Do you want to know more about crowdfunding and the advantages of crowdfunding? Read the ‘Crowdfunding to fetch our T.Rex’ blog. For a quick overview of crowdfunding: https://www.youtube.com/watch?v=iSFc2kfYKS0
Crowdfunding for the cultural sector in the Netherlands
In the Netherlands it is not uncommon or new for the cultural sector to turn towards philanthropy as a method of financial survival. Financial aid in the form of donations for the cultural sector can be traced back as far as the Golden Age, when a group called the Maecenas started to financially support cultural institutions and individual artists (Bekkers & Wiepking, 2016).
After the financial crisis of 2008, the Dutch economy faced important challenges. The Dutch economy experienced a decline and the government was forced to decrease their spending. Especially contemporary cultural organizations (i.e. the cultural sector) experience financial struggles, as the cultural sector mainly depended on government subsidies which was severely decreased (Franssen& Bekkers, 2016).
However, the increasing pressure on philanthropic sources might not be ideal for the cultural sector. Most Dutch individuals (93%) judge the cultural sector as an unimportant goal for the general public (Schuyt, Gouwenberg, & Bekkers, 2017). Not surprisingly, the cultural sector receives few donations (12% of the Dutch households donate to cultural projects)(Schuyt, Gouwenberg, & Bekkers, 2017). In an attempt to fill the financial gap, the government encouraged an increased support from the third sector. For example, to stimulate donations to cultural projects, the Dutch government multiplied donations made to cultural institutions. However, this strategy did not result in more donations (Bekkers, Mariani&Franssen, 2015).
Crowdfunding as the next step?
I think that crowdfunding is a logical next step for the non-profit sector. It is in accordance with the decreasing government funding, since crowdfunding is relatively cheap while still reaching a large crowd. Also, it might attract new donors who are no longer interested in some of the older solicitation methods, since donors are becoming more critically about the return of their donation and crowdfunding provides them with detailed information they can use judge whether they think this project would be effective (i.e. transparency). Also, crowdfunding connects with the current lifestyle of donors, since it is an online solicitation method and most individuals spent daily time online.
A critical note: crowdfunding has a moderate impact
The impact of crowdfunding in charity is relatively small; in 2011 only nine per cent of the Dutch population contributed online to charity organizations (Schuyt, Gouwenberg, & Bekkers, 2013). Amounts raised through crowdfunding increase, but they account for less than 1% of giving in the Netherlands.
Disclaimer: I do not claim that crowdfunding will solve all the problems of the third sector. I merely describe how crowdfunding as a new funding tool could help to increase the reach of charitable organizations. Also, I argue for the use of crowdfunding, as it fits the need of both charities and donors.