The Granddaddy of crowd-funding platforms is Kickstarter, founded in 2007, which has thus far raised over $500 million for the arts, not to mention other types of venture. But it now has a new challenger, in New Zealand at least – PledgeMe was founded last year, and has just celebrated their first NZ$1 million raised for artistic and cultural projects here in Godzone.
Anna Guenther, the “brain & inspiration behind PledgeMe” and the “non-tech side” (her description) of the duo who created the business, aimed to illuminate the art of funding the arts in New Zealand by providing hints and tips for achieving success through such a platform. She was accompanied in this by Karl Sheridan, a successful fund-raiser through PledgeMe.
There are now over 300 crowd funding platforms around the world, including at least 10 in Australia, and four in New Zealand – plus the Arts Foundation’s recently-announced Boosted, aimed at purely philanthropic giving as opposed to the reward-based system that crowd-funding platforms normally use.
Kickstarter remains the largest of these 300 platforms, having been used by over 35,000 projects, of which roughly 45% have been successful in reaching their target. Of those, some 30 or so have raised over $1 million; and it is not uncommon for people to exceed their target by considerable amounts – one Kickstarter project targeted $100,000 but raised $1.2 million.
In simple terms, if you have a project for which you need some funds you apply to the crowd-funding platform, stating who you are, how much money you want, and what you want to use it for. But not all projects are accepted; there is a vetting process. Most crowd-funding sites (including PledgeMe) employ a “target or nothing” approach: i.e. you set a target, and if you reach it or exceed it then you get your funds, minus credit card fees and a commission (usually about 5%). There is the occasional site which gives you whatever money is pledged to your project irrespective of whether your original target is met or not; but these sites charge a greater commission (commonly 9% or so).
PledgeMe, like the Australian site Pozible which tried to establish some ground here last year, is aimed chiefly at arts and cultural projects (mostly music, visual art, live theatre and film). Kickstarter, on the other hand, also entertains commercial ventures, such as the latest innovation in widgets for your vacuum cleaner or hairdryer.
Thus far, PledgeMe has had 254 ventures successfully funded. Film projects made up the majority of these, including a significant proportion of documentary. The average target is $3500; though one documentary, the Doc Edge winner Gone Curling, managed to raise over $21,000 towards taking their film to festivals overseas. The average size of the pledges is $70, though the most common size of the pledges is $20. There have been 15,000 pledges, of which 15% are based overseas, which according to Anna “shows how connected Kiwis are”.
The critical factor in the crowd-funding campaign is of course the size of the crowd. And who makes up a crowd? Initially it’s your family and friends. From there it depends on how far those family and friends are willing and able to spread their tentacles. Anna Guenther sees this process as not just fundraising but also creating an off-line community around a project.
The length of a PledgeMe campaign can be anything from five days to two months. 30 days is regarded as a good length, although one project managed to raise $10,000 in five days. It is possible to pledge anonymously, although I imagine that makes it impossible to collect a reward. Pledges are not processed, i.e. your money isn’t taken from you, until the deadline date. If the target is not meant, no money is taken from you at all.
On each campaign page on the website there is a running total of funds raised to that point, and a box showing how much time is left for the campaign to run. There is an ‘Update’ section, which generates e-mails to all previous pledgers, should they want this. Updates do not always directly relate to funding; regularly letting pledgers know how the project is progressing can contribute to a campaign’s success. Overfunding happens quite often; some people manage to reach double the target. Others who are unsuccessful come back and try again with a lower target, and succeed. Facebook is recommended as the easiest way to connect with everyone in regard to updating pledgers.
A question was raised about repeat campaigns. One film created two campaigns, one for production and one for postproduction. One theatre project set up a campaign for Wellington and another one for Auckland; the campaigns both worked because they were location specific. However, if one is to do two campaigns, it is necessary to leave a decent gap in time between them. The Pozible team from Australia warns against doing multiple campaigns, suggesting that the majority of people who have pledged to a first will ignore the second, saying to themselves, “No, I’ve already done my bit for them.” In other words, a second campaign is of necessity almost starting from scratch – even the people in your e-mail address book and on your Facebook friends list are unlikely to contribute twice to the same project.
