The Arts Foundation is building a crowdfunding website that it predicts will raise millions every year upon its launch in September, with a charitable twist.
The site, boosted.org.nz, will accept submissions from projects for listing. Much like on leading US crowdfunding site kickstarter.com, projects will have a profile page featuring an explanation, promo video, and funding goal. Donors can pledge at different levels.
All pledges are made to the Arts Foundation and if the project meets its funding goal, the organisation will convert the pledge to a donation and will grant an amount equivalent to all the donations received for the project, less an administration fee (a spokesperson said this would be no more than 10 percent, although the amount is yet to be finalised. Kickstarter takes a 5 percent cut, plus any credit card fees of up to 5 percent).
The donor gets a receipt from the Arts Foundation and can use this to get a tax deduction or tax credit. The Arts Foundation says it has received a non-binding ruling from the IRD confirming donations to pre-approved projects on Boosted will be treated as charitable donations to the foundation.
If the project fails to reach its funding goal, pledges will not be converted to donations, except for the administration fee. A receipt will be issued to the donor for the administration fee only.
One thing Boosted won't have is the ability for projects to offer rewards in return for pledges, in order to protect the charitable status of donations.
However, projects on Pledgeme, our local equivalent of Kickstarter for creative endeavours, do allow for that feature, for those who prefer something tangible as a souvenir rather than a tax break.
The Lion Foundation has issued a grant for Boosted, which will accept all kinds of creative projects, including music, dance, theatre, moving image, visual arts, literature, cultural and others, of all sizes.
“We are pouring our knowledge of private giving into Boosted in order to grow a new generation of donors for the arts," said Arts Foundation executive director Simon Bowden.
"We expect to create literally thousands of philanthropists for the arts, albeit mostly at modest levels. In the world of crowdfunding every dollar counts. We believe that many donors who initially give small amounts to projects on Boosted will be able to give more in the future."
In a statement, the foundation said New Zealanders compare favourably with other nations for donating to charitable causes. However, New Zealand does not have the wealth of countries such as the US - famous for multi-million dollar gifts to the arts.
Bowden first learned of crowdfunding while on a US government-funded programme in August 2010. He met with United States Artists in Los Angeles, one of the only other agencies to create an arts crowdfunding website that offers tax deduction to donors. A recent article in the New York Times compared the success rate of projects being funded on its site USA Projects of 75 percent with 44 percent on Kickstarter, citing tax deduction as the likely reason.
Taika Waititi, who raised more than $100,000 to launch Boy in the US with help from Kickstarter, said: "The arts need all the support they can get, so it's great news that the Arts Foundation is building a purpose built crowdfunding site for New Zealand."
Kickstarter estimates it will raise US$150 million for projects this year.
According to Bowden: "Crowdfunding is a revolution. It is about empowering artists to inspire people to join their endeavours."
He said the most exciting outcome of crowdfunding is its potential to create cultural change.
"Artists who are successful in using crowdfunding will have new encouragement to articulate their vision based on their personal aspirations. Audiences will have a new means of participating in the arts as investors in the creative process."