Business

Making it more like fun-raising

Slava Rubin is co-founder of IndieGoGo.com. The idea behind the site was to democratize fund-raising, to take it out of the "few people in suits" who have traditionally decided what movie, music album or charity gets funded, he said.
Slava Rubin is co-founder of IndieGoGo.com. The idea behind the site was to democratize fund-raising, to take it out of the "few people in suits" who have traditionally decided what movie, music album or charity gets funded, he said. AP

NEW YORK — One project strapped dozens of digital cameras to kites and balloons and sent them above the Gulf of Mexico to document the oil spill. Another will, hopefully, fly a smart phone into the upper reaches of the atmosphere so it can send photos and video back down.

These projects cost a few hundred to tens of thousands of dollars. And to help pay for them, their creators are turning not to deep-pocketed investors but to friends and strangers online. Through Web sites including Kickstarter and IndieGoGo, these people pledge as little as $1 in exchange for "I knew them back then" bragging rights and thank-you gifts such as limited-run CDs and books.

"This is widening the scope of who is getting funded," said Tiffany Shlain, filmmaker and founder of the Webby Awards, for which IndieGoGo was nominated this year.

Many indie filmmakers and musicians turn to the sites because this way they can retain creative control over their projects.

Kickstarter, based in New York City, lets people set a budget and make a pitch, usually in a self-shot video. About 2,500 projects have been funded by about 200,000 people through Kickstarter since the site launched in April 2009. About the same number have failed to meet their funding goals.

Many backers, though not all, have some connection to the projects they are contributing to. They come from all kinds of backgrounds — professors, techies, students and filmmakers, dreamers and doers. Many first-timers find the sites through a project they are somehow connected to, and stay when they discover others they like.

Creators put a lot of work into displaying their projects on the sites to show, not just tell. There are photos, videos, blogs and links to Facebook and Twitter, along with detailed descriptions of the rewards offered to backers. Kickstarter's small staff, meanwhile, vets projects before they go up on the site. The sites also have various fraud-prevention measures in place.

Jeffrey Warren's oil-spill mapping project raised $8,285 from 145 people. Rewards include photos and their names written on the balloons and the kites sent above the gulf. Warren, a fellow at MIT's Center for Future Civic Media, said he didn't personally know most of the project's backers.

"Backers become advocates for your cause — they hit the blogs, newspapers, etc., and it's the wider network that seems to contribute most, not your immediate friends," he said. "Probably your immediate friends contribute more directly, for example with their time and support."

The Web sites make money by taking a small cut of the money raised. On Kickstarter, which takes 5 percent, only projects that meet their full budget get their money. If they don't, no money is exchanged. Backers pledge using Amazon's online payment service, and credit cards are charged only if the project meets its funding goal by a set deadline.

IndieGoGo, by contrast, lets projects keep the money even if they don't meet their full funding goal, though in that case it takes a larger cut.

The idea behind IndieGoGo was to democratize fund-raising, to take it out of the "few people in suits" who have traditionally decided what movie, music album or charity gets funded, said co-founder Slava Rubin.

On Kickstarter, the average contribution is $25. On IndieGoGo, it's $84. Some projects have received as much as $10,000 from a single backer, but those cases are rare. The highest-grossing project to date is Diaspora, an anti-Facebook of sorts that would let users keep control over their photos, videos and status updates while sharing them with friends.

The four New York University students behind it raised $200,641 on Kickstarter.

Though the sites are reminiscent of single-project online tip jars that popped up earlier in the decade, they work better because they create persistent communities behind the projects.

"Those were predicated on a passive involvement," said Yancey Strickler, Kickstarter's co-founder. "Kickstarter is much more structured and active. Projects are focused on specific things, they have finite deadlines, they establish relationships, and they clearly communicate what someone gets in exchange."

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