Kickstarter vs. the National Science Foundation

A hologram of a lightbulb

Detail from ‘Parade of Holonzki’ by Ingo Maurer and Eckard Knuth.

What is Kickstarter?

Kickstarter (USA), Pozible (Australia), Fondomat (Czech Republic), Sponsume (European Union), Peerbackers (worldwide) and a host of other crowdfunding solutions provide platforms where people can solicit funds for projects. There are specialised crowdfunding platforms for music, education (Funding4Learning), and even for research and invention (Rockethub). Anyone can contribute to the projects, and it often takes more than 1,000 contributors to provide $10 – $50 each before a project is fully funded.

It is a bit unfair to compare the National Science Foundation (NSF) to Kickstarter. One has an established proven model to “to promote the progress of science; to advance the national health, prosperity, and welfare; to secure the national defense”. The other provides a new, disruptive model that is yet to demonstrate its resilience. Still, that’s what I’m going to do. I want shine a light on Kickstarter, throwing it’s shadow in stark relief against the edifice of the National Science Foundation.

Kickstarter is seen as a leader in this emerging field, in part because one project, the Pebble watch, has attracted more than $10,000,000 in funding. Ten million dollars… that’s serious money! Especially considering that they were asking for a budget of $100,000 to start with. While Pebble is an outlier, there are at least five other projects that have attracted over a million dollars. In 2011, Kickstarter funded almost 12,000 projects.

At a very basic level, the two models are not that different. Both provide funding for projects based on feedback from external people. Beyond that, everything else differs: the underlying idea; the way that you pitch your idea; the assessment process; the budget and the grant that you finally get.

The idea is different

The idea behind Kickstarter is different to funding agencies such as the National Science Foundation. You can see this clearly in the way that they describe themselves:

With an annual budget of about $6.9 billion (FY 2010), we [the National Science Foundation] are the funding source for approximately 20 percent of all federally supported basic research conducted by America’s colleges and universities. In many fields such as mathematics, computer science and the social sciences, NSF is the major source of federal backing. (About the National Science Foundation)

Kickstarter is not trying to fund basic research. It is trying to fund creativity.

Kickstarter is focused on creative projects. We’re a great way for artists, filmmakers, musicians, designers, writers, illustrators, explorers, curators, performers, and others to bring their projects, events, and dreams to life. (Kickstarter Basics)

The pitch is different

When you apply to Kickstarter, you provide a short video about your idea and a page or two of inspirational text. It is more like a marketing pitch than a funding application. You can shoot a video of yourself talking to camera about your comic book encyclopaedia, or your band’s next album. If you don’t have a video, you can just put up a picture. The key is to explain your idea quickly and simply, to communicate your enthusiasm and passion. You are giving your idea away to your readers so that they might adopt it and fund it.

When you apply to the National Science Foundation, you provide a long text document carefully outlining your idea, backed up by references to the accumulated science that sits behind it, curriculum vitae for your key people and a meticulously detailed budget. It can take months to prepare an application. The key is to explain your idea in detail, and try to eliminate all possible arguments against it. You are armouring your idea against your readers, who will attack it.

Assessment is different

Your National Science Foundation application goes to an internal review, then to a small number of anonymous experts who provide feedback to help the NSF make a decision. The NSF deliberately builds a barrier between you and the people who assess your application. The people who assess it are your intellectual colleagues and your rivals. They know who you are, but you should never know who they are. They don’t have to fund your proposal, they just comment on it and provide a recommendation for funding.

Kickstarter goes to an anonymous collection of a million people who decide then and there whether they believe in it. Kickstarter deliberately builds connections between you and the people who assess your application. The people who assess it ‘out’ themselves when they decide to support it. If they believe in it, they put their own cash into the project to ensure that it goes ahead. They (hundreds, even thousands of them) fund it themselves.

The scope is different

Most of the time, there is no point in applying to the National Science Foundation for less than $30,000. The work involved in developing an application just isn’t worth the reward. Lots of applications put in requests for somewhere around $100,000 per annum for three years. After a six month review process, the NSF will tell you if you are successful. There will then be a delay while contracts are signed, before the money is released. You need to plan about two years ahead of your actual work.

