The NZFC’s Dave Gibson, the Arts Foundation’s Simon Bowden and PledgeMe’s Anna Guenther talked philanthropic, reward and equity crowd-funding, as the models mature and every Taika, Dick and Harriet gives it a go.
Ignoring the fact that Bowden and Gunether’s organisations essentially compete for crowd-funding business, in an increasingly crowded marketplace, what are the ups and downs of a crowdfunding campaign from a creator’s POV?
There’s no such thing as free money, as Taika Waititi found after committing to rewards that took a lot longer to deliver than expected. There is, at least with Boosted, a tax rebate, since Bosted differs from other models by making pledges tax deductible while everyone else offers more emotionally appealing rewards.
Regardless, Boosted has a better success rate than other platforms. Guenther was too polite to point out that, while PledgeMe has been up and running for a few years and helped raised over $3 million for over 700 projects, Boosted has presented a much smaller number of projects, and a smaller percentage of the screen production projects, and has tighter criteria around what projects it accepts. Boosted currently host a single film campaign (Rebecca Tansley’s Kiwi-Italian arts doco Concerto), while PledgMe has half a dozen live, and has successfully funded dozens of screen campaigns this year, including all 10 titles from the inaugural round of Loading Docs.
Across all projects, PledgeMe’s success rate is a shade below 50% against Boosted’s 65%+.
Both companies run an all-or-nothing model, so campaigns either hit the target they aim for, collect the dosh and pass go, or go home empty-handed. Other sites, such as IndieGoGo, allow campaigns to collect whatever money is raised.
Bowden argued against that approach, saying the pressure to meet the target could be a positive in attracting support. It also offered some level of comfort that a successful campaign would deliver on its aims, while a campaign which – for example – raised 40% of its target might not be in a position to deliver on its intentions, but had received money to do so.
The new kid in town is Equity crowdfunding, where funders are offered a commercial return on an investment rather than the feelgood return of a signed photo or set visit or screen credit in return for a donation.
The difference was described as the difference between the pleasant, possibly rewarding but not committed activity of dating vs getting married with its more serious intent, legal commitments and requirements. Robin Scholes’ upcoming production of Lee Tamahori’s The Patriarch has recently become the first NZ screen production to get hitched, attracting over $300,000.
Whichever model is used, whichever platform is used, Film Finances’ Anni Browning noted that the result of a crowdfunding campaign needed to be known before finance could be closed. There might be some wiggle room on that, but it would be best to assume not.
So, while the money isn’t free, isn’t guaranteed, and isn’t necessarily huge, what interest does the NZFC have in crowdfunding.
A number of different potential areas of interest, Gibson suggested.
Specific to the Equity model, he noted that the NZFC would have no problem with crowdfinding cash getting out before any NZFC investment. There might be an issue with the terms and returns being offered, he said, and recommended that people considering Equity crowdfunding talk with the NZFC before putting out their proposal.
In a broad sense, Gibson noted that pretty much every feature coming into the NZFC for production funding now was arriving with private equity committed in some shape or form. Crowdfunded or not, that might mean over a year that the NZFC “saved” enough production funding to support an additional film, which had to be good for everybody.
More directly around crowdfunding, Gibson spoke about matching funds. Loading Docs had run such a campaign on PledgeMe earlier in the year, where projects able to raise over $2,000 had received a matching $2,000 from organisers.
Gibson has had discussions with Australia’s Screen West, which has also successfully run a matching funds programme for short films raising part of budget via crowdfunding campaigns. The NZFC hadn’t settled on a firm approach and was open to discussions, even on a project by project basis, and is currently in discussions with one project to offer funding on such a basis.
It won’t be a case of taking “matching” literally, as the funding ratio might well not be 1:1. For example, on a million dollar project, the NZFC might be prepared to put in $800,000 at a rate of 4:1 against any funds raised privately.
There would be some scrutiny around such ways of putting the package together, however, for a couple of reasons. Firstly, if a crowdfunding campaign capped the value of individual contributions (thereby requiring a large number of people to support the campaign to achieve the funding target) that could offer some confidence about the project’s market appeal in the absence of attaching a distributor.
More pragmatically, Gibson understands what happens when thresholds are introduced to any sort of scheme. When the SPIF scheme was first introduced, it didn’t take long for projects that had previously been $3 million features to become $4 million features to trigger the incentive. A matching scheme runs the risk of doing the same thing. The $800,000 project becomes a $1 million project so the NZFC’s 80% contribution (at 4:1) delivers the production budget and the 20% of crowdfunded contribution becomes cream.
With such risks mitigated, it would mean that the NZFC will be able to support projects either in number or type, that it wouldn’t be able to support otherwise. It would also give filmmakers with confidence in the market appeal of their projects an opportunity to run successful campaigns and convince the NZFC of the market appeal of their idea.
To help producers get a handle on it, the NZFC is gathering info on levels of private equity in NZ productions and will report those numbers, along with some slicing and dicing to help show where that money is coming from and how it’s coming (crowdfunded for reward or as equity, for example).
From the audience Peter Young (The Last Ocean) said running a crowdfunding campaign was exhausting. “Is it like childbirth?” he asked. “Do people forget and come back and do it again?”
Apparently they do – although Guenther agreed it’s a gruelling thing to undertake. PledgeMe is currently running an equity crowdfunding campaign for itself, to enable it to expand and introduce new services. When it comes to running a campaign, there’s not an app for that, but there is help available.
PledgeMe, Boosted and other platforms all offer help with planning a campaign. Bowden and Guenther shared a selection of tips and tricks from the pre-priming of key donors to deliver their pledges to an agreed timetable, keeping a project’s momentum going, to when to launch and close a campaign, how long to run, etc. Bowden also recommended that rewards should come from the project (eg give away props, offer set visits) so that delivering rewards doesn’t become a full time commitment for someone.
There are also, naturally, people who’ll do it for a fee, people with bulging black books who can hook a project into networks of people or interest groups where it has a good chance of finding favour, and funding. So, like for every other aspect of a project, the advice was to plan it early – integrate the campaign into the financial planning, into the social media plan, possibly even into the content, from the word go.
Gibson also suggested that while there would always be examples of projects and strategies that worked well, the only constant in the crowdfunding arena was a state of flux. Creative out of the box thinking (“something you’re reputed to be good at”) was as good a tool as any for developing a successful campaign.