A few weeks ago, Tacoma’s Hilltop Artists program made online crowd-funding history: The organization teaching at-risk kids how to blow glass became the third-highest earning nonprofit art campaign on Indigogo.com, surpassing their goal to get $38,665 to replace their furnaces.
One month later, New Muses Theatre Company launched a campaign on Kickstarter.com for $1,300 to cover production of a new play. They failed to reach even half their goal and so, as per Kickstarter rules, got nothing.
Hilltop and New Muses are just two of many local arts groups (and thousands more nationwide) jumping on the crowd funding bandwagon. Since Kickstarter began in 2009 as a website where anyone can solicit funding and anyone else can give, it’s raised more than $1.2 billion to fund some 68,000 projects. Similar platforms like Indigogo and Power2Give are also seeing a big uptick as Web users – especially Americans – decide that it’s easier, quicker and more rewarding to donate online, and spread the word via social media. For arts groups, crowd funding sounds like a match made in heaven, and it can help enormously with instant money and new donors.
But, as New Muses found out, you need the right kind of campaign –and supporters – to succeed. And crowd funding as a movement raises bigger questions: What happens when celebrity projects and investment startups lure funders? Do online impulse givers become long-term supporters? And could the system eventually threaten traditional grant funding, and the crucial operating costs that those grants support? Or will crowd funding become one more thing Web users just don’t click on?
“This was the first online crowd-funding campaign we’d ever done,” says Kit Evans, Hilltop’s executive director. The 20-year-old organization’s $500,000 budget is funded one-third through grants, one-third through in-kind donations, and the rest from glass sales, donations and school district fees. (They teach through Jason Lee and Ford middle schools and Wilson High School.) But this spring they had a problem – one of their glass-heating glory holes started falling apart.
“We had an immediate tangible need,” Evans says.
But they also had other important assets for crowd funding: an attractive project that looked good on photo and video, a professional videographer on their board, the feel-good educational aspect, and an online-savvy community.
Hilltop’s record-breaking campaign to raise $30,000 for a new furnace, installation and maintenance soared well over the goal. Though most donors gave in the $50-$100 range – a statistic that’s echoed in most crowd funding campaigns – one couple gave $10,000, and another donor offered $5,000 if the campaign could double the number of donors. And Hilltop now has 60 new donors — the golden egg for arts groups in a post-recession era when foundations are fickle, corporations are fragile, and online giving is increasing by up to 13 percent yearly. Evans has plans for cultivating those donors, and plans another big campaign every couple of years.
“(Granting) foundations like it when you do innovative things,” she says.
Other local arts groups have also found crowd funding a good thing. The Tacoma Symphony, an 75-year-old organization with a $1 million budget, tried crowd funding for the first time last fall as part of Power2Give, a new platform created by the nonprofit ArtsFund. While the platform has limitations – only arts-based nonprofits are allowed and there’s a campaign cap of $7,500 – it also has a substantial donor base built in. The symphony raised the maximum amount to fund a free Mini-Maestros concert at the Lakewood Boys and Girls Club.
“We always need to be bringing in new (donors),” says TSO executive director Andy Buelow. “Crowd funding is the way of the future.”
It’s not an easy way, though. To begin with, the symphony’s supporter base “is not as wired to be online,” says Buelow, and the organization is trying to move into building committed donors rather than impulse givers, which online crowd funding tends to be. And while the symphony will do more crowd funding for specific projects, Buelow doesn’t see it replacing the bulk of TSO fundraising: an annual gala and grants of as much as $50,000 apiece from foundations and government.
“Just one Classics concert costs $35,000,” he says.
Not every idea works in the crowd funding world. Niclas Olson, director of fringe theater group New Muses, ran the Kickstarter campaign asking supporters for $1,300 to cover production of “R.U.R.,” the 1920 Czech play by Karel Capek that coined the word “robot” and raised the fear that they would eventually take over the world. Olson only raised $620, and Kickstarter’s rules state that you have to make your goal to keep any money raised. (Indiegogo lets you keep whatever you raise; other differences include campaign length, commission cut and general vibe.) Olson acknowledges that a short, hard-hitting video is key.