Because Kickstarter is easy to use, you can build a worthwhile Kickstarter campaign that asks for less than $1,000. On the other hand, some projects have asked for $500,000 and succeeded. You can apply any time. Most campaigns run over a month or less. If your campaign is successful, the funds are released three weeks later. Currently about 45% of projects on Kickstarter are fully funded.

Your grant is different

They do differ dramatically in scale. In 2011, Kickstarter raised approximately $119 million, about the same amount that the National Science Foundation spent about on Arctic and Antarctic Science. While Kickstarter will outstrip the National Endowment for the Arts next year, it will be a long time before it is disbursing $6.9 billion (the NSF budget).

The National Science Foundation requires a detailed, multiline budget. You need to detail every dollar that you spend and explain its relevance and connection to the budget. Assessors will scrutinise your budget closely. After all that hard work getting the budget precisely right, the NSF will almost always give you less than you ask for.

Kickstarter requires a one-line budget. Just one number – the total amount you need for the project. This amount can also be criticised by your potential funders, and you can respond to them and clarify any confusion. At the end of your assessment period, if you haven’t reached your target amount, you don’t have to pursue your project. Let me repeat that, so that all the researchers and research administrators in the audience understand what I am saying: Kickstarter fully funds your project.

Actually, Kickstarter does better than that. If you reach your target ahead of time, Kickstarter doesn’t stop. Your campaign keeps going, so that you can actually get more money than you requested. Imagine if you applied to the National Science Foundation for $100,000 and they gave you $10,266,845. That is exactly what happened with the Pebble watch. The NSF can’t do that – that can only happen on Kickstarter.

The Kickstarter lessons

I’m not saying that Kickstarter’s model is better than the National Science Foundation, or that we should replace one with the other. I’m just pointing out how different they are, and that this new model enriches the funding ecosystem. And, just quietly, I’m saying that maybe that the old might have something to learn from the young. Imagine if national granting agencies worked like this:

  • Flexible online systems.
    The Kickstarter system has the capacity to cope with videos, images, text and links. Most national funding systems are still resolutely text-based. They can’t cope with videos (of simulations, for example), discourage links (or bury them in PDFs) and have little patience for images that dare to be in colour.
  • Short applications.
    The Bill and Melinda Gates Foundation Grand Challenge Explorations applications, for example, ask for two pages outlining your idea and why you think it will work. Refreshingly short, with the capacity to inspire your assessors, rather than crush them until they refuse to do it anymore.
  • Open applications with open discussions. You post your proposal to an open Web site. The funding agency asks select experts to lead a discussion of the strengths and weaknesses of your project. Anyone else who is interested can contribute to the discussions.There are some areas, such as genetic engineering, where commercial imperatives may discourage people from applying. However, there are vast swathes of scholarship that have little to fear from this approach, and a lot to gain.
  • Set levels of funding.
    You choose to apply for a $25,000, $50,000 or $100,000 per annum project. If successful, you get that amount. This eliminates the need to develop an indicative budget for each project, and the need to negotiate if the project is funded for a smaller amount. It allows the funding agency to know ahead of time exactly how many projects it will be funding. The Bill and Melinda Gates Foundation Grand Challenge Explorations applications already work this way. If successful, you receive $100,000 to pursue your idea over two years. No budget required.
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About Jonathan O'Donnell
Jonathan O'Donnell helps people get funding for their research. To be specific, he helps the people in the College of Design and Social Context at RMIT University in Melbourne, Australia. He loves his job. One day a week he does his own research into privacy, identity and transactions on the Internet. He likes that day, too, even when it makes his brain hurt.

10 Responses to Kickstarter vs. the National Science Foundation

  1. Ben Kraal says:

    What do you think about using crowd-funding to seed research projects? Around the order of $1k-10k, which I think would be useful for doing a bit of research to show the potential of an idea for an ARC/NSF style of grant.

