Museum 2.0: Kickstarter: Funding Creativity in a New (Old) Way

Monday, July 12, 2010

Kickstarter: Funding Creativity in a New (Old) Way

Let's say you want to make a documentary about the World Cup. Or sail around the world. Or produce an art exhibit with elementary school students. Or build an open-source PCR machine for copying DNA. How would you fund it?

Kickstarter is a website for creative folks to find funding for their dream projects. The site doesn't link them with foundations or grant applications; instead, it makes it easy to reach out to regular people for donations of as little as $1. Currently, the site supports US-based projects only. A Kickstarter project has three parts:

Project description. This is typically a video plus text, although some projects just use a simple image instead of a video. Project creators can also write updates (a kind of project-specific blog) to share either privately with backers or openly with all.
Funding goal. Kickstarter is an "all or nothing" funding scheme. If you make or exceed your goal in the timeframe you set, you get the money. If not, the backers' credit cards are not charged. Kickstarter makes money by taking a percentage on projects that succeed.
Pledge levels. While backers can fund you at whatever level between $1 and $10,000 they desire, most Kickstarter projects offer rewards at discrete pledge levels to motivate people to give specific amounts.

For the most part, Kickstarter projects are managed by young, creative individuals with small projects (and smallish funding goals) in mind. When I first started exploring the site, I assumed it was mostly a place for charismatic hipsters and a few star artists with enough social media savvy and clever video production capabilities to produce enticing pitches. But then I started finding more humble projects related to broader issues, and I began to see Kickstarter as a potentially fascinating space for museums and cultural institutions.

Why should cultural and arts organizations care about Kickstarter?

Kickstarter is a symptom of changes in donor culture. They are tapping into a large audience of people who don't care whether their donations are tax-deductible or not. Kickstarter backers aren't investing in companies or projects. They are making donations--in most cases, to entities that are not non-profits. These backers are excited by specific, near-term projects and want to support them directly. These are people who like to have a personal connection to a specific project and may be less interested in museum-style donor levels that are more about general (and vague) support for the institution.
Kickstarter backers are mostly young adults with money who are broadly interested in supporting the arts and creative practice. While arts professionals moan about the erosion of support and the disinterest of younger potential donors, Kickstarter is a fertile ground for research into the kinds of projects, presentation styles, and pledge gifts that appeal to this much-desired demographic. (For example, check out the charming way this comic book artist personalizes his relationship with potential backers in this video, minute 2.)
Kickstarter may be a good place to fund small experiments or to jump start campaigns. The all-or-nothing funding approach makes many project creators conservative about their ambitions. A documentary film crew might use Kickstarter to pay for travel costs, or a dance troupe to pay for recorded music so they don't have to hire musicians for their live performances. While Kickstarter is not likely to be the best solution for a huge fundraising project, it could be the perfect way to fund a discrete part of a capital project with high public appeal or a small wacky experiment that doesn't fit into the budget.

Success on Kickstarter: A Tale of Two Projects

To illustrate some of the key elements of a successful project on Kickstarter, I want to compare two projects that look very different on the surface: Jim Babb's Socks Inc. game and the Neversink Valley Museum's capital campaign launch materials. Please take a look at their pages and then come back.

In their presentation, these projects appear completely different. Jim's is a fun game involving sock puppets. He has a very catchy video pitch and pledge gifts that include things like a "sock clone" of you ($200, three backers so far). The museum's page is much simpler. There's no video, just a picture of the planned new community cultural center. The pledge levels include membership to the museum and traditional donor gifts--books, tickets to a party, naming opportunities.

At first glance, I assumed that a project had to be hip like Jim's to succeed on Kickstarter. But both these projects made their funding goals ($11,000 for the museum, $6,000 for the socks), and in the case of the museum, director Seth Goldman told me they raised an additional $7,000 for their campaign from less web-savvy people who preferred to write checks instead of donating online through the Kickstarter site.

So what do these projects have in common?

