Crowdfunding for culture: challenges and opportunities for a paradigm shift?” ISW, University of Macerata 3 December 2019 – Lesson 2 Elena Borin Associate Professor, Director MSc Arts and Cultural Management, Coordinator Research Group ACM Definition of Creators of a project and supporters (backers) PROJECT CREATORS "Crowdfunding is a way of raising money to finance projects and businesses. It enables fundraisers to collect money from a large number of people via online platforms. CF PLATFORM

One could describe crowdfunding as involving “an open call, essentially through the Internet, for the provision of financial resources either in form of donation or in exchange for BACKERS some form of reward and/or voting rights and royalties” (Belleflamme et al., 2014) MODELS OF CROWDFUNDING

Crowdfunding main points (Calveri and Esposito, 2013) ➢ Use of internet and social media for communication ➢ Technology as an enabler ➢ Many donations of small amounts: potentialities of the crowd ➢ Social and relation capital ➢ Crowdfunding platforms (most cases) CROWDFUNDING FOR CCS

• In the EU, a total of €247 million has been raised by the crowd for CCS campaigns between January 2013 and October 2016. • By far the highest volume is seen in the UK with €121 million, accounting for 41% of all transaction volume. • France comes second with a volume of €63 million (23% of total volume), followed by Germany and the Netherlands with €23 million (8%), and Belgium with €11 million (4%).

• These five countries represent 87% of all raised volume from CCS campaigns in Europe. CCS CAMPAIGNS LAUNCHED PER SECTOR AMOUNTS RAISED PER CCS AVERAGE DONATION PER BACKER PER CROWDFUNDING CAMPAIGN Crowdfunding transaction: distribution Countries with > 1,000 campaigns launched Crowdfunding platforms

• Platforms as intermediaries: 3-15% commission of the raised amount (Economist, 2010) + usually other intermediaries for the payment

• Examples: • 's fees break down: • Kickstarter's fee: 5% of total funds raised • Credit card processing fee: 3% + $0.20 per pledge Pledges under $10 have a discounted micro-pledge fee of 5% + $0.05 per pledge • 's fee: • If the funding goal is reached: 4% of total funds raised • If the funding goal is NOT reached: 9% and you keep what you earned • Credit card processing fee: 3% - 5%

But also DIY crowdfunding and agencies that supports organizations in their DIY crowdfunding – control of their social capital (Startseed platform), Crowdhoster.com (invitation only) Services offered by platforms during crowdfunding campaigns Crowdfunding platforms

Types of platforms: ▪ ‘all or nothing’ the project only gets the money pledged if they reach their target on time (Kickstarter, KissKissBankBank) – more guarantees for the investors/backers ▪ ‘take it all’ model lets the project keep any money pledged by the deadline, even if the target is not reached (Indiegogo) ▪ Mixed models

Source: crowdfunding4culture Crowdfunding platforms

Types of platforms: ➢ Generalist platform (Ulule, Kickstarter, etc.) ➢ Specialized platform, among which: ✓ Geographic specialization (ex. GwenneG (Bretagne), Graines d'action (Bourgogne), Nordstarter (Hamburg, Germany), GINGER (Emilia Romagna, Bologna) ✓ Specialization in sector (e.g. cultural sector, civic crowdfunding, etc.)

Crowdfunding platforms per sector In CCS, Crowdfunding strictly linked to creative and cultural industries: ➢ driving force behind the rise of crowdfunding • Kickstarter and Indiegogo still focus mainly on creative projects (audiovisual, videogames, photography or new design products) • specific niches such as publisher Unbound and unglue.it who are focusing on removing copyrights on books, or emphas.is who focused purely on funding photography projects. • Beart (visual arts) • Cineama (cinema) • Bandbackers (royalty crowdfunding for music sector) Example: Nordstarter Commeon (ex CultureTime)