    • Jonathan O'Donnell says:

      Hi Ben

      I think that there are huge possibilities for funding seed projects through crowd-funding. I am just itching for someone at my university to say, “Lets try funding this through Pozible” (or Rockethub or whatever). It would be such fun to try.

      Here are the things that I think you need to succeed.
      1. A real outcome – an idea that people can grab onto because you are actually going to DO something. Most of the people in my College do work like this, so that is no problem.

      2. A network who will promote the idea. Smart academics keep in touch with their alumni, so most have a network already in place, who are based in the relevant industry and understand what they are trying to do.

      3. An idea that fits within the rules of the system you are trying to use. For Kickstarter, you need a US identity number and bank account. For Pozible, it needs to be creative. Rockethub does a lot of stuff, but it specifically does science and development, so it would work for most research. There is no point trying to shoehorn yourself into a space that doesn’t want you.

      4. A way to get the money from the crowd-funding system into a research account at your university. While this could be a show-stopper, it turns out that most universities are quite flexible about money coming INTO the uni.

      And you need to plan your campaign well. Regular updates, stretch goals, FAQs, the works.

      The advantages are legion:
      + You can do a campaign for $1,000 and a thousand dollars of untied funding will go a long way in some areas. I advise people not to do grant applications for less than $5,000 because it isn’t worth their time, but the opportunity costs are so much lower with crowd funding.

      + You are immediately building an appreciative audience for your research. People who can go on to become interview (or experimental) subjects. People who can implement your findings. People who like you.

      + It is a clear demonstration of dissemination of ideas and potential for impact, and ‘impact’ (however it is defined) is going to become more important over the next few years.

      + No funding = no commitment.

      Having said that, a sausage sizzle at Bunnings might bring in a similar amount of money. (Shhh. That is what my next post is about.)

      I’m not going to get to Brizzie in the near future, but I’ll be at the Gold Coast on 19-21 September 2012 if you want to talk further.

      • Ben Kraal says:

        Without going into specifics, I hear that a problem for crowdfunding research might be that people in the approval chain within a university might not understand it and so will not sign essential paperwork that could let it happen.

        Obviously this is a case for asking forgiveness rather than permission…

  2. Eva Alisic says:

    Great post Jonathan! And I think it would be an excellent opportunity for seed funding!
    Another way to seed fund may be the approach of the Awesome foundation (http://www.awesomefoundation.org). Each month, 10 micro-trustees throw 100 dollars each on the (dinner)table and decide which project they give 1k. Simple and quick, and potentially with great outcomes (if anyone is interested in some kind of Awesome Academia version, let me know, I’d be happy to try and get in touch with the Awesome people to learn what we could do).

    • Jonathan O'Donnell says:

      Great idea, Eva. I love the idea of the Awesome Foundation, but have never got involved.

      You and me, we are 1/5 of the way there already. What about it, Whisperers? Wanna get Awesome together?

    • Ian Jones says:

      If you need a couple of connects with the Awesome Foundation let me know, as one is the co-founder of The Hub Melbourne and in our circle.

      • Eva Alisic says:

        Thanks Ian, that would be great! I’m planning to catch up with Ross Hill this week or the next, the more input the better. Are you on Twitter?

  3. Jonathan O'Donnell says:

    Sian from RMIT said: What about http://www.petridish.org/ , http://www.xscited.net/Projects/viewList , or https://www.microryza.com/ ? I guess they’re science focused rather than for general research…

  4. Jonathan O'Donnell says:

    @Ben Kraal: Forgiveness, not permission is a technique that I have found quite useful in the past. Once you are saying “I have $7,500 that I need to put into a university account…”, the attitude might become more flexible.

    I think that there are always going to be quite legitimate questions about whether this is ‘research’ funding (as opposed to all that other funding we get…). Universities receive infrastructure funding based on the amount of research funding that they bring in, and the auditors are going to be interested in how they classify this funding. If it has come from Rockethub, where they specifically talk about research funding, it might be easier to get it past the auditors, but I don’t know.

    That is really the nub of it – at the moment we don’t know. Until we’ve done it, we won’t know.

    Jonathan

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