But as sites like IndieGoGo, Sponsume, and Slice the Pie help artists and entrepreneurs raise millions of dollars, are these platforms enabling people who otherwise don’t have what it takes to make it in their fields? Folks who have benefited from crowdfunding don’t think so.
Somi, a chart-topping Afro-soul jazz singer who has released three critically-acclaimed albums says, if anything these platforms “[force] you to be clear about your project, your motivation, and what you really need to make the project happen.”
Additionally, each platform has strict rules for fundraising, setting up significant barriers to entry. Kickstarter, for example, only charges backers’ credit cards when the project’s full fundraising goal is met—which sadly does not always occur. According to Kickstarter, since the site went live in August 2009, about 45% of pitched projects—approximately 9,500 campaigns—have been successful.
IndieGoGo, which launched in 2008, allows “anybody to raise more money from more people,” says Director of Marketing Erica Labovitz—but she points out that a tight pitch increases a campaigner’s chances of success. “We know that campaigns that have videos raise over 100% more money than campaigns that don’t.” Plus, campaigners are required to pay 9% of what they raise if they don’t reach their goal, versus 4% if they do. “We want people to really think through how much money they need and not just say ‘Well, $50,000 would be nice.’”
These challenges are worth the rewards, as artists and entrepreneurs are not the only ones benefiting from crowdsourced funds. On IndieGoGo, people are using the platform to raise money for needs as varied and costly as in vitro fertilization, chemotherapy, stem cell treatment — even tracking down long lost parents. At press time, the mother of an eight month old baby suffering from Bilateral Retino Blastoma has raised over $5,000 through the site for treatment.