January 7th, 2013
Crowdfunding is hot. What is it, and why should funders of health services research keep an eye on its development?
Let’s start with what crowdfunding is. The term itself is a variation on “crowdsourcing,” which entails putting out a problem (often a technological one) for input from either a select audience (such as one’s peers, perhaps via a professional discussion list) or the general public (some food products companies are using crowdsourcing to drum up interest in new flavors or food items by seeking suggestions for what to call them).
In crowdfunding, the problem to be solved is usually a straightforward one: lack of money. Given that health funders are in the business of distributing money for research or health promotion projects, it behooves them to familiarize themselves with crowdfunding, which is becoming a sort of DIY (do-it-yourself) funding mechanism for all kinds of projects.
Many crowdfunding campaigns have nothing to do with health services research and can range from pickles businesses at the farmers’ market level, to fashion design, to product development of bicycle lights, can openers, table lamps, and so on. But there have been some fascinating forays into crowdfunding in the health sciences, and it is those to which I will now turn.
There are an increasing number of platforms for crowdfunding, some of them niche sites that serve small, specialized audiences, and some of them enormous operations that cover a vast range of topics and that are some of the most popular destinations on the Web.
One of the largest is Kickstarter. One recently funded project illustrates a way in which a few researchers of health-related topics are using Kickstarter to raise funds (even though health it is not a designated category on Kickstarter). In this case, the project revolved around a book project on bedbugs!
Freelance writer and journalist Brooke Borel successfully raised $5,900 (exceeding her goal of $5,000) to finance travel and other research-related expenses for a popular historical and scientific book on bedbugs.
This project is of note because Borel already had a contract with a prestigious academic publisher (the University of Chicago Press) but needed additional funds to complete her research on this public health–related topic. Crowdfunding, therefore, can be used by scholars to supplement other forms of funding.
Participation in crowdfunding by members of the general public who make pledges for projects that interest them promises to benefit researchers who need seed money or travel grants that will enable them to carry out research projects. They can then develop them into larger projects that more traditional funders might at some point be willing to support at a larger level than crowdfunding might be able to sustain. Traditional funders might even look favorably on projects that had been crowdfunded at an early stage, given that a successful crowdfunding campaign requires a certain level of creativity, powers of persuasion, and (though not always—some successfully crowdfunded projects are a bit on the odd side) scientific soundness—things that grantors look for in potential grantees.
An example of a successfully funded health-related project on a niche crowdfunding website is the project entitled “Intercultural Communication and Pandemic Prevention” on the science-focused site, Petridish. The project page is worth reading because it is written very much like a grant proposal and yet with a popular audience also in mind.
Why should health funders care about crowdfunding? Answer: Because traditional funders benefit from the increasing use of crowdfunding in health services research in several ways.
First, they now have additional ways to evaluate applicants (for example, by reading their crowdfunding campaign pages and quizzing them about what actually resulted from the projects successfully funded or by being able to refer to the online records of projects that failed to meet their funding targets, in the case of possibly problematic applicants—or even note that a project was funded but nothing appeared to have been done with the funds—a useful red flag for grantors).
Additionally, they can headhunt for especially promising researchers by following them early in their careers or note projects launched by established researchers seeking funding for particularly novel research projects that normally might not appeal to traditional funders until a far later stage.
The projects on MedStartr range from health technology devices to global health projects, such as Saving Mothers: Partnering with Community Health Workers Globally, which is designed to lower maternal mortality rates in the Dominican Republic.
This brings up the question of what sorts of entities or researchers have tried crowdfunding to finance research or health promotion projects. As we have seen, some recipients are independent scholars (just the kind of people that have trouble getting funded by traditional grantors and yet who are often engaged in worthwhile health-related research). But in the case of the Saving Mothers project, the organization seeking funding is a 501(c)(3) nonprofit. Such organizations are eligible, as a rule, for traditional funding.
And speaking of funding, those backing crowdfunding campaigns should note that policies differ among crowdfunding sites when it comes to the ultimate disposition of pledged funds.
For example, Kickstarter is an all-or-nothing proposition (if a project does not meet its funding goal, it receives nothing, and backers have lost nothing but the bit of time and effort it takes to read about a project, watch its promo video if any, and pledge online).
By contrast, Indiegogo offers two funding models, Flexible Funding and Fixed Funding. See here for details.
On Indiegogo, an example of a project that has chosen the Flexible Funding model is the University of California, San Francisco, Global Turnaway Study, which looks at the experiences of women around the world who are denied legal abortions.
This project is an interesting example of the use of crowdfunding by academically affiliated researchers in the area of global and women’s health. With the flexible funding model, even if researchers do not meet their goal, they get to keep what is pledged and, in this case (which is not true of all crowdfunding campaigns), donations are tax-deductible.
In sum, crowdfunding will not replace traditional health funders. But it is a development to watch.
Have you tried crowdfunding, as a means to raise money or to contribute money? Let GrantWatch Blog know your experiences with crowdfunding.
Email This Post Print This Post
Don't miss the insightful policy recommendations and thought-provoking research findings published in Health Affairs.
to the #1 source of health policy research.