Crowdfunding Your Salary: Wave of the Future or Financial Nightmare?
Sites like Kickstarter.com and IndieGogo.com have put crowdfunding for creative projects on the map, but can the same model be successfully applied to an individual’s salary?
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Everyone has career dreams, but big dreams can mean big price tags. This dilemma has inspired entrepreneurs to use crowdfunding websites to fund new projects and ideas, using the donations of others.
The most well-known crowdfunding site around, Kickstarter.com, has raised over $800 million for over 45,000 creative projects worldwide since its launch in April 2008, and has made “crowdfunding” a familiar concept amongst the common folk. Another recent crowdfunding startup that is making waves, for more reasons than one, is Gittip.
At its most fundamental level, Gittip is a crowdfunding site for freelancers wanting to make a living out of their passions, and their compensation is based on continuous, anonymous “microdonations” from patrons. What exactly does Gittip consider a “microdonation?” It’s any monetary contribution in amounts ranging from $0.01 and $100 per week. We’re not talking millions of dollars here, we’re talking pennies – but every bit helps. (They hope.)
The goal of Gittip is “to create regular streams of funding for individual participants, instead of gathering a lump sum of money for a particular project,” writes Andrew Leonard in his Salon review of the crowdfunding startup. Even Gittip itself is funded through Gittip, with its developers choosing, at will, how much they deserve to be paid for their contributions that week. Chad Whitacre, founder of Gittip, states that the compensation plan works for the company because the developers find a “balance point between resentment and guilt” when choosing their salary amounts.
If Gittip can thrive on its own concept of crowdfunded salaries, then maybe this really can be a viable solution for freelancers after all — or can it? Gittip is still in its infancy, only 17 months old, and it seems to be holding its head above the water for now, but there’s no way of telling if this is a solution for the company and its participants in the long run.
Crowdfunding has also crossed over into the trillion-dollar student loan industry thanks to a Northeastern University graduate by the name of Kelli Space, who graduated with an estimated $200,000 in school loans back in 2009. With the help of three friends, Space co-founded the new startup, Zero Bound, which is a site that helps students pay off their school loans through crowdfunding in exchange for community volunteering.
There’s no doubt that salary crowdfunding — in some way, shape, or form — could become a new way to get paid, but we wouldn’t go so far as to say that you should quit your day job anytime soon.