Rob Ford Crackstarter Money to be Split Among Four Canadian Charities

by Joseph Czikk | Culture

Crowdfunders have succeeded in raising nearly $200,000 for four Canadian charities through an Indiegogo fundraising initiative. Sound familiar?

Today Gawker editor John Cook took to his blog to announce that in the absence of any video showing Rob Ford smoking crack, a decision has been made to donate $46,195.65 to the Somali Canadian Associated of Etobicoke, The South Riverdale Community Health Centre, Unison Health and Community Services and Ontario Regional Addictions Partnership Committee.

“I'm disappointed to announce definitively that the money won't be going to purchase and publish a video of Rob Ford smoking crack cocaine,” wrote Cook. “Instead, we are pursuing the Plan B we laid out when we began the project: donating the funds to Canadian organizations that address the fallout from substance abuse.”

The latest news in the bizarre scandal involving Toronto’s mayor underscores the less-than-glamorous aspects of crowdfunding websites like Indiegogo and Kickstarter. Particularly troubling is when large amounts of the public are convinced to donate money to causes that won’t deliver on what they say they’ll provide.

In this case it was a video of Ford smoking crack. In other cases it was the infamous Geode, a wallet for an iPhone and credit cards that attracted 1,784 backers and over $350,000 of crowdfunders money. Many of those people received nothing, a problem that likely won’t go away in an absence of tougher regulations.

In an interview with Techvibes on June 19, Indiegogo cofounder Danae Ringelmann responded to inquiries about the company’s moral stance on willingly perpetuating instances where crowdfunders may not receive anything tangible in exchange for their money.

According to the cofounder, crowdfunding is not a transaction, but a “social experience.” It comes down to individual choice, she explained. “No one’s forcing anyone to fund anything.”

“One thing we encourage all funders to do is make sure they connect with the campaign owners if they don’t know them or ask all the questions that they may want answered in order for them to feel comfortable funding,” Ringelmann told Techvibes.

Of four possible funding models that platform creators can choose, just one allows crowdfunders to receive their money back. This is Indiegogo’s “Fixed Funding” model in which money is only returned if the funding target was not reached.

Ringelmann also received criticism for nearly funneling money to admitted drug dealers. She responded to several media outlets that not one member from the community or the mayor’s office issued a complaint. She called it a great example of how people can “vote with their dollar.”

Similarly, Techvibes readers responded that crowdfunding isn’t going anywhere. “People voting for their ideas with money is here to stay,” wrote one commenter.

The article also elicited a response from Seeding Factory’s Heri Rakotomalala. The cofounder of the crowdfunding consultancy said campaigns like crackstarter and products like the Geode will happen again and again.

“Is it a reason to claim that crowdfunding is a “general failure”? It’s an all-too hasty conclusion,” wrote Rakotomalala.

He argued that the success rate of VC and angel-funded companies is well below Kickstarter’s 44 percent success rate (the number of projects that hit their targeted funding amount). Why not decry VC and angel funding as a general failure as well then, Rakotomalala seemed to imply.

In this case trained investors are taking on the risk, not thousands of people who might be duped into giving away their money.

He also wrote that for early-stage companies who are risking ventures in unproven markets, crowdfunding could be a viable option. As well, public monuments such as the Statue of Liberty, the Tesla Museum and Montreal’s own Notman House were all made possible through crowdfunding.

Indiegogo may be differentiating itself from Kickstarter by accepting more risky and wild projects, but “for the sake of crowdfunding, it would be advisable for Indiegogo to select projects and raise the bar,” wrote Rakotomalala. Here’s where both Techvibes and Seeding Factory can agree on.

Photo: Gawker

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Joseph Czikk

Joseph Czikk

Joseph Czikk is a freelance reporter currently based in Montreal. more

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