As tighter budgets and struggling economies drive a need for new sources of funding, the internet is proving to be invaluable in raising awareness of projects across previously closed regional and national boundaries. A potentially game-changing evolution of social media is the very recent emergence of crowd funding for basic research.
Crowd funding is the practice of raising small amounts of cash from large numbers of ordinary people, and (not surprisingly) has strong roots in the private market. There, start-ups and small companies often vie for investment to help raise their projects off the ground. While only a very small proportion of start-ups succeed, risky investments can produce significant gains and venture capital firms mitigate this risk by betting on hundreds of different companies. Companies that can turn a profit are used to cover the losses of the rest.
In this regard the private market is not unlike basic research, and online crowd-funding websites such as Kiva have shown that feelings of involvement and social gain can be leveraged against operating costs to support, through hundreds of thousands of small donations, projects that would have otherwise gone unfunded. While the investment in such start-ups was, until very recently, restricted to “accredited investors” – a euphemism for a small number of very rich people – the promise afforded by the current online incarnation of crowd funding has caused the business world to take notice.
Just last year, U.S. President Barack Obama signed into law the JOBS Act (Jumpstarting Our Business Startups), which included a provision legalizing crowd funding for small businesses to take effect in 2013. Small businesses are not the only ones that stand to gain, and among those companies currently leading the charge in applying the crowd-funding model to basic research are Sciflies, Rockethub, FundaGeek, The Open Source Science Project, Petridish and Kickstarter.
The concept is simple: researchers start by describing and pricing a project, which is submitted to a crowd-funding website for approval. If accepted, the pitch is placed on-line and donors have between a few weeks to a few months to read the proposal and make a donation. Although individual donations are often in the $10 to $250 range, these stack up quickly. Proposals reaching their mark cash out at the end of their funding window, while those falling short do not – and the money is returned to the donors. In this way crowd funding can help scientists fund their research projects by tapping a previously neglected resource (and without the administrative burden traditional funding sources demand).
More importantly, this also provides a long sought after venue by which scientific investigators can more robustly engage the public in their research projects from the incipient stage, rather than through publication in specialist journals that are all but inaccessible to the average layperson. While new investment opportunities inevitably carry risks, these are not insurmountable, and will be the focus of my next post.