Crowdfunding offers alternative support in Internet age

Crowdfunding offers alternative support in Internet age

mag_dec2016_coverThis article first appeared in the December 2016 issue of Life in Québec Magazine.

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Crowdfunding offers alternative support in Internet age


By Gordon Lambie

Necessity may be the mother of invention, but carrying a business idea to fruition requires money. Whatever the project, from independent films to innovations like roads which generate solar power as cars drive on them, many creators these days look to online crowdfunding services to find the support they need.

“The term ‘crowdfunding’ was adopted around the same time that Kickstarter was created [in 2009], and it became this loose, catch-all term that describes funding by lots of people, in small amounts, on the Internet,” explains Justin Kazmark, communications representative for Kickstarter. Along with Indiegogo and GoFundMe, Kickstarter has become one of the go-to names in the business.

According to Kazmark, the crowdfunding model is nothing new. Even Alexander Pope, Mark Twain and Ludwig van Beethoven relied on group support at times, he says. He emphasizes, however, that adapting the model to the Internet age has simplified the process and made it accessible to a wide range of users.

He explains that his company has committed itself exclusively to funding creative projects, while others, such as GoFundMe, have chosen to allow fundraising campaigns for personal projects or humanitarian campaigns such as disaster relief.

“If you’re artistic, being alongside other creators is important,” Kazmark says, arguing that blending project types puts potential donors in an uncomfortable position where they have to decide between their interests and their conscience. “It’s not necessarily a good thing [for an artist] to be next to a project where somebody’s asking you to contribute to disaster relief.”LiQ_Sub_Dec2015

Québec-based musician and Phil Collins tribute artist Martin Levac swears by crowdfunding, which he says he has used for two different projects.

“I would do it again any time,” Levac says. “The first time, I asked for $5,000 and I reached my goal in four days. The second time, I asked for more and I got more.”

The musician says he turned to Kickstarter in 2015 after significant research because he was looking to tap into the largest possible audience for his fundraising.

“Kickstarter was already more popular than anything else,” Levac says, adding that he felt the site’s global reach was well suited to his existing, geographically dispersed fan base. “You don’t do a Kickstarter campaign if you have 100 friends on Facebook.”

Levac stresses that a successful campaign calls for research in advance and dedicated promotion over the duration of the appeal.

“For 30 days you have no choice but to share; otherwise, you don’t get any results. It’s all based on the network you have,” the musician says. “We must have sent 50,000 messages to get around 200 backers. If you’re alone and you don’t have a network, it’s impossible.”

Tricia Caldwell took to GoFundMe to raise money for her “Tunes for Tots” project at the end of September. Caldwell, a musician based in Québec City, says although she has far surpassed her fundraising goal for the project, she doesn’t see a big link between that success and crowdfunding.

“What I’ve noticed is that nobody is using it,” Caldwell says, adding, “When you see the total amount on my GoFundMe page, it says I’ve raised $100 of my $20,000 goal.”

Caldwell says she saw a divide between people supporting the idea of the project with small donations online and people who were using her service donating larger amounts in person. She says she’s open to the idea of using crowdfunding again but might do more research to choose the service best suited to her needs and the best way of reaching potential donors.

“I jumped into it without really researching the best way to launch on that kind of platform,” Caldwell says. “It was easy. The fact that it took me five minutes to set up and I got $100 is still pretty good.”

Working through GoFundMe works to Caldwell’s advantage in that she will get her funding despite not meeting her campaign goal. Kickstarter, by comparison, works on an “all or nothing” system that Kazmark calls a key part of the company’s model.

“The reason all or nothing is so important is it creates the right incentives for everybody,” he says, pointing out that creators in the system know they won’t have to try to make the project work under budget and backers know the project they support will come to fruition.

“It also creates a narrative arc,” says the Kickstarter spokesperson. “It creates this sense of urgency that really draws people into the Kickstarter story, getting the people who back the project emotionally invested in seeing the campaign come to life.”

Whereas the big crowdfunding services are entering a global marketplace, one Québec company has taken the model in a different direction.

For La Ruche, crowdfunding is all about tapping into local energy and improving smaller communities.

“In order for a project to benefit from the platform, the project needs to leave an economical or cultural mark in the region,” explains co-founder Jean-Sébastien Noël. “It’s a little bit counter-web, in a way. All major crowdfunding sites are built on the premise that you can reach millions of people, but projects that focus on proximity don’t get far. The guy from New York doesn’t care about a restaurant in Québec City. Local projects need a local approach.”

La Ruche, a non-profit organization, has worked to become the crowdfunder for the Main Streets of Québec.

“The only thing the projects share is that they’re all neighbours,” says Noël, who calls the work “proximity crowdfunding.”

“By being close, by being neighbours, by being able to talk to one another, we envelop the virtual crowdfunding aspect with a human aspect,” he says.

Since it was founded in Québec City in 2013, La Ruche has seen 190 projects put forward, 125 of which have been successful. More than $1.3 million has been donated by more than 10,000 backers, and the organization is expanding.

“We’ll cover Québec in two years, maybe,” the co-founder says. “Each Ruche is unique. It’s locally based, with its own ambassadors, but we’ll share the online traffic.”

“The Internet is not just about reaching across the globe,” Noël adds. “It’s great to save the world, but the world could be next door.”
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About Author

Gordon Lambie

Gordon Lambie grew up north of Montreal and now lives in Sherbrooke, Quebec with his wife, daughters, and cats. Having studied English and Secondary Education at Bishop's University, he now works as a reporter. He enjoys good books, wood carving, and building things out of snow.

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