Dartagnans (cultural heritage) Crowdfunding platforms

Crowdfunding for investing in, and lending to private businesses • Equity crowdfunding platforms like and , people have the opportunity to get an equity stake in innovative businesses (Seedrs: fees only on profit -7,5%) • Access crowdfunded loans. FundingCircle has thus far facilitated approximately £100 million in lending to more than 1,700 UK businesses offering interest rates of around 9 per cent to lenders before fees. Crowdfunding platforms

Crowdfunding public and social projects: • Civic crowdfunding as a catch–all term for projects with a public or social focus • Potential to disrupt how money for charitable causes is sourced and how public services and spaces are used and paid for. • in the UK has been pioneering co–investment models between the crowd, private sector and public sector investors (Community Centres and local regeneration projects) • platform: integrating crowdfunding in how the city of Philadelphia commissions and funds new public projects. • Third sector: Peoplefund.it, SolarSchools and Buzzbnk (UK) support projects with a social objective Crowdfunding platforms

Civic crowdfunding • Luchtsingel footbridge in Rotterdam (Netherlands) 2011 • Example of how local people crowdfunded a public good project • Initial fundraising came from a crowdfunding campaign "I make Rotterdam" organized by ZUS. For every €25 donated, supporters could have their name inscribed onto one of the 17,000 wooden boards that line the edges of the bridge. • Over 8,000 people signed up to support the campaign financially. The architects were later granted funding to complete the project by the city council. Crowdfunding platforms: DIY But some institutions prefer to create their ouw platform:

Louvre museum has its own dedicated platform: www.tousmecenes.fr

Crowdfunding used regularly, in total €4million by around 22,000 donors

Donors contribute to different projects: acquisitio "The three graces" by Lucas Cranach Conservation of the Winged Victory of Samothrace ➢ Advantages: no fees ➢ But high costs for building a personalised platform Crowdfunding platforms

PATRUM, the Vatican Crowdfunding App:

2015 the Vatican Museum launched a mobile app tha allows visitors to directly donate to items in need of restoration Crowdfunding also outside platforms….

November 2016: KissKissBankBank (French brand operating 3 crowdfunding platform: KKBB, hellomerci and lendopolis) created in Paris a "store", La Maison du Crowdfunding" to reach customers beyond the early adopters who joined so far

Information on crowdfunding, info on projects, meetings, etc. CRITERIA for choosing a platforms Main criteria for CCS actors to select a crowdfunding platform (Source: crowdfunding4culture) Choice of the hosting platforms

Between January 2013 and October 2016, only 53% were launched on crowdfunding platforms located in the EU, whereas almost half of the campaigns were hosted on US-based platforms (47%). According to crowdfunding4culture, the main reasons for European creatives to use US-based platforms are: ➢ attractiveness of the US-based global platforms Kickstarter and Indiegogo in particular as major platforms with a huge global backers’ community that project holders can tap into; ➢ lack of a suitable crowdfunding platform in the home country. ➢ reach out specifically to US backers that are, in general, considered to be more used to crowdfunding and philanthropy ➢ market research to enter the US market. Relative share of CCS campaigns launched on US- based (global) platforms

(Source: IDEA Consult, based on Crowdsurfer data) Crowdfunding models

They represent financial investments, with expectation of a return on investment Emerging: « royalty crowdfunding » Crowdfunding models

Donation Model Means for charities, for social or charitable projects, to gather a community online and to enable them to donate to a project. • Most established charities facilitate this through their own website • Established charities set up crowdfunding initiatives to allow donors to contribute to specific projects rather than to the charity as a whole. • Cancer UK’s ‘myprojects’ page where funders can choose to donate to a specific cancer research project. • Distribution of donation model crowdfunding: • - Social Causes: 32,6% • - Films and Performing Arts: 14,1% • - Business and Entrepreneurship: 12,8% • - Music and Recording Arts: 9,3% • - Arts: 7,9% Crowdfunding models Reward Model

