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Brazil: Crowdfunding Potential

Recent months have seen an explosion in Brazilian crowdfunding sites, inspired by the pioneering United States site Kickstarter that has raised over US $40 million for creative projects in just two years. All links in this post lead to Portuguese language pages, except when otherwise noted.

The blog of the State of Rio de Janeiro's Culture Secretariat explains to newbies:

O termo crowdfunding pode ser traduzido literalmente como financiamento da multidão, ou seja, uma versão 2.0 da antiga “vaquinha”, só que agora voltada para a produção cultural.

The term crowdfunding can be literally translated as financing from the crowd, or, a 2.0 version of the “kitty”, except now its targeted at culture.
Movere.me - Move ideas, move people, move the world... and you, what does it move you?

Movere.me – Move ideas, move people, move the world… and you, what does it move you?

The concept has rapidly gained public attention writes Tati Leite, founder of a platform called Benfeitoria (Dogooder Factory). She wrote recently on the blog Crowd O quê? (Crowd What?):

A impressionante – e emocionante! – explosão das plataformas de crowdfunding no Brasil desde janeiro de 2011 ganhou bastante espaço na mídia e em veículos especializados em negócios

The impressive – and exciting! – explosion of crowdfunding platforms in Brazil since January 2011 has won a lot of space in the media and business publications.

Collaboration instead of competition

Brazil has one high-profile site for fundraising for creative projects that was first out of the box: Catarse (Catharsis). However sites like Multidão (Crowd), Movere and Benfeitoria (Dogooder Factory), and yet smaller sites are trying to raise their profile as well.

Screenshot of #Crowd Map, powered by ideias.me

Screenshot of #Crowd Map, powered by ideias.me

Members of the Google Group Crowdfunding Brasil have collaborated to list all of the existing sites (currently about 20 in total). Ideias.me has mapped the platforms by place of origin, revealing more than one outside of the more “connected” states of the south, including one in development in the state of Ceará.

All adopt the “all or nothing” approach, which is that if projects do not meet their fundraising goal, they are not funded and money pledged is not charged to supporters. (Catarse, Multidão and Movere all charge a 5% administration fee and transaction fees on donations. Others charge as much as 9%.)

Catarse and Multidão both favor creative projects based in “action”. They are currently joining forces, and in keeping with a strong Open Source culture in Brazil, Catarse recently opened the code for its site, demonstrating their total commitment to collaboration.

Some sites are looking to focus on the common good, including Senso Incomum (Uncommon Sense) and Benfeitoria, which has a slightly more ambitious concept that transcends money and allows for collaboration. Benfeitoria is trying to set itself apart by not charging for administration, not calling fees “unjust” – they claim to be simply experimenting with another business model.

Benfeitoria co-founder Leite cites what she says is a “convergence of values and a collaborative posture adopted by the creators of the platforms”.

A couple of blogs have sprung up around the idea of crowdfunding and crowdsourcing, including the blog Crowdfunding Brasil aiming to disseminate the idea in Brazil.

With a Brazilian accent

Many cite the beginning of crowdfunding in Brazil as the initiative of a bunch of Rio music fans in August 2010. Bruno Natal of URBe blog recounts:

Por email, organizamos uma campanha entre amigos para rachar os custos e viabilizar a vinda da banda. Nascia o “Miike Snow no Rio”.

By email, we organized a campaign among friends to cover the costs and make possible a trip by the band. “Miike Snow no Rio” (“Miike Snow in Rio”) was born.

This successful effort led to the creation of the site Queremos.com.br (We Want), which has subsequently brought Belle and Sebastian and other bands to Rio.

With the launch of the broader sites mentioned above, we can start to get a feeling for what crowdfunding may look like in Brazil, a country known for organic community organizing and creativity.

Small arts projects (photography, film, dance, music, music videos) seem to have the greatest chance at getting funded at the moment, those under R$5,000 seem to have the best chances. This one Diário de Bordo (Travel Diary), on the website Catarse, was to support a 19 year old illustrator's first trip to São Paulo, and her diary of sketches that will result. She writes in her blog:

Meu nome é Amanda, sou ilustradora, universitária e moro em Natal – RN, local de onde nunca havia saído. Sempre sonhei em conhecer São Paulo, participar do Festival YouPix e concorrer ao prêmio Blog Talent Show. Inquieta, decidi criar um projeto de crowdfunding […] Nas últimas horas, a agência Tboom doou os 40% restantes e, junto com os demais doadores, tornou realidade todas as minhas expectativas.

My name is Amanda, I am an illustrator, university student and I live in Natal, Rio Grande do Norte, a place I've never left. I always wanted to go to São Paulo, to participate in the YouPix Festival and to compete for the Blog Talent Show prize. Being restless, I decided to create the crowdfunding project […] in the last hours, the [Ad] agency Tboom donated the remaining 40%, and together with the other donors, made my hopes a reality.

Two larger journalism projects caught the imagination of the online community. Ajude um Repórter (Help a Reporter) is a project recently funded by Catarse, that will create a crowdsourcing platform over email and on the web, helping reporters connect to “citizen reporters” on the ground on issues that affect them. Cidades para pessoas (Cities for People) will finance a trip to 12 cities around the world to bring clues back to Brazil about what makes a more livable city.

Only a small number of successful projects were looking at social change. One micro project for bookswap shelves in the city of Campinas got funded on Senso Incomum. Another small project that got funded, at Incentivador (Motivator), is a community clean-up project for an indigenous village in the state of São Paulo.

At the Casa de Cultura Digital (House of Digital Culture) in São Paulo, a recent session with the founders of Catarse gave some insight into the numbers so far:

A média do que é solicitado para as propostas está entre 5 e 10 mil reais. O máximo já pedido foi 40 mil reiais e o máximo conseguido foi 26 mil.

The average requested is between R$5-10,000. The most requested was R$40,000 and the most ever raised was R$26,000.

International potential

Comum (Common), "a nonprofit group devoted to the promotion of a new economy based on collaboration and emotional relationship between people".

Comum (Common), "a nonprofit group devoted to the promotion of a new economy based on collaboration and emotional relationship between people".

Perhaps what is most exciting about Brazil is the dual potential of crowdfunding: what appears to be a huge domestic appetite, and international interest in Brazilian culture and innovation.

The Paris-based crowdfunding site Ulule has opened a Portuguese-language site which sits alongside English and French-language sites, and could strengthen international links for Brazilian projects.

Catarse / Multidão have created an interface in English, for potential international funding, but most creators of project have not translated them into English for an international audience. The site will soon offer this possibility for users.

And the issue of international payments has yet to be completely ironed out for most sites, but most are aiming to incorporate Paypal soon.

The online forum The Daily Crowdsource just set up online forums on crowdfunding and open innovation in English, German and Portuguese, in what seems a recognition of the importance of the Brazilian groundswell of interest.

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