New-York based crowdfunding platform Kickstarter reached an important milestone recently – it now attracts $1m a week in pledges. Crowdfunding platforms emerged in the US a couple of years ago, with sites such as Kickstarter having launched in 2009 and Indigogo in 2008, but over the past year it has hit Europe in a big way, and a number of crowdfunding platforms have emerged, with a creative and arts focus.

Essentially, the concept is simple and most of the crowdfunding platforms work in the same way, allowing people to raise cash for a project, creative or otherwise, using an online fundraising platform. A project is created, a funding target is set and a campaign length is established, then the artist or creative sets about actively marketing and promoting the project to reach the funding goal. But rather than asking for large amounts of money from a small number of people in the traditional patron model, small sums are collected from a large pool of people. They’re encouraged to back projects through a system of rewards, vouchers, perks and incentives, which are offered by 
the creator on a sliding scale depending on the amount that 
is pledged. They can be anything from a thank you on a website or 
an invitation to a private view, to 
a signed limited-edition print.

The ethos

Sponsume, which was one of the first websites to go online in the UK last August, caters for creative and entrepreneurial projects: Wefund considers all creative projects and Wedidthis, which launched early this year, focuses solely on the arts. “We really accept all kinds of creative projects and try to be as inclusive as possible,” says Sponsume founder Gregory Vincent. “That’s kind of the idea of crowdfunding – helping to support projects that are slightly out of the mainstream opinion to find a niche that may be able to support them. It’s very important to the arts.”

Projects are “lightly vetted” once they have been submitted to make sure they are sound, but, “The real vetting is done by the public, which I’ve found to be very efficient,” says Vincent. The new site only recently launched for real after a beta test phase, so statistics about it are likely to quickly date. Even so, Sponsume has 15 projects currently online with a number ready to go live, and of about 20 submissions a week, around four to five are currently being launched per week. The types of creative projects typically launched have ranged from documentary and quirky short films to music projects, theatre and technology/design projects.

Recently, London-based photographer Clare Newton launched a project to produce what she hopes will be the world’s largest photograph, which will be “two and a half metres high on a continuous roll” and “a blended montage shot on digital – a bit like a panorama on a mega scale”. She has a total target of £70,000, of which she hopes to raise £1000 via Sponsume to fund one element of the project. “I didn’t know about crowdfunding until I was referred to Sponsume and, when I saw it, I thought that it was a cracking idea,” she says. “The site is easy to use and I like the feel. I can upload photos, PDFs and Youtube videos to promote my campaign and deliver the project from my point of view,” she says. Although Newton has a template website for her project, www.jump4london.co.uk, it is limited as there is no online payment system.

Payment systems

Some crowdfunding platforms, such as the US-based Kickstarter, require project creators to use payment systems such as the Amazon Flexible Payment device, which is only open to those with American bank accounts. Others may be restricted to those with bank accounts in the UK and Ireland. People have got round this by finding friends willing to create a US bank account to support their system though, and the word on the grapevine is that Kickstarter will be targeting Europe soon. For Sponsume and Wefund, Paypal provides a reliable, easy-to-use online system for the secure money transactions, and it accepts most major currencies. But there is a cost as Paypal collects a fee, starting at between three and four percent, depending on the volume of the transactions, which is collected from the total amount once it is raised. The crowdfunding sites also sometimes take an additional or transaction fee, which varies between them all. Sponsume has no charge at the moment, but there are “plans to charge a small fee out of a successfully funded project, to keep the website going and growing”.

Wefund, which launched in October last year as “the first crowd-funding platform to focus on creativity”, uses Paypal and Voicepay for payment, and operates an all-or-nothing policy on reaching the funding goal. If a project doesn’t meet its target, the project leader doesn’t get the money. Currently Wefund is waiving its fee, though it will charge five percent “in the foreseeable future”, if the target is reached. Otherwise all pledges, which range from £1-£2000, are cancelled. Sponsume, on the other hand, has just introduced a 50 percent rule whereby, as long as you raise 50 percent or more of your target, you get the money you have collected. “Having listened to users, we feel that an all-or-nothing policy is too harsh for creators, as a project that has raised most of what it needs can still end up with nothing at all in the end,” explains Vincent.