They picked sensible funding goals. Seth needed $25,000 for the capital campaign materials, but he felt that $10,000 was more reasonable in terms of what he could drum up online. After researching the fees and determining the true costs of all the gifts, he set the amount at $11,000 so they could net $10,000 for the campaign. Similarly, Jim focused on what he actually needed (and it looks like he will far exceed his goal in the time allotted). Not all projects are successful--I recommend this blog post for a sobering look at what happens when a project doesn't quite make it.
They developed pledge levels that were scalable and supported the project appropriately. Some projects on Kickstarter offer such fabulous thank you gifts that it's unclear how the creator will actually recoup any money for the project. Jim and Seth were very smart with their gifts and pledge levels. Jim noted to me that $25 is "the sweet spot" for donations, so that's the level at which he offered his first physical item (a patch featuring one of the socks from the game). Seth made the same decision--at $25 you get a book as well as a museum membership. Both of these projects offer gifts at levels below $25, but they're "free" for the project (membership in the museum's case, digital thank you's and behind the scenes blog access for the socks). Jim also told me that "the most important gifts to think about are between $25 to $250, since people donating amounts higher than that are contributing because they really want to support the project." In the museum's case, Seth capitalized on this by inviting funders at the $200 to a party hosted by a board member on the capital committee. As Seth noted, "we reversed the party concept. Instead of saying there's an admission fee for the fundraising party, we'll make it if you give $200 on Kickstarter the reward will be an invite to the party."
They were willing to aggressively "beat the drums" to promote their projects. Both Jim and Seth made it clear that you have to do the work marketing your project to be successful. For Seth, that meant emails and frequent Facebook updates out to museum members, whereas for Jim it involved a Twitter campaign and some guerrilla marketing to players of his past games. Jim noted that only 20% of his backers were people outside of his professional and personal networks, so it's essential to focus on people you know and not on "going viral." Jim told me "people are much more likely to check out a project and donate to it if a personal friend encourages them to pledge, so start there and encourage people to share in their communities." In Seth's case, this paid real dividends as the adult children of some museum members began donating and spreading the word. In one case, a man in Texas donated $1,000 to the campaign. Seth contacted him to thank him and express his incredulity that a stranger from far away would make such a gift, but then the man explained that his mother was a museum member and that she loved the museum and he wanted to do this as a gift for her. She had forwarded the link from the museum newsletter to her son, and he had taken it from there.
People who pledge have the opportunity for ongoing engagement with the project. The thank you gifts are invitations for deeper involvement over time. For Jim and the sock puppets, backers have the opportunity to test the game and eventually develop new levels and missions for other players. At the Neversink Valley Museum, every backer at the $15 level or higher received a museum membership. As Seth commented, "I can give you a better answer next year for how fabulous this is. A lot of people who wanted to come to the party got all the benefits below $200… so now they’re all members of the museum. So we’ll see how connected they are to the institution, will they renew their memberships, and will they donate above basic membership when it comes time to renew." The hope is that Kickstarter is the beginning not just of a project but of new relationships that can support the organization over time.

Could you imagine using Kickstarter at your institution? What do you see on the site that helps you think about how your organization raises money or communicates with audiences?

Project description. This is typically a video plus text, although some projects just use a simple image instead of a video. Project creators can also write updates (a kind of project-specific blog) to share either privately with backers or openly with all.
Funding goal. Kickstarter is an "all or nothing" funding scheme. If you make or exceed your goal in the timeframe you set, you get the money. If not, the backers' credit cards are not charged. Kickstarter makes money by taking a percentage on projects that succeed.
Pledge levels. While backers can fund you at whatever level between $1 and $10,000 they desire, most Kickstarter projects offer rewards at discrete pledge levels to motivate people to give specific amounts.

Why should cultural and arts organizations care about Kickstarter?