“One of the real issues for theater is that it’s almost impossible to do a video that really shows what you’re going to do,” Olson says. “Because if you already have sets, costumes and a cast, you’ve already spent the money.”
And not all projects have the same appeal. When film director Zach Braff raised $2 million on Kickstarter to fund “Wish You Were Here,” many criticized him for tapping into the indie funding piggybank. Other big names like Bell Media (makers of sitcom “Corner Gas”) have taken to crowd funding to finance promotions, rather than the product itself. The lure of being part of a big celebrity project can take potential donors away from more needy groups.
“If you have someone who just wants to invest $20, will they go for a tiny theater company or Zach Braff’s new film?” Olson asks. “The draw of celebrity is something we’re fighting against with crowd funding the arts.”
Olson hasn’t given up on crowd funding: With a small for-profit company that can’t apply for grants, it’s still easier than cold-calling sponsors. For New Muses’ September production in Tacoma’s Dukesbay Theater, he’s changed the program to Christopher Marlowe’s “Dr. Faustus,” and just launched a campaign on Tilt Open, an open-source platform that allows campaigners to create their own page and to set their own time limits.
What really appeals to Olson about open-source platforms is that they don’t take a cut out of fundraising dollars. The only thing a group pays on donations is credit card processing fees. On Kickstarter, by comparison, groups pay 5 percent of each donation plus a 5 percent processing fee; on Indiegogo, the cut is 9 percent. Even Power2Give, which has raised $400,000 in its first year, takes a 7 percent administrative cut, despite being sponsored by Boeing.
While bigger players like Kit Evans see the cut as a reasonable price to pay, it’s tough for small groups. There’s also the ethical question of whether, with almost no material overhead costs, an online platform devoted to helping others raise money should be taking a cut at all – especially since most of the donations come from direct-mail supporters rather than the platform itself.
That cut also raises the question of what will happen if online crowd funding – already drawing from corporate and foundation buckets – ever completely replaces traditional funding for the arts.
Amy McBride, arts administrator for the city of Tacoma, which funds individual artists and organizations with $395,000 per biennium, doesn’t think it will. As someone who’s been on both sides of the crowd-funding game – she co-raised $22,000 several years ago to create an artist-illustrated Tacoma deck of cards – McBride sees it as “just one part of the puzzle.”
“This is just a new way for people to access funds,” McBride says. “I think it’s terrific. We already look for organizations we fund to have diverse funding sources. It works in their favor to show they’re scrappy and can get money.”
Sarah Sidman, director of strategic initiatives at ArtsFund, agrees that crowd funding is a good complement to traditional funding.
“It’s both fundraising and storytelling, giving arts groups the ability to speak directly to donors about what they’re doing,” she says. “It’s quick, with immediate impact.”
The bottom line is that crowd funding works because online donors like tangible projects where they can see where their money is going. Those projects, however, don’t come anywhere near covering the nuts-and-bolts costs of arts organizations: the operating costs, the not-so-sexy aspects (music rental, administrator salaries). They also don’t encourage organizations to scrutinize and improve their business plans and finances the way bodies like ArtsFund do.
As crowd funding evolves, will the donor desire for cool projects gradually strip foundation and government budgets of traditional funding that, in Sidman’s words, “helps arts groups keep the doors open”? And as for-profit platforms get more popular, what’s stopping them from asking for a bigger cut?
On the other hand, crowd funding might become just one more annoying click request.
“The market is over-saturated with crowd funding campaigns,” says Olson, who saw a drop-off in New Muses Facebook clicks as he announced the Kickstarter campaign. “People say, ‘oh, that’s a great project, I’ll look that up when it happens.’ ”