I had always understood that crowd-funding and crowd-sourcing were simply different terms for the same phenomenon. But it seems I was wrong – at least as far as PledgeMe are concerned. Crowd-sourcing is based on the notion that a large group of people will come up with better ideas than one person thinking on their own. Crowd-sourcing can involve asking your pledgers for ideas on how to improve the project. One campaigner solicited ideas for costume designs for her show, for example. The benefit in adding crowd-sourcing of some kind to your crowd-funding campaign is in creating an off-line community in support of the project, increasing the level of involvement of those people in a way that will encourage them to make more of an effort on your behalf, as well as giving them a greater sense of satisfaction as a result of their involvement. The PledgeMe people would regard involving pledgers in your process, as well as taking their money, as critical to a successful fundraising campaign.
Pledges of support do not always come in the form of cash. Many people who wish to support a project may not be able to donate cash, but are able to contribute in some other way. Hard to find props can be solicited for use in a film, for example; in one case a post-production house were not prepared to give cash, but were willing to give time in their studio to the film project. This method of giving seems to be especially popular with documentaries. Music sponsorship is common.
Anna Guenther strongly advises filmmakers to keep some leftover funding for DVD packaging!
A good deal of the discussion was devoted to the notion of “rewards”. A critical element of crowd-funding platforms is the idea that one is not just asking for a pure donation; rewards are offered in return. The usual process is to have several tiers of reward; the more you donate the bigger and presumably the more valuable a reward you get. But it is also possible for pledgers to opt to not receive a reward (roughly 20% do so), or to accept a reward from a lower tier. Many contributors are happy simply to have their name listed in the credits of a film. Apparently photos of credits on your screen are very popular as a reward, since they can be easily loaded onto Facebook, for example.
Karl Sheridan described how his project offered eight tiers of rewards in $50 increments. For $5 one would be thanked on the website, while $1000 would get you a mural of your own painted at your place – appropriate since the film was about mural artists. But Karl also described how he had to learn the hard way regarding the nature of his rewards. They were quite generous, and quite a lot of money went back into fulfilling the rewards – a trap for novices. He also advises against offering to hand-sign and number DVDs or posters; doing 500 of these took him a long time.
But for Karl, the most intriguing observation made over the duration of the process was that it was the project that was exciting to potential pledgers, rather than what they could get out of it. Being part of the project seemed to be more important than the reward; people felt gratified that they had helped something happen.
Anna strongly advises lots of careful discussion when creating a project, particularly in regard to rewards. Try to think of unusual kinds – think of something that one couldn’t get anywhere else, something novel. Once rewards are set in place they cannot be changed, but one can of course add new ones. This can be useful in updates.
Past rewards that have proved popular included writing a pledger’s name in the snow in the filming location and sending the pledger a photograph of it. One music group offered to come and mow the pledger’s lawn for $75; while the lead singer offered to kiss a poster and hand-write a lyric on it.
Associate producer credits have been offered for pledges of $500 or more; some projects have offered a date with the director to discuss how the project is going during the making of the film. Gone Curling offered the opportunity for a person to go to Naseby and take part in a game of curling with the stars of the film – for $700. But the best reward of all offered so far: to create a new religion based around the pledger. A new religion has sprouted in Wellington…
The PledgeMe website has a blog where there’s an item about the most novel and effective rewards offered so far.
Crowd-funding is not usually seen as the sole source of financing a project; more commonly it is an adjunct to other forms, such as sponsorship. Karl found that getting publicity in local newspapers and on radio and television always produced a spike in pledges.
To end the session, Anna offered a list of tips:
- Keep your introductory pitch clear and short. People have short attention spans, and simply want to know who you are and what you want the money for. For all the extra information about the project that you want to supply, provide links to other websites and your Facebook page.
- List only one or two things that you wish to fund, no more.
- See the campaign as a journey, involving more than just fundraising
- Make your own personal project page on Facebook.
- Make it personal, say thanks to everyone, keep returning to people – they want to know that pledging makes a difference.
- People do want to see value in what they give; hence the need for updates.
- It is as much about you as it is about your project. People want to see you in it, so make sure that you talk about yourself and your team. People want to connect with you.
- A video clip is worth, not a thousand, but a million words. Filmmakers, according to Anna, seem to be the worst people at making pitch videos; it’s amazing how many filmmakers don’t want to go onto screen themselves! But people want to see you in it. You are 117% more likely to get funded if you have a video clip.
If you are a novice to the process, do not worry. PledgeMe have people based in Auckland, Wellington, and Christchurch who were able to consult and advise before you start your campaign. It’s also possible to talk to Anna by Skype.
Crowd-funding seems to be sweeping the world. For a little while now I’ve been wondering when a point of saturation might be reached – but there seems to be no sign of that yet.