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Crowdfunding Has Consequences

posted Oct 16, 2014, 12:54 AM by J Shaw   [ updated Oct 16, 2014, 12:57 AM ]
Over two weeks this past summer, the ALS Ice Bucket Challenge poured millions of gallons of frigid water over people’s heads and millions of dollars into the ALS Association’s coffers. (“Coffers”: one of those words used only in writing, never in conversation.) The combination gag phenomenon/act of charity caused a social media tsunami and quadrupled the foundation’s usual fund-raising take, drawing 70,000 new donors to the cause.

I thought about the Ice Bucket Challenge when I read in the New York Times about the “Table of Peace,” a nifty little jewel-bedecked item of 18th-century French furniture  that made a guest appearance in Marcel Proust’s Swann’s Way. (Fancy!) The table was in the Times because it’s the latest item the august Louvre is attempting to buy through crowdfunding. Turns out the French government has had to downsize financial support for cultural institutions for two years straight, so the museum launched a campaign to raise a million euros of the $12.5 million euro price tag set by the current owners, the family of the Baron de Breteuil, from the people. (Let them eat cake off of that, amirite?)




I’m sorry that governments don’t have enough cash to support places like the Louvre, not to mention the School District of Philadelphia, where Girls High AP history teacher Mark Hoey recently resorted to crowdfunding textbooks for his class. But I also see the practicality of a system that allows us each to target the causes we care about and direct donations to them, rather than tossing our taxes into a giant pot that then supports dubious enterprises like opera. (Oh, shut up; opera is terrible — and expensive, too.) In fact, you can think of crowdfunding as analogous to restaurant reviewing or music criticism, in that it democratizes a process that historically has been the purlieu of the one percent, with their deep pockets and questionable taste.

So the Louvre wants a table. Mark Hoey wants his students to have textbooks. Maybe you prefer to put your hard-earned dollars toward spud entrepreneur Zack Brown’s famed potato salad party, or the $50,000 fine the NCAA levied (another writing-only word!) on Ole Miss after its football fans stormed the field and tore down the goalposts when their team beat Alabama last week, or a nice hot lunch for the Trinidad and Tobago women’s national soccer team, all of which have been crowdfunded successfully (and in some cases, wildly successfully) of late.

Crowdfunding is new! Crowdfunding is cool! Crowdfunding is empowering! But when you come right down to it, crowdfunding isn’t any different from old-fashioned charitable giving, except that your donations aren’t tax-deductible unless you’re bestowing them on an officially recognized charitable entity — just something to keep in mind as the Chronicle of Philanthropy reports that Philadelphians gave 10.3 percent less of their income to charity in 2012 than they did in 2006 — the nation’s second-biggest drop. You’ve got to wonder how much of that drop is caused by our funding of whimsical Kickstarter campaigns like the ones for Grilled Cheesus, I Know Where Your Cat Lives and the United Steaks, a map of America with each state consisting of a “tasty slab of meat.” I’m all for whimsicality, but kids are still going hungry and dying of Ebola, you know?

Not to mention that the tax rules governing those who collect funds on Kickstarter are pretty byzantine, even by tax-code standards.  Some people — like the Louvre and the ALS Association — could make out like bandits in this brave new world. The rest of us may have to hold the mayo. The Tax Foundation calculated that Zack Brown owes $21,000 in taxes for that potato salad.

Posted from : http://www.phillymag.com/news/2014/10/14/crowdfunding-isnt-solve-worlds-problems/