Kickstarting an Ethical Debate

Mass Collaboration. Open Innovation. Community Production. Mass Solutions. Constituent Driven Innovation. Connected Intelligence. Collective Wisdom. Intelligent Networks. Human Networks.

What do all these words and phrases have in common? They are all synonyms for crowdsourcing. So what is crowdsourcing?

According to CrowdSourcing.org, “Crowdsourcing is the act of outsourcing tasks, traditionally performed by an employee or contractor, to a large group of people or community (a crowd), through an open invite (call). Crowdsourcing is typically enabled through online communities consisting of members with common skills or interests and is applied as a model that enables individuals and groups to innovate, create, produce, report, predict, collaborate, fund and to engage customers”.

Crowdsourcing is sometimes confused with crowdfunding.

Crowdfunding is “Financial contributions from online investors, sponsors or donors to fund for-profit or non-profit initiatives or enterprises. Crowdfunding is an approach to raising capital for new projects and businesses by soliciting contributions from a large number of stakeholders following three types of crowdfunding models: (1) Donations, Philanthropy and Sponsorship where there is no expected financial return, (2) Lending and (3) Investment in exchange for equity, profit or revenue sharing”.

There are two basic crowdfunding models:

1. Equity Crowdfunding. This type of crowdfunding does allow people to become shareholders in a company. Companies sell ownership stakes online the form of equity or debt.
2. Rewards-Based Crowdfunding. This older model is where people can pre-purchase products, buy experiences, or simply donate. While the funds raised from this type of model may go to helping a business or a project, funders are not allowed to invest and become shareholders.

Kickstarter

Kickstarter is a leading rewards-based crowdfunding site that funds creative projects. According to the company “We’re a home for films, games, and music to art, design, and technology.”

Seems like a good idea, but there was a bit of controversy when the actor (and write/director/producer) Zach Braff used the site to help fund his recent film “Wish I Was Here”. In a self-made promotional video, Braff stated that he could find conventional financiers to cover the costs of the film, but in doing so here would lose creative control over the script, the casting decisions and the finished product. So in order to keep complete creative control over the film, Braff launched a campaign on Kickstarter to raise 2 million dollars. It took just three days to reach this goal. He actually ended up with over 3 million from more than 40,000 backers. 

This upset some people who questioned the ethics of the campaign. As an actor on the TV show “Scrubs” Braff reportedly earned $350,000 per episode, so one could assume he could fund the film himself with no problem. The thing about Kickstarter, however, is that it is not an intrusive technology. Braff didn’t harass anyone for the money; people wanted to give it to him. Kickstarter is also not a charity. The amount of money in Braff’s bank account is irrelevant (although about half of the film’s $6 million budget did come from him). If he sought out a studio or philanthropic hedge-fund manager for the financial backing, nobody would question the ethical merits of that request.

So what do you think? Is it ethical? Should this type of fundraising be left only to those who have no other means of financing projects, or should it be open to everyone equally? Personally I am a big fan of Zach Braff and his artistic endeavors, and I think this was a smart way to bring in interest for a project for which he felt very passionately.