Most popular form of crowdfunding, especially for creative, social and entrepreneurial projects. people to contribute to projects and receive (often non–financial) rewards in return: the reward holds significant value to the funder (the more you donate the better the reward you receive)

For some projects similar to a pre–sale agreement: donors to be the first recipients once the production is complete. ▪ Kickstarter, Indiegogo as well as sites like WeFund ▪ 84% of Kickstarter projects do not respect deadlines for delivering the rewards

• Distribution of reward model crowdfunding: • - Social Causes: 17,7% • - Films and Performing Art: 17,7% • - Business and Entrepreneurship: 16,3% • - Music and Recording Arts: 11,1% • - Fashion: 8,2% Some examples of successful reward-based projects in the arts and cultural sector Marina Abramovic Institute: The founders (Kickstarter, 2013) • 4765 backers for the Marina Abramovic Institute • total of $661,452 • Reward: ➢ Embrace MA for 1 $ ➢ Workshop about your project for donations 5000$ ➢ Movie Night ➢ Cooking and live events with the artists Crowdfunding models

Lending Model ➢ individuals or businesses apply through the platform uploading their pitch ➢ members of the crowd taking small chunks of the overall loan (peer- to-peer lending) ➢ transparency and accountability ➢ BuzzBnk, Funding Circle or Zopa. ➢ are underpinned by data on borrowers’ FS so that lenders can adequately assess the risk involved in lending.

• Distribution of lending model crowdfunding: • - Business and Entrepreneurship: 54,2% • - Energy and Environment: 25,0% • - Social Causes: 12,5% • - Music and Recording Arts: 4,2% • - Arts: 4,2% Crowdfunding models

Investment/Equity Model ➢ crowdfunding to investing for equity, or profit/revenue sharing in businesses or projects ➢ slowest to grow due to regulatory restrictions ➢ valuable source of finance for those businesses and projects that may be high risk but have significant potential. ➢ Crowdcube and Seedrs • Two types of equity crowdfunding: • Investment Securities Investors acquire company shares, receiving ownership of the company • Revenue sharing Investors receive part of the profits generated by the project (drafting ad hoc rules) • Distribution of equity crowdfunding: ▪ - Business and Entrepreneurship: 29,1% ▪ - Social Causes: 23,3% ▪ - Information and Communication Technology: 14,9% ▪ - Film and Performing Arts: 14,6% ▪ - Energy and Environment: 5,1%

CURRENTLY ALSO NEW MODELS BASED ON ROYALTY Crowdfunding models Hybrid models: While the majority of platforms operate with only one of the models, some platforms also operate hybrid models encompassing a number of the models above. Different forms of the model may be complements as well as substitutes. Producers of the part–crowdfunded movie Iron Sky used both reward crowdfunding and profit–sharing crowdfunding to raise €1.2 million to fund the feature–length movie. • Examples • Buzzbnk: reward and lending crowdfunding • BnkToTheFuture: reward, lending and equity • Dartagnans: experimenting with the creation of new models…. Use of CF platforms in the CCS: sector comparison ➢in all sectors: the reward model is predominant. In most sectors this model is used for more than 80% of campaigns. In Heritage is this percentage lower, significant use of donations. ➢Across sectors: the highest numbers of campaigns are launched in the UK and France, the two biggest markets of crowdfunding in Europe for CSS; ➢ creatives also have a high preference for US-based platforms, with US-based global platform Kickstarter hosting the highest number of campaigns in almost all sectors, apart from Film & Audiovisual (hosted mainly by Indiegogo) and Heritage. ➢ Indiegogo is the second most used platform per sector apart from Visual Arts and Literature, Books & Press, where Ulule is mostly used. Crowdfunding models

The use of different crowdfunding models in the CCS (Source: crowdfunding4culture) Crowdfunding models

