Last week, I received a message from a Facebook friend asking for money. He is a performance artist. I had to look him up. I had no idea we were even Facebook friends. He said he was writing to all his Facebook friends to let them know about his forthcoming art show. It’s the biggest show he’s ever done and the printing and framing of the art will take $2,500. He wrote that if even 50% of his Facebook friends donated $5 each, he would have enough money to put on his show.
I’m a supporter of the arts and education. I go to local shows and buy art and support my local theater. I even volunteer at my kid’s school. But these kinds of requests are landing in my Inbox more frequently. Somebody either wants to put on a play, get a Ph.D. or invent a gadget that will make my life easier. Hey, I’d love to get a Ph.D. in engineering, but when did asking friends and strangers for money become so commonplace? Is there a difference between crowdfunding and panhandling?
Daniel in Williamstown, Mass.
The former tends to be more artfully done than the latter and the latter refers to someone who asks for money on the street, so I’m not sure that asking for money online for art could even loosely be referred to as panhandling. I don’t like the word, even though it’s pretty tame compared with some other words. But even with the offer of a free T-shirt, a ticket into the long-awaited art exhibition or fridge magnet for trusting contributors, I do agree that there’s a bit of a shakedown involved in both.
We can’t always know what happens to our money when we give it away. I remember a friend once gave $5 to a woman who said she needed money for a shelter. A few minutes later we ran into the same woman buying two packets of cigarettes in a store. Who knows? Maybe she suddenly had a surplus. My friend didn’t appear to mind too much. She knew that once she gave the money away, whether or not it would be used for the purpose intended was (quite literally) out of her hands.
Some crowdfunding campaigns are also suspect. Take the curious incident of Steve Tan who wanted to make a waterproof, voice-activated smartwatch. He asked for $100,000 on Indiegogo, and received $1.5 million, yet many of those who got a watch said it didn’t even keep the correct time. The inventor allegedly posted photos of himself on Facebook with a new red Ferrari and shopping bags from designer stores. (The fundraiser said those photos were taken prior to the campaign and he didn’t own the Ferrari. “I never used a single cent of the money I crowdfunded from Indiegogo for my personal use or gain,” he wrote in a post to disgruntled donors.)
And even campaigns that are legitimate may require pause for thought. This Kickstarter campaign raised $478,080 for a “Back to the Future” style hoverboard, even though it had a goal of just $250,000 (and it remains to be seen whether the makers can make one that will actually fly like Marty McFly). Kickstarter supporters pledged $15,380, more than the $15,000 target, so Aaron Beam, who was convicted in the HealthSouth bank fraud case, could publish a book about ethics.
Crowdfunding sites like Kickstarter and Indiegogo have rules. Kickstarter only allows projects that are creative. “You can’t fund your honeymoon or expense your college tuition,” a spokesman says. “We do not evaluate projects. It’s between the backers and the creators.” Neither site allows people to raise money for illegal activities. Kickstarter says projects must be honest, while Indiegogo says users are not allowed to use the site for scams. But you may not be able to tell until it’s too late.
If you don’t want to give $5 to this Facebook stranger’s art project, why not give a fiver to a homeless person in need of a hot meal. Alternatively, registered charities are held accountable and sites like Charity Navigator evaluate them based on effectiveness and transparency. You could also attend a holiday market to support local talent or — with the smartwatch brouhaha fresh in our minds — give something more valuable. After all, soup kitchens would not exist without people who so generously give of their time.
Posted from : http://www.marketwatch.com/story/whats-the-difference-between-crowdfunding-and-panhandling-2014-11-24?link=MW_latest_news