Personal Blog of Joe Brewer

Why Crowdfunding Isn’t Really About Money

In Collaboration, Wisdom of Crowds on March 29, 2011 at 6:36 pm

We are in the midst of a revolution where self-organized crowds have begun to displace entrenched powers as the primary driver of social change in the world.  At the heart of this revolution is the capacity for people to easily find like-minded peers and collaborate using social media tools.  Crowdfunding has grown in popularity as a way for artists and entrepreneurs to directly engage their fans and invite them to help make their projects a success.  The most visible element in this process is the money that changes hands.  Yet, there are much more interesting (and potentially transformative) things going on that warrant special attention.

What is Crowdfunding?

Crowdfunding is a community-engagement process between an individual or organization seeking money to create something new and a crowd of supporters who want to participate in the effort in a meaningful way.  It is primarily about open collaboration among the participants that takes the form of

  1. An Invitation to Make A Successful Project; followed by
  2. A Campaign to Engage More People in the Effort; and culminating in
  3. A Celebration of What Everyone Has Created Together.

Note how none of these steps is really about money.  Yes, there must be money pledged by fans.  And the amount of money raised needs to be sufficient for achieving the goals set out initially by the project’s host.  But the central action centers around meaningful engagement that empowers the crowd to create something new.  This is why crowdfunding has so much potential for “game changers” in the arena of social movements.  It is a fundamentally empowering process that engages people in meaningful action.

Not bad for a process that also generates revenue for cool projects, eh?

  1. Dear Joe, Again, as usual, you have summed up with a simple frame, i.e. “crowdfunding,” what our democracy needs. And to paraphrase Martin Luther King, Jr., it’s about the “urgency of NOW.” Keep up the great work.

  2. Hi Chuck,

    Thanks for the nudge. I’m totally there with you that we’ve got to be fierce about the urgency of now! It’s all about accelerating the pace of progressive change in a world that desperately needs it.

  3. Thanks, Joe! One could go so far as to say that what’s fundamentally being asked of us is to come together in collaboration so that we can know ourselves as whole. And then there’s Kahlil Gibran’s famous quite that “work is love made visible.”

    From my perspective, money flow is just one form of appreciation and exchange. Of course, money flow matters a lot in our civilization, but may matter less as social transformation proceeds. Onward!

  4. Hey Jeff,

    Absolutely! We can all benefit from more feelings of love and appreciation. And crowd-based approaches to fundraising help make appreciation much more explicit in the exchange. It just feels good!

  5. Brilliant post, Joe! Engaging people in the process, and bringing the crowd together behind a common purpose is unbelievably powerful. Though “crowdfunding” is still new, we’ve already seen such amazing adoption, be it in the creative space with Kickstarter, or the social good space with sites like Loudsauce, 33Needs, and (shameless plug) our own site, StartSomeGood.com! I’ll definitely be sharing this link with others 🙂

  6. Alex,

    I LOVE what you guys are doing with StartSomeGood.com! The next generation of crowdfunding platforms must go beyond individual projects and provide ongoing support for entrepreneurial endeavors… so your work on crowd-based support for social enterprises is part of the next wave.

    Keep it rocking!

  7. […] Brewer from “Chaotic Ripple” states that “crowd funding is a community-engagement process between an individual or […]

  8. […] explanation of Why Crowdfunding Isn’t Really About Money that makes clear how the crowd can be engaged to create new […]

  9. Very interesting.
    We run a swedish crowdfunding site and the catchphrase I use a lot is that the money received by crowdfunding is just the positive side-effect.
    Fans can stay in touch and follow their favourite band, and you can use your backers as engines and ambassadeurs for your project.
    Check out http://www.fundedbyme.com It’s global from day one and you as a project owner define your own minimum goal.
    /Daniel Daboczy, founder

  10. Joe,

    How would you prefer we propagate your blog? This stuff needs to get out there into the socnets and twitterverse, etc.

    Thanks for the succinct definition.

    – rafa

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