Crowdfunding means funding by the public, the 'crowd'. Because of the direct communication with investors and backers it is not just about money, it is community building as well. In the art and culture sector crowdfunding is usually about making projects possible by donating money or advance sales. There are also platforms that allow artists to ask for monthly payments.
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What is crowdfunding
You or an intermediary recruit fans who all donate a small amount. Within a few weeks, a sum can be raised that can vary from a few hundred to tens of thousands of euros. In exchange for their donation, the backers receive a reward in kind. When it is a music project you can give tickets to a concert, for a film project you can give a link to watch the film online for example. Backers should always be updated on the project.
Crowdfunding is no substitute for subsidies, but it can be a useful resource in addition to an application for subsidy. You can decide to resort to crowdfunding as the last step in obtaining your budget, because that is when the chance of actually getting the project implemented is highest. That makes it more interesting for the backers to make a donation. But you can also start with crowdfunding and if it is successful, use this information if you want to apply for subsidy.
Crowdfunding also provides information about the extent of the support for the project. You will also be challenged to think hard about your concept and how you present it. How do you pitch your ideas to make people want to give money to them? You can gauge how much enthusiasm there is on the basis of the reactions. Your crowdfunding campaign should be a part of your marketing plan.
How does it work?
As the initiator of your project, you announce it on a crowdfunding platform or set up a website yourself. Platforms all work in more or less the same way but they do not offer the same service and support. Every platform has its own focus: local or global, all or just one art form, projects, individual artists or startups.
You have to spend time on involving backers with your project: friends, relatives and fans. If backers can feel more involved, they spread the information and the fundraising can proceed very quickly. Donors will be involved in different ways: one gives without wanting to know a lot about the project, whereas others ask questions all the time.
Practical aspects for recipient and backer
Anybody can start a crowdfunding campaign, you do not have to have a foundation for example. If you use a platform you pay a percentage of the sum donated for the services of the platform. If your project does not reach its funding goal, backers will not be charged or get their money back.
Crowdfunding platforms such as Voordekunst have the status of Institution Aimed at the Common Good (ANBI). That makes it more attractive for donors to donate. Their donations might be tax deductible. For more information about the conditions for deducting donations from tax, go to the Tax Office website.