FINANCE SPECIAL...CROWD FUNDING

MONEY FOR NOTHING 

CROWD FUNDING

PAY PALS Youngsters are using crowd-funding to finance personal missions such as sailing trips, photo exhibitions and cycle tours across the country

For their final-year college project, mass-media students and film lovers Aniket Dasgupta, 21, and Swati Madhavan, 20, needed to make a short film. They wanted their 10-minute work to shine, but they needed funds for equipment and software. So, in August, they decided to reach out online.

If they received enough funds, they decided, they would expand the 10minute film project into a 90-minute feature film on their chosen topic — independent filmmakers in India.

Applying for a two-month slot on crowd-funding website wishberry.in, the duo collected Rs 38,000 by day 57, most of it in the form of small sums donated by friends and relatives.

Then a blogger interviewed them and donations began pouring in. By the end of their 60-day timeframe, they had collected Rs 1.01 lakh — Rs 21,000 more than their target.

“When we did our final tally, we found that 60% of our funds had come from strangers,” says Dasgupta. “The blog gave us the extra push, establishing our cause as a cool one.”

A total of 49 people donated sums ranging from Rs 200 to Rs 20,000.

Fellow mass media student Apoorva Gavarraju, 19, for instance, donated Rs 1,000 from her pocket money because she feels strongly about the cause of independent films.

“People in our country are so stuck on Bollywood. They don’t even know about the interesting indie projects out there,” says Gavarraju. “I donated because this film aims to increase that exposure. I wouldn’t have donated for a work of fiction.”

Thanks to their windfall, Dasgupta and Madhavan now plan to turn their film, The Other Way, into a 92minute documentary.

Elsewhere, similar appeals on crowdfunding websites are helping youngsters achieve personal goals and fulfil missions ranging from sailing expeditions to art projects and eco tours.

“After charitable causes and public events such as gigs being successfully crowd-funded, individuals are now financing personal goals through the same medium,” says Pratik Gupta, co-founder of social media consultancy FoxyMoron.

With high disposable incomes, other youngsters are likewise willing to donate to a cause that they strongly feel about, adds Sarla Bijapurkar, associate professor of sociology at KJ Somaiya college. “Donating to such projects gives them a sense of fulfillment.”

RAKING IT IN

The concept of personal crowdfunding has always existed in India. “We have a tradition of approaching friends and family members to help finance a wedding, a start-up venture etc,” says Gaurav Gupta, VP of insights, innovation and social media for MSLGroup India. “But earlier, there was a stigma attached to asking for help. And seeking help to travel would have been considered frivolous. With the advent of social media, it is now considered cool to get funds via crowd-funding.”

An important aspect of making this model work is the efficient use of social-media platforms. “You can’t run a campaign on a crowd-funding site and think that will be enough,” says FoxyMoron’s Pratik Gupta. “You have to reach out to as many people as possible and brand your campaign.”

That’s exactly what Dasgupta and Madhavan did. “We bombarded people with e-mails, tweets and Facebook messages asking for support,” says Dasgupta.

The branding helps potential donors identify with the cause enough to donate money.

“Your sponsors have to be able to relate to your campaign,” says Pratik. “I have noticed that most crowd-funders fund activities and campaigns that they aspire to undertake but haven’t been able to. Hence they identify with the personal goal.”

This aspirational and vicarious motive, for instance, helped Adrienne Thadani garner funds for a community urban farm at Mohammed Ali Road in Mumbai.

A total of 133 people, Indians and foreigners, donated a total of $6,510 (Rs 3.58 lakh) to her campaign, which ran on kickstarter.com for three weeks in May.

“When people sponsor your project, they also learn about it, so crowdfunding is also a great way to promote awareness,” says Thadani, 25, founder of Fresh & Local, a nonprofit organisation that works to promote organic food in Mumbai. Thadani eventually also conducted urban-farming classes for interested donors.

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HOW IT WORKS

In India, websites such as wishberry.in and US-based kickstarter.com accept appeals for funds in exchange for a fee of Rs 3,000 to Rs 5,000.
Each campaign is allotted a timeframe, anything from two weeks to three months. Once the donations start flowing in, a share of 8% to 12% accrues to the website.
Crowd-funding websites are registered as service providers and all applicants who are not NGOs must pay income-tax on the funds raised.
The websites carry out random checks on campaigns hosted on their urls, but offer no guarantees about campaigns featured.
To dissuade fraudsters, there is a stipulated timeframe within which every campaigner must accumulate a certain percentage of his target. If he fails to do so, any money received is returned to donors and the campaign is discontinued. The campaigner’s fee is not refunded.

SUCCESS STORIES

SUSAN HAPGOOD, 55
American art historian and curator currently based in Mumbai; founder of the art space Mumbai Art Room
THE CAUSE: A non-profit exhibition of rare photographs of Bombay, from 1840 to 1900
THE PLATFORM: US-based groupfunding website kickstarter.com
CAMPAIGN DURATION: October 27 to November 21
TARGET: $15,000 ( R8.25 lakh)
COLLECTIONS: $385 ( R21,175) from a total of seven contributors

HARI CHAKYAR, 36

Advertising professional based in Mumbai; has always been passionate about the environment and likes planting trees
THE CAUSE:
Project 35 Trees — a journey to every state and union territory in India to discuss environmental issues and plant trees with school students
THE PLATFORM: Indian crowd-funding website wishberry.in
CAMPAIGN DURATION: November 1 to December 31
TARGET: Rs 5.75 lakh
COLLECTIONS SO FAR: Rs 1.13 lakh from a total of 55 contributors from across three countries