Country differences in the use of crowdfunding models in CCS

(Source: crowdfunding4cul ture) Crowdfunding models

Country differences in the use of crowdfunding models in CCS: France and UK

(Source: crowdfunding4culture) Focus on subsectors: performing arts Focus on subsectors: performing arts Focus on subsectors: Visual arts Focus on subsectors: Visual arts Focus on subsectors: film and audiovisual Focus on subsectors: film and audiovisual Focus on subsectors: cultural heritage Focus on subsectors: cultural heritage Focus on subsectors: MUSIC Focus on subsectors: MUSIC Focus on subsectors: video games Focus on subsectors: video games Why a crowdfunding campaign? POINT OF VIEW OF CCS ORGANIZATIONS

• Crowdfunding4culture: crowdfunding is/has been used to (co-)finance a specific creative work (a film, a painting, a performance, a book, etc.). POINT OF VIEW OF THE CCS ORGANISATION Reasons to use crowdfunding Among the “top 4” drivers, two types of reasons prevail: 1. crowdfunding is used as a “financing tool” in the absence of other available finance or to match other types of finance 2. crowdfunding is used as a “community building tool” in order to increase community involvement or reach a wider audience. POINT OF VIEW OF THE CCS ORGANIZATIONS

Main reasons for not using crowdfunding among CCS actor The top 3 reasons are: 1. CCS actors have no need to look for additional funding; 2. crowdfunding is too complicated and/or too time consuming to implement; and 3. CCS actors experience hesitance to ask family or friends for money. Point of view of the backers Crowdfunding population Crowdfunding population

• Age distribution Crowdfunding population

• Education and income Backers' information source

Backers' information sources REASONS FOR BECOMING A CCS CROWDFUNDING BACKER Backers get into CCS crowdfunding mainly: ➢ to fund a project close to their interest or to support their community ➢ the opportunity to support someone they know ➢ the opportunity to directly engage with the projects ➢ the possibility to obtain an exclusive reward

• On the other hand, tax incentives and image building are not motivators to donate or invest in CCS through crowdfunding. • Similarly, showing to others that they have invested/donated represent no incentive to participate in crowdfunding for CCS projects. In sum

Crowdfunding seems a easy to use method for getting funding for CCS projects, it reaches a young audience with higher education

But there are some risks…. Success rate of CCS crowdfunding campaign

• Between 2013 and October 2016 the Cultural and Creative Sector in Europe has raised more than €247 million through crowdfunding. • Although the number of campaigns since 2013 has increased significantly, this cannot be said about the success rates. In fact, when looking at the percentages of successful campaigns per year, we see a decrease in numbers of campaigns reaching their targeted goal. • The success rate has declined since 2013, but has remained stable on 49% bentween 2014 and 2016. There is still a very high rate of unsuccessful campaigns

COSTS VERSUS BENEFIT • “Monetary” costs + costs in terms of time investment, human resources, etc. • Platform hosting fee: some platforms, although not all, charge an initial cost just for hosting the crowdfunding campaign. This cost varies between €0-300 and will be charged to all projects, be that successfully fundraised or not; • Success fee: if a project is successfully funded, platforms will take a percentage of the total amount raised.(ranges between 3% and 12% of total raised). Higher fee is usually charged on the “Take it all” model. • Payment processing fees: Crowdfunding platforms work closely with payment providers in order to facilitate money transfer from the backers to the crowdfunding campaign: payment providers apply their own service fee for every transaction made. On average, this fee is 3%. For instance, for every €100 donation/investment, only €97 reaches the campaign; and • Delivering rewards: Once a campaign is successful in reaching its goal, it is time for the campaigner to produce and deliver the promised rewards to backers (at least in a reward-based campaign). Apart from time and resources this requires specific costs, i.e. postal fees, production and packaging costs, etc. IS IT WORTH IT? CROWDFUNDING CAN BRING OTHER BENEFITS Motivations for crowdfunding: creators and supporters Designing and implementing a crowdfunding initiative The process of crowdfunding Crowdfunding for cultural projects

