I’m a fairly generous person. I can be convinced to share with others, and most of the time I enjoy the sharing, even if it’s my chocolate. In the case of chocolate, I don’t really expect anything in return. I share my chocolate because I like you, or you are in need, or it simply makes me feel good to see you smile when you eat chocolate. When it comes to money, there have been times I’ve shared with others because they’ve needed something (perhaps they lack the wherewithal to purchase their own chocolate and I am currently out), or they are attempting a project I believe in. This crooked and rocky path brings me into the world of crowd funding.
Crowd funding a project is all the rage right now, and there are many great projects that happen because of it. And for those who would contribute to projects, there can be some really interesting (that is, cool) perks and rewards for making a contribution. I’ve contributed to no less than 5 projects that I wanted to see completed.
Consider this professional model: A producer wants to make a certain movie. They’ve already chosen the story, etc. so all that needs to happen is for it to be made. They have some money they’re willing to invest, with the expectation of making a profit once the film goes into distribution. They get a couple of name actors involved who think the script has some potential. The actors know they will be paid, as does the rest of the cast and crew. The producer counts up how much it will take to get the picture completed, for example 30 million dollars. The producer doesn’t have that much money to invest, so he goes to some friends and they give the remaining amount, say 20 million dollars. The film is now two-thirds owned by these other investors. Two thirds of all profits go to them.
Grants are a slightly different matter, but not by much. When a grant source gives you a grant to fund your creativity, they still expect something in return, even though it’s generally not a physical reward. They expect some kind of proof that you completed the project, at the least, and they have a right to expect that. Otherwise, they could just hand out money on the street. When you collect a grant to fund an exhibition, the funding agency would like to know that the exhibition happened, and that you didn’t take their money and fly to the Maldives instead.
Crowd funding. You want to make a small picture with some friends, and you need to rent some equipment to shoot it a specific way. So you go to a funding site and set up an account. You know it will cost you, say, 10,000 dollars to do what you are trying to do, so you set up various levels of giving, ranging from 10 dollars to a thousand dollars. Now, in this micro-miniscule budget world you can’t afford to “sell” a percentage of your project to a person giving you 20 bucks (the film may never make any profit anyway, especially if it’s intended to get into festivals), so you instead promise them a copy of the completed film on DVD. All parties are happy. You get enough money to finance your picture, and those slipping you an Andrew Jackson will get a DVD of the film they helped to finance.
The reality is that, seemingly, many crowd funded creative projects (completion is assumed) never pay their investors. Maybe I’ve just chosen badly in my crowd funding choices, but out of the projects I’ve put money into, only once did I get something resembling my promised reward, and that took some effort on my part. [Here’s the story on that: I had seen a well known photographer teach a workshop and was impressed with her Photoshop skill, so when she spoke passionately about a project she developed aimed at helping abused women learn photography, I was interested enough to look into the project. I saw that for the cost of purchasing one of her lessons on DVD I could get a lesson on DVD and help with funding of the project, so I stepped in at that level. The promised DVD never arrived by the expected date, and after a couple more months had passed I sent an e-mail of the “just wondering. . .” kind. A week or so later, I got an email response with a link to a YouTube video. Yes, a YouTube video of the promised lesson.]
I realize it’s very easy to get on to other projects. As creatives, we feel the need to keep working, keep making stuff. None of us likes to spend a lot of time with anything other than our creative part; we don’t want to bother with the “bookkeeping” aspect of creative production.
The tough–but important–thing to realize is that your project isn’t really finished until your investors have been satisfied (i.e. the perks have been handed out).