Crowdfunding to fetch our T.rex: A lot of coins for a lot of old bones

(Blog for the 13th ISTR conference)

The 13th ISTR conference in 2018 takes place in Amsterdam, The Netherlands. Naturally you want to know a bit more about the Dutch and their country, right! In this blog I take a (short) trip through the prehistoric world and  fast travel towards the present to take a look at a relatively new funding tool in the Netherlands: crowdfunding. I present a successful example of a Dutch crowdfunding project: Trix the T.rex. After which I present several key characteristics of crowdfunding and discuss whether crowdfunding is a usable method for the Dutch third sector. More specifically, I look at crowdfunding possibilities for the Dutch cultural sector (e.g. museums). I end this blog with a presentation of several fun museums in Amsterdam, which  you could visit while you are in the Netherlands.

 

Trix the T.rex: a successful Dutch crowdfunding project

A long time ago in a world far, far away, ‘Trix’ the Tyrannosaurus (T.rex) roomed the earth. She stood twelve meters tall with here five thousand kilos and more than 50 sharp teeth of about 20 centimetres long (Neijens, 2016). Now a day, the tyrannosaurus skeleton Trix travels through Europe thanks to more than 23.000 Dutch donors who collected about 5 million euros. The T.rex is expected to take a permanent place in Naturalis, a Dutch museum of Biodiversity.

The bones are dug up during an expedition in 2013, when a team of researchers found a beautiful skeleton of a female T.rex (lovingly dubbed Trix, a common Dutch pet name), who lived about 66 to 67 million years ago in what I now call Montana, USA. While Naturalis had the ambition to collect all the bones and ship them to the Netherlands, the cost of such an expenditure Ire (too) high. Therefore, the museum started a charitable campaign to assemble money to make their dream come true: a T.rex skeleton in a rare complete condition in their museum.

 

Crowdfunding: transparent, democratic and full of rewards

Fortunately for the museum, many of the Dutch population shared their dream and Ire more than willing to make a (small) donation. The museum decided to launch a crowdfunding campaign and assembled a rather large sum (about 5 million euros). Crowdfunding is an online funding method where a group of individuals donate small amounts (e.g. most donors of the T.rex campaign donated 10 euros) to assemble a large amount.

Crowdfunding applicable as a financial instrument developed in 2006, primarily in the arts and creative-based industries; e.g. music, film and video games (Agrawal, Catalini, & Goldfarb, 2013). One of the first crowdfunding platforms in the world was developed in the Netherlands in 2006, was the music oriented platform Sellaband (Belleflamme, Lambert, &Schwienbacher, 2010). Crowdfunding is an increasingly applied instrument; the reward-based crowdfunding platform Voordekunst hosted 712 projects with a success rate of 81%  and 40.107 donors (Voordekunst, 2016b) contributed a total donation amount of €3.558.549 (Voordekunst, 2016a).

An interesting characteristic of crowdfunding is the transparent nature of the funding tool: beforehand a solicitor has to provide a detailed description of how they will use the donation amount. For instance, the museum had to describe where the T.rex would be displayed. Also, crowdfunding provides the general crowd with a voice and could therefore be described as more democratic than previously used door-to-door campaigns. For instance, if the Dutch did not share the dream of the museum to collect the T.rex bones, than the museum would probably not have been able to complete their project as not enough donors would have made a donation. Moreover, crowdfunding provides donors with (token) rewards of increasing value at several thresholds. For example, if you would have donated 10 euros to the T.rex project you would now be co-owner of a T.rex.

Why is the transparency of crowdfunding important?

An important worldwide development also present in the Netherlands is the increasing higher educated attainment (Eurostat, 2016). Not surprisingly, donors no longer give solely out of the goodness of their hearts. Instead, practical experts observe a movement they termed effective altruism: the Dutch still want to make a donation and can be described as generous, but they are more critical about the effect of their donation and prefer to ensure their donation has a high social return (Broodman&Peerdeman, 2017). Thus, non-profits have to be more transparent, so a donor can decide if their donation will have the desired impact, if they want to attract donors. Bekkers (2017) advices non-profits to involve their donors in conversations and let the donors lead non-profits in deciding which projects to start: it might be time to ask the donor what they want.

Why is the democratic factor in crowdfunding important?

The increasing need of transparency is not only noticeable before a donation is made but also after. Practical experts describe this as a shift from ‘giver’ towards ‘contributor’ (Broodman&Peerdeman, 2017). More than ever, individuals want to do more than opening their wallets and making a donation, they want to be included and expect some form of a lasting relationship after the donation is made. Contrary to making a donation without any further updates or contact. Through this lasting relationship between the donor and the non-profit organization, the donor tries to ensure that the non-profit organization achieves the intended goal. Thus, in connection with the increasing effective altruism, donors expect a different kind of relationship than earlier. They want to be included instead of only solicited. In sum, donors are more critical and conscious about the effect of their donation and expect non-profits to be more open both before and after receiving the donation.

 More about crowdfunding for the Dutch cultural sector in the following blog. 

 

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