➢ Peculiarities of arts/cultural projects (different type of marketing) ➢ To understand if a cultural project is "crowdfundable" ➢ Charismatic project, appeal on different types of audience ➢ Determine the potential of the project in terms of crowdfunding Crowdfunding for cultural projects in practice • The crowdfunding campaign for arts and cultural projects should start with the identity, mission, vision and values of the organizations and on its social and relational capital

• But it is also an ad-hoc campaign, that is based on the peculiarities of the project

• Importance of the preliminary/design phase to understand the potential of the project Successful CF projects in CCS

The crowdfunding campain «Be with us and buy a piece of history» (Palazzo Madama, 2013) Crowdfunding integrated with more traditional methods (small portable boxes, word-of-mouth) 1589 supporters 90000 € of donations • Building up on already existing community (on- line/offline) • Museum start-up contribution: 30000€ Crowdfunding in practice for arts and cultural projects Crowdfunding main phases

1. Preliminary analysis of the project 2. Work ecosystem analysis 3. Donors analysis (current and potential) 4. Budgeting and estimation of their potential donations and reward system 5. Choice of crowdfunding platform 6. Planning comunication strategy 7. Creating project page for crowdfunding campaign 8. Implementation of the campaign 9. After-the campaign actions (Maréchal, Del Bono, 2014) Preliminary analysis of the project Preliminary analysis of the project

▪ Determining the charisma of a project is usually carried out through a qualitative approach to the project, to analyze in depth its main characteristics ▪ Matrix for project evaluation (eg: Matrix MDB (Maréchal, Del Bono, 2014) Gross Net Evaluation Matrix for objective Questions evaluation (current (potential) situation) Innovation Mobilize, get into action How is the project innovative, exceptional, new? 5 5 project Would you personally like to support this project? Contents Emphathy creation What are the available contents: archives, 3 4 testimonies, interviews? Do you have all the evaluation elements for creating an identifiable representation? Budget Reassuring and Do you have a detailed budget of revenues and 2 3 accountability expenses? How will you use the additional resources that you will collect? Planning Getting ready do you have enough time for preparing the 4 4 project? Are you also available to manage the after-donation part? Scaling from 0 to 5 Confidence Guarantees what is the reputation of your organization?Could 4 5 you demonstrate a good use of the collected 0 inexistent funds? Representati Finding spokepersons, Do you have a key person who could support your 2 3 1 very insufficient embodying of your values campaign in the media? Who has the scientific or ves/ambassa technical legitimity? 2 insufficient dors 3 sufficient Community Unite Do you communicate regularly with your public? 5 5 Is your community already engaged and present? 4 good Recognition Retain, win the loyalty What will be the place of your donors in the 4 4 5 excellent campaign? Will you be able to update them regularly on the project? Reward Thank What is the reward you want to give to your 4 4 backers? The financed objective will be visible and accessible to the donors? Attractivene Attract Is the objective of your campaign already well- 2 3 known? Is it possible to link it with a special event ss (celebrative, current societal challenge, etc)? Matrix for project evaluation

objective

Questions Innovation Gross Evaluation (current 5 situation) Attractiveness Contents Net evaluation (potential) 4 3 2 Reward Budget 1 0

Recognition Planning

Community Confidence

Representatives/ambassadors Work ecosystem analysis Work ecosystem analysis

➢ Focus on your work ecosystem ➢ Analyze the people involved in designing, planning and carrying out the project ➢ Need to identify the main stakeholders of the work ecosystem of your crowdfunding campaign and they current/potential role According to Maréchal, Del Bono 3 levels: • Level 1: who are the decision-makers? • Level 2: who will help you to co-create your campaign? • Level 3: Who will support you during the implementation? Work ecosystem analysis

