05 Crowdfunding
As capital funding continues to decline and increasingly local councils need to make cuts it is often cultural organisations that find themselves funding their activities and development in new ways.
Crowdfunding is fundraising for the social media age – online campaigns seeking small contributions from the public at large. There are three main types of crowdfunding – equity crowdfunding offers donors a return on investment; rewards crowdfunding offers donors non-financial incentives; while Donation crowdfunding offers nothing in return. Most arts projects use the rewards crowdfunding model.
Fund seekers choose an online crowdfunding platform – popular sites for arts organisations include Kickstarter, IndieGoGo, Sponsume and PeopleFund.it. Create a fundraising page for your project, write (or film) your pitch, and set a target amount to raise and a deadline by which you’ll raise it. List a range of incentives or rewards to offer in return for different donation figures. These could include, for example, credits in your brochure, tickets to screenings, invitations to special events, or “limited edition vintage merchandise” (aka those old festival t-shirts you’ve got sitting in the cupboard). Then start promoting your campaign. There is a useful crowdfunder’s checklist from Elliot Grove, founder of Raindance, on their website here.
Some models, such as Kickstarter, operate on an “all or nothing” basis, meaning that if you don’t reach your target figure by your deadline, the pledges are returned and you don’t get any of the money. This can be useful for testing out interest in a potential product or event before committing to invest in it. Other platforms allow you to keep any funding you raise within the time period. The crowd-funding platform you use takes a 5 – 10% cut of the money raised by any successful project.
All these methods have been used by many a successful cinema campaign. While you should not expect to raise hundreds of thousands in this way, it is not unrealistic to aim for several tens of thousands. Incidental benefits of raising money in this way are that (a) it creates profile locally among audiences for your venture and (b) it demonstrates to other funders that the project is genuinely wanted by the community it serves.
Engaging and including audiences in your fundraising activities can be hugely beneficial to your campaigns. Good communication is an important element to successful fundraising – explain and communicate well internally and externally and ensure all funders and potential funders understand the benefits and reasons for your fundraising campaign.
The Light House Cinema in Wolverhampton launched a fundraising campaign in 2012 to raise £75,000 towards upgrading both of its cinema screens with digital projection. The campaign was run through Angelshares, an online crowdfunding platform which sells ‘shares’ then donates them back to arts projects in return for rewards from the organisation. The rewards offered by the Light House Cinema included complimentary tickets, offers in the cafe bar and loyalty cards offering discounts for cinema goers for 6 and 12 months – donors could claim their rewards once the target had been reached. £1 = 1 Angelshare. Angelshare closed in 2013 so it is worth remembering that this is a relatively recent form of funding and do your homework to ensure as best you can that the platform you decide to use is reputable and safe.
A crowd funding campaign run on KissKissBankBank to raise funds to develop an intimate two screen, with a flexible third, cinema in Berlin with 100 seats called Wolf Kino saw it reach and surpass its initial target of 50,000 euros in only 60 days. Verena Stackelberg, founder of Wolf Kino explains the funding plan for the redevelopment “…when I got some business advisors onto the project it quickly became clear that it’s never going to be able to finance itself if it’s this small. So I began planning it bigger, then found this amazing venue, an investor and it all started.” Verena ran a series of events to promote the crowd funding campaign and continues to promote a range of offers to raise more funds to complete the redevelopment with second and third steps of £70,000 and £100,000 such as membership of a year, private hire of the cinema, plaques in the cinema, hoodies, limited edition DVDs and art work, names on their website or a screening of a short film or advert of your choice.