CROWDFUNDINGA COMMUNAL BUSINESS MODEL

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By Elizabeth Barrette

You may already be involved in crowdfunding but notknow it by that name. Crowdfunding is a collectivefinancial approach that allows individuals to pool theirresources in support of favorite projects that might not succeedunder a more conventional model. It also lets creative people andbusinesses cater to niche markets willing to support them, evenif the product or service seems odd to outsiders. Crowdfundingboth encourages and thrives upon community, as creators andsponsors form close relationships with each other and as theaudience also develops a collective culture.

These features make crowdfunding a business model thatmeshes well with intentional community. It goes by variousnames, so you may recognize some of your community's projectsor your personal activities as fitting this model. If you're new tothe idea of crowdfunding, perhaps you'll decide to explore it fur-ther or discuss it with your neighbors in community.

Types of CrowdfundingCrowdfunding spans a wide range of methods. Some proj-

ects rely on subscriptions or donations. Others sell products orservices at a particular rate. There are also websites that offerfundraising pages for crowdfunded projects. Amidst all thevariations are some common threads.

Community Supported Agriculture may be the examplemost familiar to folks living in community. You won't oftensee this listed as crowdfunding, but it is. CSAs sell member-ships, allowing people to share both the risks and the benefitsof farming. Members usually influence what foods the farmersgrow for the CSA; they may also volunteer their time or visitthe farm on open house days. Crowdfunding CSAs let farmersuse sustainable methods and members enjoy healthy food whenthe mainstream doesn't readily support those options.

The main crowdfunding sites such as IndieGoGo, Kickstart-er, and RocketHub serve well for two types of project: smallbusiness launches and big project launches. Starting a newbusiness takes money; that's hard to raise conventionally if yourbusiness isn't conventional. But if you can connect with yourniche market, they may help you launch, and then stick aroundto support your business as it grows. Big projects includeexamples like an art gallery show, a print of a digital movie, a

professional printer for a small press, and other instances wherean established project or creator needs a lump sum to accom-plish something important. This is a bit easier because they canoften draw support from an existing customer or fan base. Thecrowdfunding site just makes it simpler to lay out the businessplan for the project, tell people the goal and the perks for con-tributing, and track progress. Both of these project xypts putthe control in the hands of small business owners and ordinarypeople, not bank executives.

Cyberfiinded creativity is the arts branch of this businessmodel. It spans such things as webcomics, serial fiction, poetryevents, divination, music, illustration, sculpture, and othermedia. Some shared-world projects involve a mix of contribu-tions like stories, artwork, and even jewelry. Most cyberfundedcreativity focuses on one creative person, though, and relies ongathering enough of an audience to support the project. Thisremoves the bottleneck found in conventional publishing, artgalleries, etc. by letting the fans fund the items they love bythe people they admire. It also has the advantage of promot-ing uncommon viewpoints or themes that people value, whichmight otherwise get overlooked. Those projects that inviteaudience prompts also help promote people's favorite ideas; ifyou participate in such projects outside your community, con-sider suggesting communal living as a topic. Projects are mostoften funded with donations or subscriptions, although thedetails vary widely. This branch of crowdfunding is particularlyprone to strong community development, and in fact support-ers list that as a reason for participating.

My most successful project is a monthly Poetry Fishbowlthat I host on my Livejournal. People give me prompts abouta theme, then I write poems based on whatever I get. I post atleast one poem for free, and people can sponsor more. There areeven series of poems about favorite settings and characters. Thisproject has been running for over three years; it has a great senseof community among fans who live nearby and far away. Theproject draws us closer together. Another crowdfunding projectof mine is Torn World, a science-fantasy shared-world launchedby Ellen Million. I actually joined that one partly to practice mypeople skills, because it is highly collaborative.

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Rewardsof Crowdfunding

As a business model, crowdfunding hasmultiple advantages compared to moreconventional models. Some apply moreto creators, others more to donors.Some apply to both.