Objective Internal External Mayor, They approve the project, Directors, CEO, legal representatives of sign agreements with represetnatives, CFO, Decision-makers the Municipality platforms and follows president of the association, Cultural Office, results of the campaign etc. Politicians, etc. co-design and create the experts, artists, community campaign bringing Graphic designer, PR managers, Project team competences and skills, no agencies, Advertising communication/PR manager, hierarchical structure agencies, etc accountants, etc. (often) they facilitate the Tourism office, Collaborators/stakeholders implementation thanks to Intermediaries, receptions, Friends societies, and representatives their relational capital and guides, etc. philanthropists, city contacts with public councils, etc. Donors analysis Donors analysis

• Aims of this phase: ▪ Identifying the community of donors ▪ Creating a marketing strategy to catch the donors/backers ▪ Measuring the "donors population" (quantitative and qualitative) ▪ Establish the role of our partner companies

Each project is unique and relies on a specific community of donors and supporters Donors analysis

• Types of donors: circles of proximity for profiling donors

PROJECT Donors analysis

definition challenge relation interaction

involving them further personal relation. daily, weekly interaction: circle 1: close close personal relations: (apart from donations): They support you phone, personalized emails, relations family, friends, suppliers sharing, representing, more than the sms, etc etc. organization

they already support the values and artistic lead them to support the often knowledge of monthly: email to members, circle 2: members, mision of the project: campaign, enhance various cultural social media, annual ambassadors members, visitors, them organizations as our program information audience, etc

relation is not already they don't know you inexistent or sporadic, often circle 3: general lead them to know and built. Need to work directly: passive through mass media (radio, public discover the project on the local sense of community TV, press), etc; belonging Estimation of budget, potential donations and reward system Estimation of budget, potential donations and reward system ▪ Aims of this phase: Budgeting for the project: ➢ Evaluate the required budget for your project ➢ Evaluate the integrated fundraising strategy, among which the crowdfunding campaign should be inserted Financial capacity of the backers/community: ❖ determine the financial capacity of your community (ex. through donation matrix) ❖ choosing rewards for each category of backers Estimation of budget, potential donations and reward system • Budgeting for the project:

• Evaluate the required budget needed to develop your project • Is a crowdfunding campaign necessary or suggested? How does it integrate with other fundraising strategies? • Evaluate the different costs of the project (divided by activities) Estimation of budget, potential donations and reward system

Financial capacity of Estimated average donation: 50 the backers/community: Lists of contacts/potential donors circle 1 circle 2 circle 3 organization's database 600 Determine the friends' associations 200 financial capacity of lists of the president, director, etc. 150 your community (ex. subscribers to activities 210 through donation members of the organizations 1000 matrix, Maréchal, Del facebook (or other social media) 7000 website 1000 Bono, 2014) visitors (over a period of 2 months) 3000 ………. total contacts 950 1210 11000 • Total amount of the expected donations Conversion in effective donors 25% 2% 0,1% total effective donors 238 24 11

estimated amount of donations: 11875 1210 550 Choice of crowdfunding platform Choosing a crowdfunding platform

Choice between:

➢ Generalist platform ➢ Specialized platform, among which: ✓ Geographic specialization (ex. GwenneG (Britain), Graines de start (Bourgogne)) ✓ Specialization in sector: Commeon (ex CultureTime), Dartagnans (cultural heritage)

✓ Choice on the basis also of support service (back office, consulting for project communication, etc) Planning communication strategy Selecting communication strategy

• Map and choose the media through which communicate your project • POEM for mapping media of communication • Paid media: print and banner advertisements. On the web, companies use Search Engine Marketing (SEM), which is sometimes called Pay Per Click (PPC) in the form of Google Adwords or Bing Ads. • Owned media: company’s website, blog, infographics, social media profiles, email, and Youtube channels. The advantages of this media is total control over its content and cost. • lead nurturing • Earned media: recommendations by visitors or influencers, press coverage, etc.. Trip Advisor, Amazon, social media shares and likes • very influential with buyers • very difficult to control • hard to measure. Donation planning: U-shaped curve

