The Big Idea: Crowdfunding at the RSA
On 16th September we launched an area on the crowdfunding platform Kickstarter www.kickstarter.com/rsa. Fellowship Council member Ed Whiting has led the work to set this up. Here you can read Ed’s reflections on why crowdfunding, why the RSA, why now and how you (or your project) can get involved.
Online ‘crowdfunding’ started in the US around 4 years ago and today is growing all the time, with hundreds of platforms catering for different needs and interests (have a look at this and this directory to get a sense of the range of platforms currently operating) and breakthrough innovations and products happening all the time, as well as bigger and bigger campaigns. Nesta recently estimated that within five years crowdfunding will grow to £14.5bn of finance annually in the UK and account for 50% of charitable donations.
The two main types of crowdfunding are:
- Donation-based crowdfunding, where projects raise funding for creative projects through non-refundable donations, offering non-financial rewards (e.g. exclusive mementos from the creative process, unique experiences, or access to the team involved in the project) in return for each pledge. Most platforms require projects to work on an ‘all or nothing’ basis, where projects only receive the funds they have raised if they hit their funding goal.
- Equity crowdfunding allows people to own shares in exciting start-ups for the first time without all of the friction normally associated with doing so. As I’ve blogged, there are big differences between donation and equity-based crowdfunding, although both offer exciting opportunities for creatives and entrepreneurs.
In its simplest form, crowdfunding is nothing new – it’s a way of rallying fans and supporters to raise money for exciting creative propositions. What is really exciting about crowdfunding is the way that online social networks enable exciting ideas and projects to gain support really fast, and the way that good ideas can spread across generational, regional and international borders at a speed never before possible. This is also why the prospect of connecting the RSA Fellowship to Fellow-led projects is such an exciting possibility.
Barry James, a Fellow who’s been advising us (who has set up the Crowdfunding centre), put crowdfunding’s benefits as follows: it enables entrepreneurs to build a business from scratch without the difficulty of securing a loan, but with a full order book, a network of supporters and people who’ve given feedback on your creative proposition. The exercise of designing and promoting the simple pitch required by crowdfunding platforms is a great way to shape a business or creative project into a compelling ‘ask’ and rally a crowd of followers behind it – skills and activities that are vital in starting and growing any social venture.
Why the RSA?
At the core of the RSA’s mission and purpose is its Fellowship, comprised of 27,000 Fellows supporting and driving the Society with £160 a year subscriptions. As we know from Fellowship surveys and the wide range of conversations at Fellows’ events that Fellows love to hear about new innovative ideas and are committed to make social change happen. We think that crowdfunding could be a really exciting way to bring Fellows together behind exciting projects for social change, and show how the Fellowship can have real, tangible impact in the world. We also think that an area with successful RSA crowdfunding projects will be a great advertisement for the work of the RSA and its Fellowship, and will be a really compelling ‘calling card’ for other potential Fellows who share our values and ambition.
Last financial year 2012/13 there were 175 Fellows’ ideas for social innovations that applied to the Catalyst programme to get £1,000-2,000 grants, and to get help from other Fellows. While we’re really excited about the range of projects already funded through catalyst, we’ve also seen great potential among the many we haven’t awarded grants, and crowdfunding offers the possibility for many more projects to grow to maturity. And the opportunities to grow the scale of the financial support Fellows can receive through Catalyst are also really exciting: if only 1 in 5 Fellows contributed £20 over the course of the year, we would equal the whole Catalyst grant budget. With this in mind, we’ve expanded the Catalyst programme to offer support, advice and publicity to Fellows who want to run crowdfunding campaigns to build their social venture, and they’ll be projects led by RSA teams doing this too.
How can you get involved?
We are hoping to launch the RSA’s new ‘curated area’ on Kickstarter on 16th September, with an event Crowdfunding – where next, how far, and what are the limits? Part of the RSA Events programme. To succeed, it’ll be vital for Fellows to get behind the individual projects that you find most exciting, so I’d like to encourage you to help us in four ways:-
- Join the debate on twitter by pledging your support with the hashtag #RSAcrowdfunding, with your message displayed on a special ‘pledge wall’ at RSA House.
- Back your favourite project, then shout about it to your network, through email or your social networks.
- Watch the launch
- Start a project; think about what ideas you want to put to the crowd and if you come across a new or early stage idea, share the word that the RSA is the best place to have an idea and encourage them to apply to join our new curated area! If you already have such an idea, read this and submit your application.
Ed Whiting, Former Team Leader of the Financial Regulation Strategy team at HM Treasury and Co-Founder of arts-focused crowdfunding platform WeDidThis, Ed is currently a Senior Programme Manager NESTA working on their Centre for Social Action. In addition, Ed is an RSA Fellowship Council member who sits on the advisory group to our Catalyst programme, launching new social ventures led by RSA Fellows, from which he has driven our work to set up the new RSA crowdfunding area on Kickstarter. Follow him at @edwhiting1