Thursday, April 14, 2016

Money for nothing

The Arts Foundation’s crowd funding site Boosted sent out an email recently pushing philanthropy as a way to offset funding cuts from Government agencies. It made us wonder just how much Boosted and the Foundation raise each year. While published numbers are hard to find we can make some educated guesstimates.

Starting with the Foundation itself, there are the grants it makes to artists of around $350,000 a year. And then there's Boosted. While the numbers are of course variable last week, for instance, there were 16 Boosted projects online waiting to have money thrown at them. If they all got funded we'd be talking $58,000 raised across the 16 projects. Now for the close-your-eyes-and-guess part. Let’s be generous and say that once a month Boosted projects raise around $60,000. Add them all together and you get say $700,000 a year. (
NOTE on 19 April 2016 Boosted announced it raised $1 million in the years 2013-15 and $1 million in the last 12 months to April 2016. Se also the note below)  Add the Foundation's grants noted above and we get to say just over a million a year. and that could be generous. 
And also we need to remember that on Boosted, like most crowd funding sites, there a cost to getting support and it's borne by the artists. Most of the Boosted projects require ‘gifts’ from the projects to supporters. This does point out a critical feature of this version of philanthropy; even though the gifts are often small it still operates, like most philanthropy, on the ‘nothing’s for nothing’ principle. So while the million (plus?) annual input from the Arts Foundation (now an essential part of the funding scene) is much better than nothing, it's still not enough to even deal to Creative NZ’s shortfall far less bring in additional support. That shortfall in fact was nearly three times what the Foundation raised last year. In spite of the Foundations best efforts we're still running hard to even go backwards more slowly.

For philanthropy to make a difference the government will have to come up with an infrastructure that works both for the people being funded and the people giving the money. Them just saying in a stern voice that we have to move to a philanthropic model is not going to do the trick.

We received an email from Simon Bowden on Boosted that included the following correction to our post. 

'There is an element in your post that is not right. While most crowdfunding websites do require projects to list "rewards" (items given to pledges in return for their money at different levels), Boosted does not have this facility. The reason for this is that all donations made to projects on Boosted are made to the Arts Foundation and qualify for a 33% tax credit. If artists offered "rewards" then the gifts would not qualify as donations. When a project hits its target and closes the Arts Foundation makes a grant to the project. Our announcement of $2 million raised for the arts on Boosted is the amount that we have granted to artists (in some cases plus GST). This amount is net of transaction costs and the small amount Boosted retains to fund our support programme for artists using the site. '