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Add it up: Crowd-fundraising can mean big bucks

- Associated Press - Sunday, September 19, 2010

NEW YORK (AP) - 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. Then there's the young woman from California who's set sail around the world, without the backing of corporate sponsors.

These projects cost anywhere from 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 websites 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. Others, such as 24-year-old Emily Richmond, are using them to help realize childhood dreams.

"To be a long-distance sailor in this day and age you either have to go the route of trying to break a record, in pursuit of attracting major corporate sponsorship, or you have to save your whole life, finance your own trip but not get to do it (until) you're up there in years," Richmond said by e-mail recently while sailing off the coast of Acapulco, Mexico.

So, she turned to Kickstarter. Last year she raised $8,141.80 to get her two-year voyage started. Expenses included buying food and outfitting her vessel for long-distance sailing. In a second round of fundraising this spring, she got $7,251 for safety equipment such as a GPS tracker, a satellite phone and a medical kit. She calls the site a "real live dream-machine."

Kickstarter, based in New York City, lets people set a budget and make a pitch, usually in a self-shot video. 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. In addition, a project's initial backers tend to be people who are somehow connected to it, effectively vouching for their authenticity. IndieGoGo co-founder Slava Rubin said strangers don't tend to fund projects that haven't already raised money. 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 your name 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 websites 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 fundraising, to take it out of the "few people in suits" who have traditionally decided what movie, music album or charity gets funded, Rubin said. The San Francisco-based site's three founders all had background in fundraising; Rubin, whose father died of cancer when he was a child, had started a cancer charity.

The ease with which projects can be shared via Facebook and other channels, along with the comfort many Internet users now have with online transactions, means the time is ripe for crowd-funding. Getting the word out about the projects even a few years ago _ before Facebook opened up to the public and before YouTube made it easy for anyone to upload a video online _ would have been difficult, if not impossible.

It's not just altruism that gets people pledging. Perry Chen, Kickstarter's 34-year-old co-founder, said projects offer "bragging rights of being involved early," especially if the band, film or comic book later becomes successful.

There are tangible benefits, too. Richmond, the sailor, is mailing anyone who pledged at least $15 a Polaroid photo from her travels. For those who gave $75, she is sending a coconut.

"When I saw Emily's project I couldn't even imagine what it would be like to be on your own on the water like that for such a long time," said Mike Ambs, a Los Angeles filmmaker who's backed Richmond's project along with 18 others. He said he is looking forward to getting a photo from Richmond's adventures. But the feeling of playing a part in something ambitious is also a source of inspiration.

"It's exciting to be a part of it and see how far a little bit can go," he said.

He's also used Kickstarter to help fund "For Thousands of Miles," his planned documentary about a man riding a bicycle across the United States.

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."

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.

Danny Pier's "Astdroid" was among the ones that reached their goals. The 25-year-old software engineer said he is disappointed with the looming end of NASA's space shuttle program and wanted to do something about it.

"I was thinking what could I do to make space more accessible for the everyday Joe?" he said.

The answer: Send a Droid smart phone to the stratosphere, using a weather balloon. Running an application built by Pier, the phone, if it makes it, will send photos and video back to Earth through a website. (Other amateurs have strapped digital cameras to weather balloons for high-altitude shots).

Pier, who lives in Denver, estimated that his project would cost $1,800, enough for a few phones in case the Astdroid doesn't take off on the first try. He raised $2,050 on Kickstarter, from 66 people.

"I wouldn't have been able to raise the money without it," he said. "As it is my friends think I'm crazy, I wouldn't be able to get any money out of them."

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Online:

http://www.indiegogo.com

http://www.kickstarter.com

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