There are currently 36 projects online and another 70 in development, with Wefund launching projects as soon as they are ready, “about three to five a week” from the three proposals received every day, says Wefund founder, Michael Troughton. The site is a showcase for arts projects and “is a chance to build and connect with your audience”, as well as “to prove that there is an audience”. Projects range from exhibitions to performances, although there are no photography projects currently up on the site. The submission process is straightforward. “You fill out a short proposal form on the site,” says Troughton. “I look at it and, as long as it’s creative and not illegal, essentially, it gets approved… Once a project is up on the site, we do 
our best to drive traffic to it and 
to put your project next to lots of other projects, offering a bit of cross-pollination.”

Wedidthis launched in January “to bring the power and rewards of arts funding to anyone in the UK” and is currently launching one project per week. It offers “personalised rewards for each donation” using the Culturelabel payments provider Moneybookers, which has a fee scale. The site also takes a fee and, as far as reaching the funding goal, it operates an all-or-nothing policy. A current project – Generator – hopes to raise £9000 “to award three bursaries to UK visual artists, allowing them time and money to each produce a new body of artistic work, which will be exhibited in a central London gallery later in 2011”. Rewards such as a studio visit are offered for contributing to this project, and the more you donate, the more you get. On another site, Crowdfunder, which is aimed at “creative projects and inspirational ideas”, a Manchester-based photographer recently raised £305 from 16 funders, thus exceeding the £250 target that he needed to put on a solo show in Manchester.

DIY approach

But not everyone who uses crowdfunding opts to use these sites to generate funds. In 2009 photographer Rob Hornstra and writer/filmmaker Arnold van Bruggen set up The Sochi Project and, having looked at the funding options available in Europe at the time, decided to go it alone. A blend of documentary photography, film and reportage focused on Sochi, where the 2014 Olympics will be held in Russia, they felt newspapers were unlikely to help and other approaches were too involved. Instead they’ve raised funds online using a tiered Bronze, Silver and Gold donation scheme, giving different rewards for different levels of financial support. Payment options including a Dutch bank account, Paypal and bank transfers.

“We are happy that we created our own platform because our project is too big for sites like Kickstarter,” says Hornstra. “These platforms are very good for many people, but not for us. We’ve created a long-term project and have tried to find a community of supporters that would support us for five years. If we used another platform, we could only apply for one trip, or part of the entire project.”

The total target is €150,000 over five years, with an aim to collect €30,000 a year, which, says Hornstra, is still not enough to cover all the costs. The Sochi Project has so far collected over €20,000 per year with three years to go.

UK photographer Andy Sewell has also had success with the DIY approach, raising £6000 to print his first book and pre-selling 65 of 100 limited-edition versions of it.

Time and money

With crowdfunding there is a notable correlation between the size of the project leader’s online social network and the amount of money raised – the bigger the network, the greater the chance of reaching the target. When it comes to the optimal time span for a campaign, most sites recommend a 90-day limit to keep the campaign active, though this does depend on the type of project. The differences in the crowdfunding sites currently springing up arise primarily in terms of the territories in which the platforms operate, the kinds of projects and niches that are targeted, payment services used, percentage fees levied on transactions and policies on reaching funding goals.

It’s early days for crowdfunding in the UK but, despite a lack of awareness of the concept, project leaders are still raising amounts that are making a difference.

As Vincent sums up, “The filmmaking community is very aware of crowdfunding – what it is and how it works. They know it’s trustworthy and it delivers. However, outside this community people still need to be educated and made aware of the concept of crowdfunding. Most artists are still unaware of what it is and what it can do for them.”