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IsCrowdfundingCharity

IS CROWDFUNDING CHARITY?

The article below was published (in Greek) in the online magazine Hit&Run.gr

Crowdfunding is -according to Wikipedia- “the practice of funding a project or venture by raising monetary contributions from a large number of people, today often performed via internet-mediated registries, but the concept can also be executed through mail-order subscriptions, benefit events, and other methods”. Both Crowdfunding and Peer to Peer (P2P) funding (though they differentiate in some ways), come under the generic term “alternative finance”, which describes finance that comes from sources alternative to the traditional places (banks and venture capital trusts, for example).

“The crowdfunding model is based on three types of actors: the project initiator who proposes the idea and/or project to be funded; individuals or groups who support the idea; and a moderating organization (the “platform”) that brings the parties together to launch the idea”. These new ways of obtaining finance are considered -especially from the institutional subsidizers- to be “disruptive” in the sense that they are disrupting (for the good) the funding market. They offer to that region and to those who need it a different range of options and, in many cases, funding they wouldn’t get from traditional sources. Furthermore, the variation in contribution options includes also participation in services such as translations, co-productions, dissemination and sharing the idea and the campaign for it, thus creating a sense of community and of “belonging”. Crowdfunding practices have, at times, been subjected to criticism, especially in cases of projects and ideas with movement characteristics, on the bases of displacing more engaged forms of activism. A critical approach that needs deeper analysis: one that would take into account contemporary dynamics concerning the “economy of the movements” and the general tendency of centralization of accumulation of capitals and of their distribution systems.

Crowdfunging, as a practice, first appeared early in the past decade in the USA, mostly as a tool to fund innovative ideas and backing venture models to address growth and humanitarian issues of the so called “third world”. In 2013, according to data cited in Wikipedia, the crowdfunding “industry” raised over $5.1 billion worldwide. Given its genesis as a means of raising funds for concerts and art productions, many people think of crowdfunding as an inherently philanthropic act. But one of the more significant elements of these platforms is that, while they aggregate individual financial contributions, they also commingle different kinds of financial actions. What one person may see as a charitable donation to support a musical performance, another might assume is a ticket purchase. Because the sites offer incentives at different contribution sizes, and because many people pay less than the actual price of the item, it is unclear whether they are making a charitable contribution and getting a sticker or simply purchasing a sticker instead of a ticket. While tax deductibility may be a signal to some contributors that their money is “charitable,” others contribute simply because they want the event to happen or the record to get made, they’re just supporting the creation and public activity.

The confusion around crowdfunding, even in cases that concern assertion of social endeavors for the commons exists also in Greece in times of recession and of capital controls.

Personal Cinema team begun a crowdfunding campaign on October 17th, on the Spanish platform goteo.org, for the production and dissemination of a documentary film about Wireless Community Networks in the area of Sarantaporo and the 15 villages currently connected to the network. Goteo.org is a community under the legal form of an NGO, based in Barcelona and aiming to act as a mediator and generate resources through crowdfunding as well as institutional actors -e.g. the European Cultural Foundation- for projects related to Commons (either digital or material).

They describe their presence in the internet as “a more ethical and collaborative Internet where citizens take an active role in improving and advancing their communities in economic, environmental, educational, political, social and/or cultural terms, through cooperative processes. A society where value is protected and the recognition of common goods, guarantors of fundamental rights is expanded. Our tools, such as Goteo, mobilize economic resources and human partnerships; contribute to community building; disseminate and create awareness and commitment around civic causes. They enable large scale collaboration among equals; establish connections and support among businesses, universities and citizens; and promote openness of information and knowledge to enable logics of transparency and cooperation instead opacity and competition.”

The documentary film “Building Communities of Commons” by the PC collective, engages in research, documentation and dissemination of the initiative to deploy the Sarantaporo Wireless Community Network, as well as in tracking the history of internet accessibility in an area of Greece that is considered remote and where access -if any- is difficult; something that bared grave consequences on local population. For example, non access to the internet made impossible for visiting rural doctors to make online prescriptions. The film also documents the efforts of locals to form productive and processing cooperatives based on the experiences drawn from building a community around the wireless network of sarantaporo.gr.

Obviously, it’s clear that both the Sarantaporo Wireless Network, as well as the film that documents the whole process, constitute social initiatives involving social groups in an effort to reconstruct their social fabric as well as develop tools to (re)enliven their productive economy. Initiatives based on self-organisation, collaboration and on funding by a crowd that shares these common values. The implementation of capital controls in Greece is already a form of state of exception within the Finance framework. Until the beginnings of October, money transfer abroad via e-banking actions is prohibited, even though there are few exceptions. But in the partial lift of the controls for sums up to 500€ per month concerning electronic transnational banking transactions, crowdfunding remains an exception (or even, an exception to the exception). The reason being that it is labeled as “charity”, therefore it is -together with jewelry purchasing, online videogame subscriptions and online betting on foreign sites- blocked. In other words, raising funds by the many for social issues that concern them in Greece of capital controls, is considered a “matter of philanthropy” and the immediate and common use of credit or debit cards is blocked. Strangely enough though, the inter-mediation of the multinational online paying service Paypal is not blocked. Via this service, the prohibition is bypassed and the transaction is doable. But at the same time this implication negates equal access of the citizen to back and, in the end, to channel resources in the way he/she judges fitting, contributing in ideas he/she wishes to see realized in public. At the same time, it shows the limits of the modeling of online tools that act as mediators aiming to allow for the emergence of practices based on transparency.

To a possible further extent of the definition of crowdfunding the many, one could conclude that: philanthropic act is a shady act. But the question raised is: is crowdfunding charity?