Tesco’s now infamous slogan essentially refers to the power of saving and collecting small amounts over a longer period of time, which can add up to a lot. Similarly, memberships and friends schemes for cultural organisations capitalise on the power of collective income at small levels but from many people, which likewise could amount to a substantial figure as a result.
But with increasingly limited resources, many organisations, particularly smaller ones, are not in a position to raise money through these means. And as policy has hitherto ignored this issue, technology is now trying to address it. Artists and cultural organisations alike are now turning to online crowdfunding to fill some of these gaps and fundraise in a more innovative, engaging, proactive and cost efficient way.
There are now a few dedicated websites to raising money for discrete cultural projects in the UK, most with a slightly different USP but still operating on the same principles – that of collating small sums of money from many people.
Crowdfunding essentially works on the assumption that interesting work, the kind that people will pay to see, will attract support regardless of how much government backing it’s got. At the heart of the proposition is that audiences need to be involved, engaged and empowered. It is therefore a market-driven and democratic process, which gives consumers the power to choose what to support and how – and it gives them something in return too. Funders are offered “rewards” in return for supporting projects, providing an additional incentive for giving, giving more or giving again.
But crowdfunding always works best when it does indeed reach the ‘masses’, to cover a wide range of people and tastes and to therefore also increase the collective pot from which money can come from. After all, it is the possibility of extensive audience reach with relatively little effort and investment that is particularly attractive for those using crowdfunding to realise their projects. It therefore helps artists and cultural organisations save money on administration costs for marketing and fundraising, as the crowdfunding websites do the leg-work on their behalf – they set up and engage the community of donors so that all those asking for money need to do is tap into those individuals and attract their interest and donations.
However, many against public cuts in the arts have argued that if we leave the sector to the tastes of the public, the material that will be supported and consequently produced will be pedestrian, cheap and/or bland and with little or no artistic value. But a quick look at two of the crowdfunding websites for cultural projects in the UK (WeFund and WeDidThis), show quite the opposite: from opera, to community arts, anyone can pitch for funding and stands a chance of receiving some. And a further look into the kind of organisations that are being supported and how much with, exemplifies that this approach could in fact be quite lucrative.
Over the other side of the Atlantic, where this trend started, we see that crowdfunding is still growing at an extraordinarily fast pace. And though I have blogged about the pitfalls of comparing with the US, just as a reference, Kickstarter has funnelled more than $70 million dollars to creative projects since 2009 – quite impressive! And looking back to the UK, in the last year or so, We Did This funnelled more than £35k across 17 projects and WeFund more than £175k – that’s a promising start!
That said, many projects don’t get put on the sites and others don’t reach their fundraising targets, as demand (projects in need of funding) is clearly high and supply (donations) less so. Caution must also be taken not to cannibalise and alienate audiences by inundating them with too many asks and from different websites. Another challenge will be to get current funders to climb up the giving ladder and increase their donations over time, and to constantly refresh and renew the ‘pool’ of donors so as to make this a sustainable and, to a certain extent, reliable form of funding.
The government should now take note and contribute in making crowdfunding more mainstream and sustainable for the sector. Pledging some of its matched funding budget towards it, would be a good first step, as the more incentives funders get and the more impact their donations make, the more likely they are to give.
And perhaps part of that pot of money can go towards “subsidising” the overheads of smaller organisations, which are less sexy and fun to raise money for, but essential for survival