U-shaped curve of donations: 20-60-20 • Funds collected by donation right after launching: 20% • Funds collected by donation during campaign: 60% • Funds collected right before end of

campaign: 20% of donationsof Planning careful the use of each

communication media according to the Amount phase

NB The updating about the project should be costant Week of donation Creating project page fro crowdfunding campaign Creation of the project page on crowdfunding site

• The main page should contain some key elements: ➢ Title ➢ Sub-title ➢ Official video ➢ Presentation ➢ Budget and key financial figures ➢ Project proposers ➢ Team of the project (all the actors involved, also ambassadors, etc) ➢ Dinamic indicators (number of contributors, collected funds) ➢ Reward system ➢ Partners ➢ Credits and sources Creation of the project page on crowdfunding site https://www.kickstarter.com/projects/julianunes/julia-nunes-makes-music?lang=it Creation of the project page on crowdfunding site Creation of the project page on crowdfunding site Implementation of the campaign Implementation of the campaign

▪ Implementing the actions planned in the previous phases ▪ In particular: official launching ▪ Managing the costant updates, comments, requests of informations ▪ Storytelling ▪ Managing the communication campaign ▪ Managing the activities next to the deadline of the crowdfunding campaign ▪ Managing financial information (tax deductions) ▪ Managing problems and unexpected events After-the campaign actions After the crowdfunding campaign…..

• You are not done! ➢ Communicate and thank the community of backers ➢ Enhance the community contribution ➢ Deliver the rewards ➢ Accountability of the funds ➢ Follow-up and feedbacks, lessons learned

• NB: Tax and fiscal receipts Concluding….

➢ Crowdfunding as a long "effort" by project proposers, implying the use of marketing and communication skills for catching and retaining the crowd of backers ➢ Starts from the current situation of your company and potential implementation actions ➢ Not ok for all projects….important preliminary analysis of the crowdfundability of the project Challenges and opportunities for the CH sector

• Although the CCS and in particular CH sector are mainly using the traditional types of crowdfunding models and platforms, sometimes these models have limitations

BUT ALSO CROWDFUNDING AS TRIGGER for INNOVATION • New models are emerging bottom-up, stimulated by the « crowdfunding » approach (based on an increased awareness of the need to intervene to preserve cultural heritage • Crowdfunding as a mean to « » new forms of participation, co-preservation, co-ownership and business models for the CH sector The potentialities of crowdfunding: challenges and opportunities innovation and paradigm shift

Crowdfunding campaign for the « Château de la Mothe Chandeniers » (Nouvelle Acquitaine-France) https://mothe-chandeniers.com/en/le-projet/ Crowdfunding campaign “ET SI ON ADOPTAIT LA MOTHE CHANDENIERS » The château de la Mothe-Chandeniers • French Castle located in the Nouvelle Acquitaine region

• Built with several interventions between 13th and 19th century

• Severely damanged in 1932

• In ruins: needs of emergency intervention to save the castle An innovative crowdfunding project

• In 2016, Julien Marquis, founder of « Adopte un château » (non-profit organization) , meets Dantagnans founders and discuss the emergency of the Castle • In 2017, the start-up Dartagnans and the association launched the idea of buying the Château de la Mothe Chandeniers collectively in order to save it and propose a new economic model to preserve the heritage A collective purchase of a monument

• Vision is to raise people awareness about the promotion and preservation of our heritage, too often abandoned.

• Purchasing collectively a monument will necessarily incur: saving a monument in danger, develop an economically viable activity in its territory and create a strong community around it. Our objectives are simple: build, be involved, think and innovate TOGETHER. How does it work?

“Making an abandoned ruin become a collectively restored piece of work is definitely the best way to protect our heritage”

Devenez châtelain pour 50 €!

