Millions for the arts
With the support of the Lion Foundation, the Arts Foundation is building a website that it predicts will raise millions in new funds for the arts every year. The site, www.boosted.org.nz, is the first new major initiative to fund the arts in decades.
Boosted will use a crowdfunding form of fundraising. This phenomenon, for funding creative projects, has been developing in the United States over the past four years. Crowdfunding websites enable projects to receive many, often small, private donations towards a funding goal. The projects are promoted using e-mail and social media networks.
The leading crowdfunding website in the United States, kickstarter.com, estimates it will raise USD$150million for projects this year, that’s $6 million more than will be distributed by US Government Funding agency; the United States National Endowment for the Arts. Kickstarter is one of many crowdfunding sites in the United States and was recently used by New Zealand film maker Taika Waititi to raise over $100,000 to distribute his film Boy in the USA.
The Arts Foundation, whose Principal Partner is Macquarie Private Wealth New Zealand, launched in 2000 as a vehicle for growing private giving to the arts. The Foundation has an endowment of $6 million and is expecting legacies of $15 million. It is two years short of donating $5million to the arts. The Arts Foundation produces the annual Macquarie Private Wealth New Zealand Arts Awards where it distributes around $400,000 to artists through awards such as its $50,000 Laureate Award.
“The Arts Foundation is opening its doors to all arts projects, from the grass roots to New Zealand’s most established companies and artists”, said Arts Foundation Executive Director Simon Bowden. “We are pouring our knowledge of private giving into Boosted in order to grow a new generation of donors for the arts. 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”.
Any arts project can go through the simple steps of applying to the Arts Foundation to be listed on Boosted. Donations for projects on Boosted are made to the Arts Foundation and will be tax deductible. If the project attracts enough pledges to meet its target by a deadline, the Arts Foundation will grant funds donated for the project to the project, less an administration amount. The administration amount helps with running the website. Boosted will have other philanthropic mechanisms such as the ability to run a matched funding campaign. Matched funding is where a donor pledges a sum of funds that will only be donated if others match the amount pledged.
Simon Bowden first learned of crowdfunding while on a United States Government-funded International Visitor Leadership programme in America 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 the United States Artists site of 75% with 44% on Kickstarter, sighting tax deduction as the likely reason for United States Artists’ success. “The tax deductible status of donations to projects on Boosted will improve the confidence of donors and may encourage them to give more”, said Simon Bowden.
“Perhaps 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. Crowdfunding is a revolution. It is about empowering artists to inspire people to join their endeavours” said Simon Bowden.
How will it work?
- Artists, arts groups and organisations (artists) will submit a project for pre-approval to the Arts Foundation. Considered on a case-by-case basis, the Arts Foundation will approve all legitimate arts project through a simple and quick process;
- A profile page for the approved project will include an explanation of the project, a promotional video and a funding goal;
- To create momentum, projects will have a set period of time to attract pledges;
- Advocates for the project will promote it using e-mail and social media;
- Donors pledge to the project at different levels;
- All pledges are made to the Arts Foundation for a pre-approved project. If the project meets its funding goal, the Arts Foundation 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;
- The donor gets a receipt from the Arts Foundation and is able to use this to get a tax deduction or tax credit;
- If the project fails to reach its funding goal, the funds will be returned.
Why will it work?
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 United States - famous for multi-million dollar gifts to the arts. Crowdfunding provides arts projects a means of access to the generosity of New Zealanders at a level non-disruptive to donors’ affluence.
The Arts Foundation has supported some of New Zealand’s most significant artists and has a reputation for growing philanthropic support for the arts. The Foundation’s reputation, knowledge about philanthropy and its ability to offer a tax deduction to donors will secure confidence in projects listed on Boosted.
The government has advised the arts sector that, while there will not be a reduction in funding for the arts, growth needs to be funded by the private sector. Philanthropic donations are suggested as a new source of funding for the arts. Donations to registered charities, with donee status from the IRD, receive a 33% rebate. This means a donation of $100 costs the donor $67. Boosted enables arts projects that meet the terms and conditions of the Arts Foundation’s Deed of Trust to receive donations that are tax deductible. Without Boosted, many arts projects would not be able to attract tax effective donations.
Any legitimate arts project can be listed on Boosted. This includes music, dance, theatre, moving image, visual arts, literature, cultural etc. Some projects will seek relatively low amounts ($500 plus), some will seek over $100,000.
"We couldn't have launched Boy in the US without the support of the many people that responded to our crowd funding campaign. It's a great way to raise funds for creative projects. The arts need all the support they can get, so its great news that the Arts Foundation is building a purpose built crowdfunding site for New Zealand". Taika Waititi, Artist, Film maker and Arts Foundation New Generation Award recipient.