Crowdfunding to Build Financial Capital

This post was contributed by Sarah Misyak, a graduate student at Virginia Tech and a member of the AFP management team.

This week’s post is exploring another creative way to grow a food systems-related business, following last week’s post on Etsy and the Etsy + Kiva partnership.  Crowdsourcing and crowdfunding are both good options.

According to crowdsourcing.org, a free website whose “mission is to serve as an invaluable source of information to analysts, researchers, journalists, investors, business owners, crowdsourcing experts and participants in crowdsourcing and crowdfunding platforms,” crowdsourcing is the act of outsourcing tasks to a community through an open invitation.  This is different from traditional outsourcing in that it is an open call to a large group of people, usually via the internet instead of to a specific company or consultant.  Crowdsourcing may be an especially great resource for non-profits looking to divide up tasks among a large group of volunteers.

Crowdsourcing.org describes crowdfunding as a way for non-profit and for-profit organizations to raise financial capital for new projects and/or businesses by soliciting a large group of stakeholders for donations or sponsorship, loans or investments.  One of the largest and most popular crowdfunding platforms is Kickstarter.

Kickstarter is a platform for raising funds for a specific project, meaning that the funds must be raised for something with a clear end from which something will be produced.  The projects must fall under one of the following categories: art, comics, dance design, fashion, film, food, games, music, photography, publishing, technology, and theater.  To see a list of what is not allowed on Kickstarter, click here.

If you choose to launch a project on Kickstarter you set a funding goal and a deadline for meeting that goal.  People can then view that project and decide whether or not to contribute.  Project creators usually offer some sort of reward or incentive for funding.  An example of this would be if you are trying to raise funds to create a film about your work, you would offer funders a copy of that film.  One of the benefits of this type of funding is that you remain entirely in creative control of your project.

A caveat about using Kickstarter is that partial funding is not an option, meaning that if the funding goal is not met then you will not receive any funds for your project.  A couple examples of successfully funded projects are Windowfarms: Vertical Food Gardens and a small, family-run farmstead cheese operation who successfully raised over $23,000 to purchase an energy-efficient geothermal cave in Essex County, MA for aging their cheeses.  Click here to explore the food section of Kickstarter.

Do you have a project that may be appropriate for Kickstarter?  Leave a comment here to share about it.

Sarah Misyak is a graduate student in the Department of Human Nutrition, Foods & Exercise at Virginia Tech.  Her research is focused on barriers to local food access for low-income populations and the impact of the local foods on diet quality.