• Each donor will have the opportunity to make a donation to the project during the crowdfunding campaign

• After the crowdfunding campaign a company will be created (SAS) to purchase the castle with the funds raised through the crowdfunding initiative

• Becoming a shareholder will require a symbolic payment of 1€ per share, which will be asked at the end of the campaign => Each donor with a +1€ contribution could choose to become a shareholder and therefore a co-owner of the fortified castle THE CROWDFUNDING CAMPAIGN

Amount pledged: 500 000 € for purchasing the castle The results

The results of the campaign were more relevant than expected…. THE CROWDFUNDING CAMPAIGN

https://dartagnans.fr/en/ projects/et-si-on- adoptait-un- chateau/campaign How does it work?

• The castle is purchased by a SAS company (Simplified joint-stock company) called CHATEAU DE LA MOTHE- CHANDENIERS SAS

• Each donor will have the opportunity to become a shareholder and therefore a co-owner of the fortified castle. Becoming a shareholder will require a symbolic payment of 1€ per share, which will be asked at the end of the campaign.

• 50€ donné = 1 part = 1 voix, 100€ donnés = 2 parts = 2 voix, etc. CHATEAU DE LA MOTHE-CHANDENIERS SAS

Company created in 2018, legal headquarter in Paris Dartagnans and Adopte un château who developed the project will ensure the management of the company and keep each 10% of the shares

The remaining 80% will be for the donors/shareholders

An online platform created to allow each shareholder to be aware of what is done at the castle (work, events, etc)

The platform will also be used as place where shareholders can vote and give their ideas about the future of the caste. IMPORTANT FEATURES

Clear information, either « emotional » and « technical »: • Technical sheet • Legal information on the benefits/obligations of becoming co-owner • Implementation and constant monitoring of the progresses of the project THE CROWDFUNDING CAMPAIGN

The crowdfunding campaign success factors for the Castle (Ballarini, 2019): • The importance of active engagement also after the campaign: involvement in the governance and decision making, not just supporters or reward • For CH: not traditional equity model, but equity fundraising based on the sense of belonging and purpose • The importance of accountability and transparency in proposing innovative models In conclusion: challenges and opportunities for a paradigm shift? Challenges and opportunities for a paradigm shift • Crowdfunding started as a means to deal with challenges the CCS was experience • source of funding and community building

BUT

• it is currently developing as a means to reflect on innovation paradigm and on the need for a paradigm shift • Crowdfunding as a new approach to the cultural and creative sector, aiming at innovating its business models and bringing bottom-up change of approaches to the governance and management of CCI and CH GROUP WORKS Group works

• Objective: to explore the main features of a crowdfunding campaign • 4 Groups of 4/5 people ➢ Each group should analyze a crowdfunding campaign/project and highlight its main features

Present the results of your analysis to the class GROUP WORKS

1. Choose a crowdfunding platform based on the interests of the majority of the group NB it can be a generalist or specialized platform (Suggested platform: Kickstarter) 2. Choose a project in the sector you prefer and discuss it in the group: ✓Why do you think they have chosen this platform? ✓What are the main features of the project? What type of rewards are offered (if pertinent)? ✓What are the main reasons for success? Use for example the matrix for project evaluation, see the contacts of the campaign’s manager, company, etc. References

• Sources on crowdfunding in Europe: https://eurocrowd.org/

• EthanMollick,The dynamics of crowdfunding:An exploratorystudy,JournalofBusinessVenturing,2013) • Jeff Howe, Theriseofcrowdsourcing,June2006inWired) • Calveri,C.,&Esposito,R.(2013).Crowdfunding World 2013. Report,Analysis&Trend‘. • Oliva,N.(2018).Crowdfunding and Civic Crowdfunding:Theoretical Features and Future Prospects. In Public Management and Administration. Intech Open. • Crowdfunding4culture final report, available at: https://publications.europa.eu/en/publication-detail/- /publication/7e10916d-677c-11e7-b2f2- 01aa75ed71a1/language-en/format-PDF/source-search