Kickstarter is a symptom of changes in donor culture. They are tapping into a large audience of people who don't care whether their donations are tax-deductible or not. Kickstarter backers aren't investing in companies or projects. They are making donations--in most cases, to entities that are not non-profits. These backers are excited by specific, near-term projects and want to support them directly. These are people who like to have a personal connection to a specific project and may be less interested in museum-style donor levels that are more about general (and vague) support for the institution.
Kickstarter backers are mostly young adults with money who are broadly interested in supporting the arts and creative practice. While arts professionals moan about the erosion of support and the disinterest of younger potential donors, Kickstarter is a fertile ground for research into the kinds of projects, presentation styles, and pledge gifts that appeal to this much-desired demographic. (For example, check out the charming way this comic book artist personalizes his relationship with potential backers in this video, minute 2.)
Kickstarter may be a good place to fund small experiments or to jump start campaigns. The all-or-nothing funding approach makes many project creators conservative about their ambitions. A documentary film crew might use Kickstarter to pay for travel costs, or a dance troupe to pay for recorded music so they don't have to hire musicians for their live performances. While Kickstarter is not likely to be the best solution for a huge fundraising project, it could be the perfect way to fund a discrete part of a capital project with high public appeal or a small wacky experiment that doesn't fit into the budget.

Success on Kickstarter: A Tale of Two Projects

So what do these projects have in common?

They picked sensible funding goals. Seth needed $25,000 for the capital campaign materials, but he felt that $10,000 was more reasonable in terms of what he could drum up online. After researching the fees and determining the true costs of all the gifts, he set the amount at $11,000 so they could net $10,000 for the campaign. Similarly, Jim focused on what he actually needed (and it looks like he will far exceed his goal in the time allotted). Not all projects are successful--I recommend this blog post for a sobering look at what happens when a project doesn't quite make it.
They developed pledge levels that were scalable and supported the project appropriately. Some projects on Kickstarter offer such fabulous thank you gifts that it's unclear how the creator will actually recoup any money for the project. Jim and Seth were very smart with their gifts and pledge levels. Jim noted to me that $25 is "the sweet spot" for donations, so that's the level at which he offered his first physical item (a patch featuring one of the socks from the game). Seth made the same decision--at $25 you get a book as well as a museum membership. Both of these projects offer gifts at levels below $25, but they're "free" for the project (membership in the museum's case, digital thank you's and behind the scenes blog access for the socks). Jim also told me that "the most important gifts to think about are between $25 to $250, since people donating amounts higher than that are contributing because they really want to support the project." In the museum's case, Seth capitalized on this by inviting funders at the $200 to a party hosted by a board member on the capital committee. As Seth noted, "we reversed the party concept. Instead of saying there's an admission fee for the fundraising party, we'll make it if you give $200 on Kickstarter the reward will be an invite to the party."
They were willing to aggressively "beat the drums" to promote their projects. Both Jim and Seth made it clear that you have to do the work marketing your project to be successful. For Seth, that meant emails and frequent Facebook updates out to museum members, whereas for Jim it involved a Twitter campaign and some guerrilla marketing to players of his past games. Jim noted that only 20% of his backers were people outside of his professional and personal networks, so it's essential to focus on people you know and not on "going viral." Jim told me "people are much more likely to check out a project and donate to it if a personal friend encourages them to pledge, so start there and encourage people to share in their communities." In Seth's case, this paid real dividends as the adult children of some museum members began donating and spreading the word. In one case, a man in Texas donated $1,000 to the campaign. Seth contacted him to thank him and express his incredulity that a stranger from far away would make such a gift, but then the man explained that his mother was a museum member and that she loved the museum and he wanted to do this as a gift for her. She had forwarded the link from the museum newsletter to her son, and he had taken it from there.
People who pledge have the opportunity for ongoing engagement with the project. The thank you gifts are invitations for deeper involvement over time. For Jim and the sock puppets, backers have the opportunity to test the game and eventually develop new levels and missions for other players. At the Neversink Valley Museum, every backer at the $15 level or higher received a museum membership. As Seth commented, "I can give you a better answer next year for how fabulous this is. A lot of people who wanted to come to the party got all the benefits below $200… so now they’re all members of the museum. So we’ll see how connected they are to the institution, will they renew their memberships, and will they donate above basic membership when it comes time to renew." The hope is that Kickstarter is the beginning not just of a project but of new relationships that can support the organization over time.

Could you imagine using Kickstarter at your institution? What do you see on the site that helps you think about how your organization raises money or communicates with audiences?