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Taking it to the Streets
Community treasure turns to crowdfunding to complete education

With New Year festivities still alive and kicking at this late hour, you’d be right to think I’m referring to this, or the famously appealing Doobie Brothers song.

Alas, I am not…

Many of us have heard of crowdfunding—an idea similar to crowdsourcing—wherein funds are raised for projects, initiatives or causes at the ‘open-call’ grassroots level.

Crowdrise, started in 2009 by actor Ed Norton and a few others to raise money for the Maasai Wilderness Conservation Trust during the New York City Marathon, amassed $1.2 million in less than eight weeks.  Its focus is on fundraising for millions of charities.

Similar ventures have sprouted up – some 250 or so - creating a popular way to raise money for films, books, business startups and charitable projects.  Some have targeted specific causes, such as Fundageek.com, which went live around Christmas and focuses on technology and science projects. It had nearly two dozen projects within a week, and several surpassed $1,000 in funding.  IndieGoGo.com, one of the first crowdfunding sites, was launched in the beginning of 2008 with a niche focus on helping independent filmmakers finance their projects. It funds millions of dollars’ worth of causes every month, according to its founder, Slava Rubin.

Founded as a way to ‘democratise fundraising’, Indiegogo now has 18 employees and $5 million in revenues (users pay 4% if the project meets its goal, and 9% percent if the poster opts for “flexible funding,” wherein funds are distributed even if the project falls short of its goal). At least half of its 50,000 projects are in the creative category and one of its competitors, kickstarter.com, caters specifically to projects in the arts, technology, design, food or publishing sectors. Profounder.com is specifically designed for entrepreneurs and includes term sheet templates for revenue sharing; its model uses the U.S. securities exemption that allows entrepreneurs to offer securities to unaccredited investors under certain conditions. Appsfunder.com targets app developers (and their supporters); quirky.com attracts inventors; startsomegood.com is for social entrepreneurs.

Most of the sites keep a percentage of funds received, though they may offer different terms. Some return funds if the project doesn’t reach its target; others allow one to keep the money if the goal isn’t met but charge higher fees.

Though everyone is careful not to use the word ‘investment’ given SEC rules, Congress has certainly been paying attention: a number of pending bills would change the rules drastically for crowdfunding, leading some supporters to speculate it could spell the end of angel investing.

Entrepreneurs have started to take notice, too. Some project contenders have included a women’s salon, brewery, bowling club and hotdog stand.

At the local level, beloved freelance journalist, writer, and editor Rodika Tollefson jumped feet first into the deep end of the crowdfunding pool after long delayed dreams of returning to graduate school commenced, then were cut short when she lost her main source of freelance income just after the quarter started. After much hand wringing, she emerged from the ashes to launch an ambitious Indiegogo project to raise $9,000 in 49 days called “Go to 11”.

Her goal is to attract business sponsorships in exchange for some creative services (called perks), which include writing press releases, critiquing your blog, website, short report or brief communication strategy, actually starting your blog or scripting and storyboarding your video, bringing in three experts on-site to present to your group or employees about social media, communications strategy, and information technology best practices, even a case study about crowdfunding. There are also Platinum Dining Cards and popcorn for foodies. Don’t need a perk and just want to support a go-getter who has given so much to the community? There’s a ‘no strings attached’ category.

Rodika’s efforts are not the typical approach one might take to finance education, but it is an idea which goes well beyond ‘the ask’ and offers invaluable business services at a much lower market cost than if the consultants were directly hired.

With the clock ticking and merely days left for her to decide about the fate of her dream, I’d say this community treasure is one worth fighting for. Visit her site and see if you can help.

Go, Rodika!

Doña Keating is President and CEO of Professional Options, a prominent innovator in the policy and management consulting industry which provides solutions for businesses, organisations and governmental agencies. She is also a principal in K2 Strategic Solutions, a partnership between Professional Options and Keating Consulting Service which has a combined 50 year history of providing information technology, policy, and management consulting.

 
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