In the case of crowd-funding, information is replaced by cash. One funding platform, Sponsume.com, uses the strap line 'Small stakes in big ideas', and it is this idea - that many small donations will add up to a lot - that crowd- or peer-funding embraces. This is a different form of patronage greatly enabled by the internet and social media websites. It takes the focus away from a central organisation and appeals to those with an interest in the arts and peers who wish to support great new ideas and help new work be produced. Peer-funding operates with an open source ideology familiar to computer software, so unlike traditional grants and awards, it embraces transparency and honesty. 

How does it work?

All of the websites vary, but this is a rough guide to the largest online crowd-funding platforms:

• Users create a profile and outline their project. You ask for an amount of funding and give a time-frame in which you want the goal to be achieved.
• Profiles are generally free, with a charge of between 3-12.5% for processing donated monies.
• You can ask for amounts up to £25,000 on some of the fundraising platforms, but pitching your project at an achievable total will increase its chance of success. Most sites feature successful projects so look at the average amount achieved. If you are offering rewards, calculate the cost of that into the total.

• Money is not taken from investors' accounts until the total is reached. Some sites have an 'all or nothing' policy, so if you do not raise the full amount of funding, you will receive no money at all. As Sponsume explain: "The rule is there to avoid situations in which project creators are committed to completing a project with less funding than they regard as necessary. Such a situation would be unacceptable to creators, their sponsors and Sponsume."
• Most sites allow over-subscribing, so you can raise over your target amount.
• Investors can often cancel before the deadline, so add between ten and fifteen per cent onto your target to allow for this.
• You keep your own copyright - investors are not buying equity in your product or the right to your intellectual property, they are funding production.
• This is a business contract so if you are successful you must complete the project, or pay investors back.

Research

Have a look through all the different websites available for project fundraising. The quick guide in the links below gives some advice about the focus or approach of each one, but it's always best to decide for yourself which one feels right for your work.

Nearly all of the websites listed below have fantastic and comprehensive FAQ sections. Do read them as they may cover issues you hadn't previously thought about. The same applies to forums or community sections of the websites; these often contain great advice.

The majority of websites also have a 'successful projects' section where you can read their original pitch and see how they have developed since receiving funding. Looking through these will give you a really good idea of the kind of budget and timescale that tends to be funded. Finding projects with a similar scope to your own will help you pitch at the right level. Similarly, you can also review unsuccessful projects, which may be equally (or more!) valuable. 

Posting your project

Visual arts are not currently well represented on crowd-funding websites. Most projects looking for funding are films, books, animations, dance, performance or music based. As this model has been adopted for some time by book and music publishers in the form of pre-orders, these areas have a head start. This is therefore a great time to get your project online as those looking to support the visual arts will have less to choose from! Most peer-funding platforms enable people to appeal for a specific project, so it is important that the project is well-thought out and has integrity, as this is a one-off opportunity.

• Essentially, this is a business pitch looking for investors: so you need to communicate the importance of your project and encourage people to support it, which means being enthusiastic and confident. This does not mean you need to be cheesy or plead for money; just show some genuine passion for what you do.
• Watch your art language: some people pledging money will work in the arts, but many just appreciate the arts so be clear and concise in your project description. A bombastic statement will most likely turn people off.
• Get it proof read.
• Don't post it online before you are ready and if you are including links to other websites (including your own), make sure they are also up to date.
• Use good quality images or videos that are relevant to the work.
• Be really honest with yourself. Is a project you really want to do? Crowd-funding is a highly visible platform and is not necessarily an easy way to get funding, so do make it a really great use of your time.

Rewards

Some funding platforms require rewards in return for donations, although others just recommend that they are included. This adds an incentive for investors. Some examples of rewards are: an exclusive download, a discount, a special edition of a zine or print or a private preview of a new work.

If you are used to producing unique works of art then you need to be creative: rather than sending out hundreds of unique sculptures, you need to think of a way of disseminating the results of a project in a way that is both satisfying (for you and the investor) and that is also efficient.

A tiered system is a common way to organise rewards, for example: if someone donates at least £5, they get a mention and thank you on your website; a donation over £20 could receive a limited edition print; and donation over £500 receives a private studio visit and bespoke work. Something like a studio visit might be a draw to someone who really likes your work, but costs you very little to deliver, other than time and biscuits.

Spreading the word

Kickstarter claim that around half the projects they feature make their funding goal - a figure that is comparable to, or higher than some UK regions in the Arts Council England 'Grants for the Arts' success rates. However, rather than the traditional 'slave over application form-submit form-wait' process, this funding method requires a different and perhaps more proactive commitment. With most sites offering buttons and embedded links for social media sites, there is potential to turn into a spammer. So in addition to planning the project well, significant thought needs to be put into marketing strategies like blogging/tweeting so you don't alienate everyone you know.

