But it was only when I visited Lady Liberty for the first time recently that I discovered something else she represents: an early example of crowdfunding. A display in the museum on Liberty Island describes how, in 1885,
That is exactly the kind of endeavor crowdfunding should finance: a project for the benefit of a larger community that wouldn't be possible without a group financial effort. But today, some crowdfunding is taking a narcissistic turn.
According to the Crowdfunding Industry Report, about $2.7 billion was raised by crowdfunding in 2012, and that amount was expected to rise sharply in 2013. Some crowdfunding websites have strict rules for what kinds of projects are eligible.
GoFundMe encourages its users "to raise money for themselves, a friend or loved one during life's important moments." And in November, the website Bucquistador was launched for individuals to fundraise for their "bucket lists" — the things they'd like to do before they die. As the website puts it: "Say you'd like to take a trip to Africa, and you think it's going to cost $3,000. You can create a campaign for that goal."
That sounds appealing on the surface. But it neglects some of the most basic tenets that have defined crowdfunding up to now.
Throughout history there have been important endeavors that needed support. The arts, for example, have often relied on patronage. Sometimes, the support has come from individual benefactors, such as the Medicis, who helped spur the Italian Renaissance with their support for artists, including Michelangelo and Leonardo da Vinci. And sometimes it comes from collections of people or organized nonprofit groups. Modern organizations such as Kickstarter, Crowdrise and Fundable have capitalized on the power of the masses and the reach of the Internet to broaden the availability of patronage for aspiring artists, for charities or for business start-ups.
The problem with some sites, though, is that they have too few limiting factors on the kinds of campaigns they allow. They are used, in effect, to create gift registries even when there's no special occasion for the gift.
We all have bucket-list goals that we can't afford (which is usually why we've relegated them to our long-term to-do lists). But why should someone pitch in to pay for my dream cruise when she hasn't been able to take a dream cruise herself? Such a gift would beg for reciprocity at a level that can't be sustained.
There is great variation in the ways crowdfunding companies reap their profits. While most take a percentage of the funds raised (often in the range of 4% to 5%), some sites won't collect on pledges unless the fundraising target is met, which means the sites — and those hoping to raise money — get nothing unless the goal is met. Others disperse any funds raised to the fundraiser, whether or not the goal is reached, which means the company gets its 4% no matter what — and that donors are on the hook whether or not enough funds are raised to complete a project.
A website's potential for financial gain may provide it with an incentive to allow a broad range of fundraising. But that doesn't mean the rest of us have to buy in.
I say, let's continue to crowdfund. But instead of giving that $25 to someone who wants to go bungee jumping, donate instead to the young woman who is working on a documentary about autism, or the couple hoping to bring a locally sourced food truck to their city.
Lady Liberty, I'm betting, would agree.