Normally on sites like Kickstarter or IndieGoGo, a project is not funded unless it meets its fundraising goal. Even if it’s $1 short on the day of the deadline, everyone’s money is refunded. But, on IndieGoGo and other crowd-sourcing sites, a ‘Flexible Funding’ option exists where all funds pledged during the campaign are delivered, regardless of whether the goal is met.

There are obvious situations where ‘Flexible Funding’ makes sense (as was the case with our successful Avarice campaign), but for the average fundraiser, it should be a no no.

What’s so bad about it? Wouldn’t you want to keep the money you raised? Isn’t some money better than none?

Whether you’re a potential donor or hopeful fundraiser, here are three warnings against the dangers of ‘Flexible Funding:’

It’s Hugely Dishonest

Say you sit down to budget your project and you determine that you need a minimum of $5000 to make it all happen. You set up your ‘Flexible Funding’ campaign, but are only able to raise $1000 before the deadline hits. Are you then able to complete your project for less than your budget?

The correct answer is ‘no.’

Why would you set yourself up for that situation? Are you planning on making off with other people’s money with no hope of delivering on your promises? It makes no sense to me. Have the decency to be transparent with your donors. If you can’t make do with less, then don’t take their money. Period.

If you can make do with less, then why on earth are you trying to raise so much more? Don’t be a Greedy McGreederson; only ask for what you need. If people love your concept, they’ll gladly donate more than what you’ve asked for.

It Robs You of Valuable Feedback

Everybody in business has to pitch their ideas. It’s the ultimate good-idea/bad-idea filter. If your idea is compelling, everybody will jump onboard. If your idea doesn’t hold water, it’ll be shot down, forcing your to re-think your project (and potentially protecting you from a disaster).

‘Flexible Funding’ short-circuits that safety mechanism. Instead of a clear ‘NO,’ you walk away with cash in hand. It’s one of the few instances in life where failure is rewarded.

If your pitch doesn’t spark excitement, the finished product won’t either. A failed campaign is the best indication that you need to seriously reconsider your project.

It Discourages Future Investment

I’ve seen it happen many times; an ambitious filmmaker sets off with a five-digit fundraising goal, barely breaks into four-digits by the end of the campaign, and the project is never heard of again. What happens to that money? Where does it go?

Put yourself in the shoes of a potential donor. You go to work at a job you don’t like, get paid less than you’re worth, only to turn around and blow all your money fixing your poorly manufactured Chrysler. Donating even $50 is a big commitment for most folks. So, when a donor ponies up cash for a go-nowhere ‘Flexible Funding’ campaign, he sees his money disappear into a bottomless black hole.

How many times does that have to happen before a donor gives up and stops donating? Just once.

How many disenchanted donors will it take to shut down the awesomeness that is crowd-sourcing? You tell me.

If you want crowd-sourcing to still be a thing in 5 years, you need to be honest with yourself, respect your donors, and face the possibility of failure. Disagree with me? Please leave a comment and explain your position.

Dan Baker

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Dan works out his social anxieties by producing and directing films. He's a proud New Mexican, and prefers green over red.

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