Crowdsourcing

Spot Us Reporting: Crowdfunding in Journalism

*disclaimer at the bottom.

So what is Spot Us?: Spot Us is a nonprofit that allows an individual or group to take control of news in their community by sharing the cost (crowdfunding) to commission freelance journalists. The short answer - Spot Us will pioneer "community funded reporting" and will start in the San Francisco Bay Area.

It is very much inspired by Kiva.org and DonorsChoose. In fact, Spot Us developed as an idea while I was helping Jeff Howe work on the crowdfunding chapter of his upcoming book.

Essentially I'm trying to figure out if collective action (ala Clay Shirky), in the form of donations, can be used to create a new business model for journalism, an industry that is in dire need of an adrenaline boost. It is very much an outgrowth of citizen journalism, but postulates that people value their time more than money. In other words: It is far easier for people to participate in investigative journalism by donating money than it is for them to donate their valuable time.

The challenge: We are just starting out but I can already identify one of our biggest challenges. Finding people who value good journalism. Let's take a concrete example.

We have our first pitch: Right now Spot Us is using a wiki to accept pitches and is fundraising with ThePoint as a third party e-commerce solution (this is pre-prototype experimentation to get a proof of concept).

And the very first pitch we received is fantastic. It comes from an experienced journalist (from Wired.com) and would tackle an important topic: that ethanol might be the weak link in California's energy network. You can find details of the pitch here and can even donate to the pitch by clicking the image below.

The writer is asking for well below market value because he "has been wanting to do this story for a long time." In fact, all this story needs is 20 people to donate $10 each or 8 people to donate $25. As I see it: We have an important story, from a qualified writer, willing to do it at a price that could only be described as "a steal." I have no doubt in my mind that there are 20 people out there who would be willing to donate $10 to ensure that this story is reported and told. But how do I find them?

This is the difficulty that any crowdfunding project must face. How do you find and target potential donors?

One site that has come to my attention recently is SocialActions which hopes to produce an API to search across 19 different micro-lending sites (see interview with SocialActions). At a higher level, SocialActions is trying to tackle an incredibly important hurdle: How do volunteers and projects that need volunteers find each other?

Right now each crowdfunding project does its own outreach. Efforts are duplicated and probably done with little or no effect for some. This is where SocialActions can come into play. Helping volunteers find nonprofit organizations that need to crowdsource some of their labor, with the full support of each crowdfunding project - by pooling their collective outreach efforts.

One question I have: How will SocialActions decide who gets to be included in the search? Take StrayForm, a crowdfunding project for the arts. One might not consider them a "social good" - but they certainly need to find people who will volunteer their time.

That question aside: All crowdfunded projects face this delima. They are all built on the assumption that what they hope to produce is worth small donations from interested parties - but they need to find those interested parties.  The second the ethanol pitch was created - I looked it over and realized that it would be of interest to people concerned about the environment, California, ethanol or clean energy. The question is how to get those people to act.

Even Kiva.org faces this problem, although one could argue they've reached critical mass. Kiva relies entirely on organic growth but they are constantly looking for ways to tap into new audiences. Just this morning Kiva announced a new video campaign using Involver's Facebook application and I'm told has already generated over 1000 hits (UPDATE: See comment below on some incredible stats). That's the beginning of organic (ideal) growth. 

The cool long term affect of the Facebook app is the ability to track the power users, and find out who is participating by age, sex and geography. I suspect that the Facebook application will give them new demographics (younger) from what they are traditionally used to seeing via their website. But I guess that's the ticket - finding ways to tap into a wider audience which means there are more people likely to act.

You can find the Kiva.org campaign page on Facebook here:

disclaimer: As promised in the intro post - I will keep discussion about my crowdfunding startup Spot Us to a minimum while guest blogging here at Crowdsourcing. And to ensure that, I have written this blog post first so I can now leave it alone unless it seems absolutely relevant.

Crowdfunding: A Question of Precedent

One of the pleasures of writing a book is that it forces me to consider thorny, subtle questions that I would ignore in a magazine article, and also provides me with the kind of  time frame in which to slowly develop answers to them. One such question was whether or not to include crowdfunding in the book at all. Crowdfunding, in broad strokes, involves tapping the crowd's wallets to fund everything from movies to software projects to football (er, soccer) teams to third-world entrepreneurs.

I originally underestimated crowdfunding's potential, but in the last year or so crowdfunding has emerged as a surprisingly robust and flexible model of financing. In the end I devoted an entire chapter to crowdfunding, and early readers have been both surprised and impressed by the stories within it. What my editors (on both sides of the Atlantic) were intelligent enough to note is that crowdfunding provides a final, persuasive link in the crowdsourcing argument.

To wit: The crowd can think it, the crowd can make it, the crowd can refine it, but who's going to pay for the crowd's crazy ideas? Oh, right: The crowd has that covered too. Crowdfunding has forced me to broaden my definition of crowdsourcing a bit: It's not that crowdsourcing replaces employees, but that it replaces "designated agents." The simple way to phrase this is that crowdsourcing takes place when the many perform the functions once restricted to the few.   

But I'm still troubled by a trickier question that's plagued me ever since I first started researching crowdfunding models: How is this different from political fundraising? Haven't candidates always been dependent on the crowd? Has the Internet—which was famously used to great effect by Howard Dean in 2004—changed the nature of political fundraising in a qualitative fashion ("More small donors change the whole  paradigm!") or merely quantitative manner? ("Pshaw. Small donors have always been an essential ingredient to a campaign. Now they're just a bit more important.")

I think we have an answer to this question, and please excuse me for burying the lede: Today Barack Obama announced that he had collected contributions from one million donors. As Jeanne Cummings notes in yesterday's Politico, "The source of the Democratic strength is the fundraising story of the year: the rise of the small donors, those who give less than $200." McCain, by contrast, has only 150,000 small donors (Which historically speaking, is also a huge number of small donors, says Michael Malbin of the non-partisan Campaign Finance Institute) and Hillary Clinton has 225,000. Here's Meyer:

To appreciate the impact of his small-donor base, consider these facts:

In 2004, there were a total of 2.5 million donors to the entire presidential field — Republicans and Democrats. At the rate he’s attracting small donors, Obama alone could surpass that number if his campaign marches on to November.

Only about 3 percent of Obama’s donors have given the maximum contribution of $2,300, his campaign says. That means he can go back and ask for more money from 97 percent of his contributors.

The sum raised by his small givers through January — $47 million — roughly accounts for the difference between his net contributions for the primary race from individuals, $132 million, and Clinton’s, $96 million.

Based on today's announcement, and the accompanying political analysis, I'm staking out a position: Crowdfunding is an unprecedented phenomenon. While it predates the Internet in theory, it doesn't do so in practice. Obama, a game changer in so many other ways, has become the first crowdfunded presidential candidate. Care to disagree? As always, I love nothing better:

Crowdfunding Political Candidates

Just wanted to throw out a quick (and belated) link to a post in the politics and technology site, Personal Democracy Forum, about an innovative fundraising strategy launched by the Democratic fundraising clearinghouse, ActBlue. Essentially, ActBlue is allowing the public to "draft" potential presidential candidates by contributing to campaigns that may or may not actualize. If the given political figure chooses not to run, the money will go instead to the DNC. Joshua Levy, the PDF writer behind the post, calls this crowdsourcing. I don't quite agree (it doesn't replace a function previously performed by employees), but I will call it crowdfunding, and I think that like anything that provides a greater voice to the electorate, it's a sign of progress in our political system. Levy says he's spoken to Republicans who have assured him the GOP has a similar effort in the works.