The power of the crowd

Crowdfunding may not be a funding panacea, but itbrings many benefits
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Rebecca Atkinson
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In an age when museums are plagued with funding cuts and grappling with the opportunities presented by digital technology, it’s little wonder that crowdfunding has become such a hot issue.

Although it has been around since 2006, crowdfunding started to make serious waves in the museum sector a few years ago, and is today starting to form part of some organisations’ fundraising portfolios.

This popularity is set to grow. A 2014 report, published by Nesta, Arts Council England and the Arts and Humanities Research Council, predicted that crowdfunding would be a growth area for arts organisations, with 18% of those surveyed already using digital giving platforms and 21% planning to do so in 2015.

Wikipedia defines crowdfunding as “the practice of funding a project or venture by raising monetary contributions from a large number of people, typically via the internet”.

Unlike more traditional forms of fundraising, crowdfunding projects typically give something back to the donor. In some cases, this is equity in the venture but for museums a rewards-based model is the most common approach.

Giving something back in exchange for money is a relatively familiar concept to museums, many of which have wings or galleries named after generous philanthropists.

“Crowdfunding is just an electronic version of the way museums raised money in the 19th century,” says Rachel Cockett, the director of development at Birmingham Museums Trust.

A unique approach

The growing number of crowdfunding platforms is helping to drive the popularity of the practice, and has created an approach to raising money that claims to be uniquely different to other digital asks.

Last year, the Crowdfunding Centre published a report that claimed more than US$60,000 was raised every hour on global crowdfunding platforms during March, with 442 new campaigns launched every day throughout the month.

Kickstarter, which was launched in 2009, is probably one of the best-known crowdfunding websites. Other platforms include GoFundMe and Indiegogo.

“A lot of the time when we use the word crowdfunding, we’re referring to a specific platform rather than the technique itself,” says Cockett.

So how is crowdfunding different to other forms of fundraising?

“The rise of the experience economy means that consumers want more from their interactions with culture,” says Lisa Westcott Wilkins, the managing director of DigVentures, a crowdfunding platform for archaeology projects.

“Crowdfunding puts them inside projects as stakeholders as well as funders, and that’s what drives people to want to take part.”

Traditional giving is a one-way process, but digital technology provides the opportunity (and an expectation) of a two-way process. In the case of crowdfunding, donors want more than just a thank you and updates – they want an ongoing commitment or relationship with the organisation they have given to.

While this might seem like a big ask, it is actually an opportunity for museums to use crowdfunding to develop stronger relationships with audiences and build an army of advocates.

Challenges and benefits

As a relatively new phenomenon, digital fundraising can be a challenge for museums – especially smaller organisations that often lack the resources and in-house skills.

In Wales, Catalyst Cymru Heritage Fundraising has been sharing fundraising case studies, including crowdfunding projects.

“Organisations in Wales are poorly equipped for fundraising in general, but there are success stories from small players as well as larger ones,” says Richard Roberts, the project officer of Catalyst Cymru.

However, many of the better known crowdfunding case studies have been run by larger museums or had the backing of a well-known artist.

Aware of the buzz around crowdfunding, Arts and Business Northern Ireland commissioned a research project to try to gather evidence on how successful it could be and whether it could work with smaller organisations and their audiences in Northern Ireland.

Oonagh Murphy, who ran the project, says it was also about mentoring participants and giving them the skills to run crowdfunding campaigns – including a realistic understanding of what it can achieve, and what it can’t.

“One organisation did get disheartened because they were putting lots of work in and it wasn’t paying off,” she says. “But they’d had four radio interviews about their project, a PR opportunity that they wouldn’t have had otherwise.”

Murphy says that crowdfunding can also be good for organisational change: “It gives you a timeframe to develop and deliver a way of working with a community. And it’s an opportunity to test something – for example, rather than investing in launching a membership scheme why not see if it could work as a reward on the crowdfunding campaign? And if you don’t have a marketing budget, crowdfunding is a good way to get PR.”

Funding panacea?

Research into what motivates museum visitors to give, co-commissioned by the Art Fund and the National Museum Directors’ Council, found that 93% of visitors give money to charity but only 40% give to museums – largely due to a perception that museums are well funded and don’t need public money in the same way as charities such as Oxfam or Cancer Research.

The challenge the Art Fund identified was how to get people to give small amounts of money (less than £1,000) in a tangible way, other than through a membership scheme or a donation box.

The Art Fund thinks crowdfunding could be the answer, and in June last year it launched the UK’s first museum-specific platform, Art Happens.

Unlike the organisation’s previous digital fundraising campaigns, the projects on Art Happens are looking for much smaller amounts of money for specific projects, and donors receive a reward in exchange for their money.

Museums are invited to fundraise for projects on the site but they only receive the money if they hit target – if not, donors are given the option for a full refund or to transfer their money to another project.

So far, only one campaign, which was run by St Fagans: National History Museum Cardiff, has been unsuccessful. Another, the Towner in Eastbourne’s planned project with the artist Hans Schabus, was cancelled after the exhibition was no longer able to go ahead.

As of 27 February, Art Happens had received more than £100,000 in contributions, from more than 1,000 donations. The average donation to the site is £99.80, although the largest single amount has been £5,000.

Although the success of Art Happens suggests that there is mileage in crowdfunding for museums, Carolyn Young, the Art Fund’s director of marketing and membership, says it is not a panacea for organisations suffering from funding cuts.

“Crowdfunding has become a bit of a buzzword, and people with a hole in their budgets have been looking at it as a way to make up lost income,” she says. “But it isn’t easy – it takes a lot effort and organisations also need to change the way they talk about their work.”

For the museums that have taken part in Art Happens, crowdfunding has been used as a way to create direct dialogue with new and existing audiences.

“Crowdfunding needs to be considered as part of building an audience, rather than a funder of last resort,” Young says.

Roberts says that Catalyst Cymru Heritage Fundraising has been contacted by museums “in dire straits” that hope crowdfunding might be the answer to their monetary problems.

But he warns it’s not a silver bullet: “Crowdfunding is about having a specific cause – not about raising money to keep the doors open. It’s not a long-term solution to funding cuts.”

Westcott Wilkins agrees that crowdfunding is not just about raising money.

Through its crowdfunding work, the platform has created a community of givers who want a way to be involved in archaeology projects.

“We have turned down projects that don’t think about the community they are building through crowdfunding,” Westcott Wilkins says. “The most successful thing that has happened to us is our community is growing and we have a spectrum of engagement that allows them to stay with us and grow.

“Crowdfunding isn’t about giving to charity – we are giving value to our audiences and that’s why it works.”


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