First, it's easy to start small. Setupcosts for creators can be low ornonexistent, depending on thetype of project. This is crucialin a world where most waysof making money start offwith a lot of expenses. Youcan start a crowdfundedproject in your garage oron your blog. Then if itproves popular, you canexpand.

Second, crowdfunding isall about control and influence.As a creator, you retain great-er control over your work: whatyou do, when you do it, and howyou release it. As a sponsor, you gainimproved influence through the moneyyou spend, especially in terms of supportingideas you consider important. Ideallyand thisis where community plays increators and sponsorsfind common ground in projects they both love,and their shared ideas and enthusiasm makethose projects thrive.

This interactivity is one of the hallmarks ofcrowdfunding, which helps distinguish itfrom mass-market business models. As acrowdfunding provider and/or a donor,you can connect with other peopleinterested in this approach. Find outwhat projects they are creating orsupporting, what techniques otherpeople are using, what works ordoesn't work and why. A key featureof crowdfunding is insight parallax: manyheads are better than one. Instead of guessing,creators can ask fans what they want more ofFeedback from multiple people tends to find moreerrors than just one person might, and more solutions. This isparticularly good for answering questions like "Which of thesesketches should I finalize and paint?" or "Should we add an herbgarden or a berry patch to our CSA next year?"

As a result of these factors, crowdfunding is more flexible inits initial construction and more adaptable to changing needswhen compared to traditional models. Creators can design a sys-

tem that works forthem. Audience

members can ask forwhat they want. A healthy crowdfunding

project grows and changes over time in a fairlyorganic fashion. The feedback loop is fast and tight so

that necessary changes are usually noticed and enacted promptly.Cutting out the middlemen of traditional business makes formore efficient function.

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The success of crowdfunding dependson making a connection between

provider and supporters.

Challenges of CrowdfundingOf course, all business models have drawbacks. Crowdfund-

ing requires more work than standard models in some areas.It also misses out on benefits that are targeted toward conven-tional businesses.

First, in crowdfunding, the creator has to do everything orarrange to have it done. That means you either need the skillsyourself, or you need to pay or barter for someone else to dowhat you can't. This can take a lot more time and energy.Compare this to, say, mainstream publishing where an authorturns in a manuscript and then it's the publisher's responsibil-ity to have it edited, typeset, printed, shipped, advertised, etc.With a crowdfunded webserial releasing a paperback edition,the author is responsible for all of that.

Next, crowdfunding creators must figure out fair pricingand keep things affordable. This depends on your offering andyour market. It's hard to know what to charge if you can't findsimilar projects for comparison, and little information has beenpublished thus far regarding typical examples. You also need toknow what people need and can affordan issue familiar inCommunity Supported Agriculture, which deals with weeklyshares of food, and sometimes allows members to lower cashcontributions with work-trade.

The success of crowdfunding depends on making a con-nection between provider and supporters. For the creator, thismeans attracting and maintaining an audience. For the spon-sor, it means finding worthwhile projects to support. Sincecrowdfunding in its modern incarnation is relatively new, thevenues and methods for connection aren't fully developed yet.Even a good project may struggle to find the people who wouldlove it. Even a careful shopper may have trouble identifyingwhich providers are reliable and will deliver what they promise.

Finally, crowdfunding practitioners must cope with a hostileenvironment from conventional business. Crowdfunded proj-ects and providers are often ineligible for loans, grants, awards,facilities, and other benefits aimed at standard models. Crowd-funding as a movement has only a few replacements for theseso far. Also, laws and expectations tend to favor conventionalover alternative approaches. Compensating for this requiresmore research and sometimes more fiddling around to find aconfiguration that will work.

Crowdfunding in CommunityIntentional community is a good environment for crowd-

funding. You have a bunch of people already accustomed toworking together. You can explore different options to find outwhat works for your community.

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First, consider crowdfunding vs. groupfunding. Do you wanta given project to reach beyond your immediate neighbors, ordo you want to keep it all within your community? Ravan,who lives in a shared house, had this to say: "Regarding thehousehold business(es) that we keep trying to put together: wedo more groupfunding than crowdfundingwe keep it insidethe household, and some put in time versus cash. We actuallyhave an umbrella business partnership that we collectively assignour ideas to, and hope we can put together everything to makesomething work. I usually end up putting up the most actualcash, because I make the most at a day job (when I'm working)."