Cassandra Harrison successfully raised $800 (US Dollars) towards a touring exhibition of works exploring themes around heritage. The exhibition will travel around the UK and will also go to Nebraska, where the artist is originally from. She reached this impressive total with support from just twenty-one funders and has added fifty-four updates on her progress. On raising the funding Harrison says:

"I tapped into my network of friends and artists as well as my network of followers on Twitter to explain the project and the need for additional funding. I feel quite lucky with the response I received; however, I do feel that part of that is down to my own excitement about the project as well as the research that has already gone into making it happen. I even had a couple of people that I didn't know put their faith in my project with a helpful contribution. I believe that crowd-funding is the way forward for artists and small organisations to make their projects a reality."

Bronwen Hyde, an Australian artist who will relocate to London this year, successfully raised $1,665 (Australian dollars), which was seven per cent over her $1,500 goal. She achieved this with just twenty-three supporters. This will fund a one-month residency at Hospitalfield in Arbroath, Scotland, from mid-April 2011, where Hyde will continue creating images for her interior / exterior series, exploring the relationship between self and environment. Her advice to potential users of crowd-funding sites:

"The best advice I have about using a site like Fundbreak is advice from the site owners themselves: you need to believe in your project and be committed and enthusiastic about it, and though it might seem awkward and uncomfortable at first, be willing to promote it and talk about it to others, even people you don't necessarily know so well."

If you don't enjoy using social media or don't feel comfortable promoting your own work, then clearly this avenue may not be for you. You could, however, enlist the help of a friend, which may also add some objectivity to the process.

Outcome

Remember that transparency and honesty were mentioned earlier? This approach means that content on many websites, including unsuccessful projects, doesn't get deleted. Another incentive to be sure of your project before putting content online as it may pop up in the future when you're being Googled.

If you are successful then it is considered good practice to update your project and progress online, as well as keeping in touch with investors. You also need to make good on your rewards and actually complete the project. This is a business contract you are entering into so you must honour the work that people have helped to fund. If you cannot complete the project then there are ways of refunding pledges. Most funding platforms also encourage projects to be completed within nine to twelve months and for users to seek feedback from investors.

If you are unsuccessful, then try not to take it personally! Remember that crowd-funding is also a way of testing reaction to ideas; if they don't get funded, perhaps they are more suited to a specialist audience, or perhaps they need to be re-thought completely. You can't usually post more than one project at a time as this is thought to dilute interest and divide funding, but you can post as many times as you like. If you feel for example, that your marketing let you down, then why not try again, tweak your project and use a new approach, especially as posting is free in most cases.  

References

Cassandra Harrison's successful pitch on Indiegogo and blog:www.indiegogo.com/Heritage-and-Generation-touring-art-exhibition
teatowelsandsheets.wordpress.com
www.cassandraharrison.co.uk

Bronwen Hyde's successful pitch on fundbreak.com: www.fundbreak.co.uk/beta/index.php/archive/index/101/description/0/0
www.bronwenhyde.com
Hospitalfield: www.hospitalfield.org.uk

Open platforms for peer-funding

www.sponsume.com
Creative, social and entrepreneurial projects. Worldwide.

www.pozible.co.uk
Creative projects. UK only.

http://wedidthis.org.uk
Creative projects from artists and organisations. Uk only

www.indiegogo.com
Creative, social and entrepreneurial projects. Worldwide. No 'All or Nothing' policy

www.fundbreak.co.uk
(UK in Beta) Creative Projects. Worldwide

www.inkubato.com
Creative projects and inventions. Europe.

en.fansnextdoor.com
(Beta) Creative Projects. Worldwide.

www.kickstarter.com
Creative projects only, currently limited to USA with plans to expand.

www.rockethub.com
(Beta) Creative projects. US Based, but international. Must offer rewards.

www.catwalkgenius.com/home.asp
Supporting fashion designers.

www.chipin.com
Fundraising for events

www.gofundme.com
Any project or cause. Donations are received instantly.

www.crowdcube.com
(Beta) New businesses.

www.startnext.de
(Beta) Germany.

Other formats for peer funding

www.quirky.com
Submit designs for your idea to be manufactured and sold via community curation.

www.kachingle.com
Supporting free online content (great for bloggers!).

www.artistshare.net
Music. By application/invitation only.

www.slicethepie.com
Music. UK based but available worldwide.

www.biracy.com
(Beta) Film, contribute to development, requires referral.

Links

Micro-philanthropy
Ed Whiting, founder of WeDidThis.org.uk discusses the funding opportunities crowd-funding provides for both arts organisations and artists with Jobs and Opps editor, Lauren Healey.

Emily Speed

Emily Speed is an artist based in Liverpool.

www.emilyspeed.co.uk

First published: a-n.co.uk January 2011