An observation I’ve made recently is the rise in film projects on crowdfunding platforms like IndieGoGo that take the ‘flexible funding approach’. The idea behind this is that whether the project makes the target or not, the project’s team get to keep whatever is pledged. This is different to the ‘all or nothing’ approach whereby people pledge an amount, but their cards are only charged if you reach 100% of your goal (or in the instance of Seed & Spark, 80% of your goal).
If you’ve never committed to a crowdfunding project before, the flexible funding model might seem like a really tempting thing to do. You are asking for money after all, and if you’re like me, the thought of asking it from strangers can be quite confronting. I have done it myself. After failing at an all-or-nothing approach, I was too scared to try it again for a second round of funding, instead going for the softer “we’ll make the film regardless of what we raise” approach.
But here’s why you might be doing yourself a disservice if you choose to run that campaign without the hard target of a fixed funding approach.
One of the first things that potential backers and contributors will see, aside from your awesome pitch video, is the total amount that your are seeking for funding, as well as whether your project has a flexible funding or fixed funding model.
Removing the importance of needing to reach all of your goal, otherwise your film won’t be made, can reduce the importance of someone needing to contribute at all. Think about it. Whilst you can (and should) build up trust and a relationship with an audience before you launch your crowdfunding campaign, having an audience does not guarantee that they will pledge. They need everything about the project to compel them to do, so not only does your campaign need to be a slick, well oiled machine surrounding an original and great concept, but it needs to be stated that it can only happen if they contribute there and now.
‘You can make the project of your dreams. It’s going to be hard work raising money, but if you can keep plugging away at sharing your project, interacting with those interested, and doing all you can to keep everyone up to date and engaged, then you can go ahead with your project. If you fall one cent short of your target however, you’ll get nothing. So get to work!’
Sounds convincing, and that is exactly how the fixed funding model works. You have to hustle your arse off to get the result you are after, otherwise it’s all for nothing.
The flexible funding model is kind of like this:
‘You can make the project of your dreams. You can work on its promotion whenever you want, asking friends & family to contribute is definitely a good start. Since you’re making your project anyway (it is your dream after all, so you’ll make it budget be damned), why not use the time you could spend on social media promoting your project, and make sure that your shot lists are solid.
Which do you feel is the better way to make sure that you are working as hard as you can before your time runs out?
You have an overall budget for production and if you are crowd-funding correctly, you also have an accurate budget to fulfil the cost requirements of your pledge rewards. So if you don’t meet your target, but keep what you raise, where is the rest of your budget going to come from? If you know the answer to that question, then why are you seeking crowdfunding for your film in the first place?
If instead you say that you’ll make the film for a lower amount because you haven’t reached your goal, then again you may hit a barrier with potential backers who will ask why you’re after the amount you’re after, if you could make it for a lower amount anyway!
More often than not, you will also have to pay higher fees to the crowdfunding platform, which again impacts the total amount you take to use on your project.
Ultimately, the success of your project relies on far more important factors than whether you tick the fixed funding all-or-nothing, or the flexible ‘keep what you get’ funding. There are actually projects that probably could benefit using flexible funding. Non-profits, or projects that don’t have physical or digital perks may find this funding method more successful, and there are film projects that are reaching their target with flexible funding.
The numbers though are vastly different. The success rate for fixed funding versus flexible funding shown in this research paper is 34% versus 17%. The average number of backers is also much higher on a fixed campaign, with 188 vs 73.
So next time you put together a campaign for your film project, make sure you’ve weighed up the pros and cons of both funding methods. For me the ‘all-or-nothing’ approach, even though it could bring in nothing if it fails, is a far more exciting prospect to tackle. Back to the brief mention of my flexible funding project, ‘The Re-Living’ was placed on IndieGoGo in 2010. Sadly (or maybe thankfully), the project is no longer viewable, but needless to say, I got nowhere near my target.
Finally, you may note that I named a specific platform up topside, Seed & Spark. I’ve never run a campaign on their platform, but without a doubt it will be the only one I use. They have a higher record of success rate for filmmakers, a huge part of which can be attributed to the fact that they help filmmakers nurture and fine-tune their crowdfunding campaign until it’s ready to go. They also will ‘green light’ your project, if you reach 80% of your goal. This means that if you get 80% there, they will take pledge amounts even though you still may not reach target. I like this idea, even though I said why make the film for the amount you are seeking if you can make it for less than that, Seed & Spark believe that if you can reach 80% of your goal, you can make the film pretty close to your original vision and budget.
What are your thoughts? Have you used flexible funding crowdfunding before? What were your experiences like? I’d love to hear in the comments below! – Nick