Bear in mind that you can also begin a project as groupfund-ing and then shift to crowdfunding if it works well enough toexpand beyond your own community. Some Community Sup-ported Agriculture projects start with a community garden andthen grow into a business.

Crowdfunding can offer community members an opportu-nity for onsite employment. Many people dislike needing toleave their community every day for an outside job. If you have,for example, a small press running on a crowdfunded model,then it may employ an editor/publisher and a designer/artistfull-time plus some part-time office work for other members.Similarly, community members enjoy opportunities to collabo-rate on projects (such as a spinner and a knitter making softsculptures for sale based on audience requests) or to trade skills(such as a computer expert designing a gallery website for anartist, who reciprocates with original art for the other person'ssite). Community buffers some of the challenges in crowdfund-ingamong other things, it makes it easier to find people to dowhat you can't do personally.

Intentional community is about people sharing eachother's lives and supporting everyone's goals. For cre-ators, a community is a good source of potentialaudience members. For donors, it's a place to findpeople you know and like, whose projects are worthsupporting. Vicka Corey shares some of her experi-ences with crowdfunding in community:"When I played in bands, I playedmostly house concerts. Com-munity is very important tome, in a day-to-day way. Ioccasionally throw moneyat crowdfunded projects,but not in any organized way.1 did a bunch of support of myex-communal-housemate-from-Seattle Dara's Kickstarter proj-ect, which was indeed successfullyfunded."

Notice that she brings up another

helpful aspect: crowdfunding as a way

to keep in touch with people you used to

live with. Similarly it offers a way of support-

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ing people you'd like to live with, whoare a part of your life long-distance, butcircumstances don't allow living together.

Crowdfunding also offers benefits forthe community as a whole. Shared proj-ects give people a chance to work ontheir community-building skills. Brain-storming sessions provide inspirationand connection. Some projects can alsoenrich the community holdings. Forinstance, a community with plenty ofartists and crafters might set up studiospace for them to share, first crowd-funding the budget to build or stockthe studio and then later crowdfundinggallery shows for members to displaytheir work. Outside fans who admire aparticular creator's work may becomecurious about intentional communityand decide to explore that, too.

ConclusionsCrowdfunding and intentional com-

munity have a lot to offer each

other. Look for crowdfunding examplesin intentional communities. Many peo-ple who live in community also preferalternatives to mainstream business andmay have personal projects in progress.Look for people interested in communityamong crowdfunding projects. Donorswho enjoy supporting their creativefriends, or creators who love interactingwith an audience, may also like the ideaof community as part of everyday life.Consider inviting your crowdfundingfriends to an open house or other event.Encourage everyone to be creative andmake connections. Networking makesthe world go 'round, both in crowdfund-ing and in community. '^'

ResourcesCommunity Supported Agriculturewww.localharvest.org/csa

Crowdfunding communities onlinecrowdfunding.dreamwidth.orgcrowdfunding.livejournal.com

Crowdfunding informationpenultimateproductions.weebly.com/crowdfunding.html

IndieGoGowww.indiegogo.com

Elizabeth Barrette writes and edits non-fiction, fiction, and poetry in diverse fields

includingspecu-lative

f i e -t i o n ,

green liv-ing, com-

munity, andpolitics. Her

previous articlesin COMMUNITIES

include "The Rich-ness of Giving" (#141),"Poetry in Community"(#142), "Householding:

Communal Living ona Small Scale" (#144),"Balancing Powers: Lead-

ership and Folbwship inCommunity" (#148), and

"Nurturing Healthy Minds"(#150). Visit her blog The

Wordsmith's Forge (ysabetword-smith. livejournal com).

Outside fans who admire a particular creator's workmay become curious about intentional community

and decide to explore that, too.

Fall 2011 COMMUNITIES 35

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