How does crowdfunding work? What are the advantages of crowdfunding a project?
We asked Hen Norton from wedidthis.org.uk to write a guest blog on why artists, individuals and groups should consider Crowdfunding…Check out her guest post below and hopefully she goes a little way to explaining how does crowdfunding work – something even a few months previous I knew very little about.
WeDidThis was co founded by myself and Edward Whiting in January 2011. We have just celebrated our first birthday and are excited about embarking on year 2! WeDidThis was set up to provide an alternative way for creative projects to raise funds and make their ideas happen.
How did it all came about?
Initially the idea was born out of Ed’s desire to fund the arts and become more involved in projects he was excited by, he recognized a desire in himself to give something to the arts at a time of funding cuts but also didn’t want to align himself as a friend of solely one organization. He also knew that there was a limit to the amount he had available to give and thus came up with the idea to provide a place for individuals to give small amounts in return for rewards, often experiential and build a sense of responsibility in people to invest in the arts. I had been working as a creative producer in the arts for a few years and met Ed in September 2010, between us we developed the platform and launched the site in 2011.
What are the advantages of crowdfunding for artists? There are multiple benefits to crowdfunding: Its primary advantage is to provide an alternative source of funding. By asking ones networks and audiences for individual small donations these are then aggregated to make up a larger amount. These funds can then be used to get projects off the ground or as leverage to raise further funds as part of a larger funding strategy depending on the size and stage of the project and organsisation fundraising.
Another exciting benefit of crowdfunding is the opportunity to build deeper relationships with your audience, by offering them rewards in return for their small donations, artists are able to develop their interaction with their ‘fans’. These donations also provide evidence of ‘want’ and ‘need’ for the work they are making which can be useful when pitching to other partners.
Crowdfunding provides artists and project leaders with a campaign via which to target specific audience groups and potential new networks: ie a project for young people or a local festival might attract very different audiences to a project about the environment.
The campaign itself further provides an effective marketing tool in advance of making and has been known to result in gifts in kind as well as financial donations. One of our successes this year run by Nick Hunt resulted not only in him exceeding his target but also in receiving offers of bed and board across Europe as he journeyed across the continent as part of his work.
How & why are projects successful?
WeDidThis has seen an average of 40% success rates across the site over the past year and we have seen over 40 projects successfully funded. Projects that succeed are passionate about their work and recognize their need to invest time and energy in their month long campaigns, but the benefits far outweigh the hard work once their target is reached. Furthermore it is not unusual to exceed the target as Lido Love, Catalayst Rwanda and the Ministry of Stories have proven.
In order to run a successful campaign, it is important to recognize it as part of your longer-term plans for your project and the benefits beyond the financial gain. Crowdfunding is an opportunity to reach out to existing networks who may not already fund you and build strong and sustainable relationships with them, by opening up and exposing the process of making work and what goes into this. Rewards that enable outsiders to feel part of this process of making, ie: attending a play reading or, visiting an artists studio, not only excites funders but exposes why art costs money to make. It is important for artists to recognize the value of their work, not just in its final form but the products and experiences available to them to share with their funders.
We believe strongly in the role of relationships and growing networks and know in order to do this people must be given the opportunity to talk to one another and meet with one another. It was this philosophy that led us to develop our monthly collective packages where we focus on certain areas such as Derby or Brighton and work with a set of projects and organizations for a month so that they can share their networks and work together to run their campaigns, with our help.
We run workshops with collectives of organsiations and individuals to help them plan and develop their campaigns together. We then hold an Arts Club during the campaign with the months collective and invite both the projects and their funders to join us for an evening of art and crowdfunding in action. These have been very successful and often helps get at least one project over the line each month.
So how does crowdfunding work? Hopefully this article went a little way to explaining.
Blog by Hen Norton (February 2012)