The sun is beating down on my patio and the thermometer reports 102F. The humidity is a soupy reminder that I’m back in Philadelphia after a two week vacation in southern California. July has been a month to take some time away from work and home. Both Sanj and Jerry have been taking their own vacations.
I returned to a dead desktop PC. A replacement is on order. Although we’re going through a slow patch, things are still moving forward. We’re planning our next and last shooting date for KAISHAKUNIN and locking down the location. In the meantime, I’ve had a chance to reflect on the crowdfunding campaign. It went far better than we had anticipated.
Crowdfunding for an independent film without any recognizable actors attached is fraught with uncertainty. Will anyone care about the project to contribute their own money? Will the call for contributions be noticed in the fray and noise of social media? Do we stand a chance of meeting our goal? Are the perks compelling enough?
Building a Track Record
People are unlikely to contribute to someone unproven. We decided against crowdfunding Zombie Casserole since it was our first endeavor. Since then, we’ve produced two short films and contributed to a dozen others. Jerry, our director and writer, cut his teeth on PAINKILLER. None of us would ask for contributions if we were not confident we could deliver. It’s not a charity; people expect something for their money.
Helping out on other projects has given us avenues to learn from others, increase our network, and build a good reputation. That gave us an initial boost on social media. Even if people could not contribute, our friends in the film community shared the campaign. It was gratifying and heartening to see the support we’ve given come our way.
It’s a simple equation. If we had not put in the time and effort up front, we would not have the support or the skills needed to bite off a project with the complexity and promise of KAISHAKUNIN.
Goal Setting
This is the first crowd funding campaign I am involved in. Naturally, I wasn’t sure what to expect. I have seen other film funding campaigns overreach with a $100,000 target. They failed without reaching even 1% of the goal. Without a recognizable actor attached, established source material or a built-in audience, triple digits are unrealistic. The gut reaction goes something like, “Holy crap! There’s no way they’ll raise that much. I’m not going to contribute.” The project needs a hook.
The Mystery Science Theater Kickstarter campaign had all three and brought in $5.7million. A more modest project, Remember the Sultana, a documentary on a steam boat tragedy during the Civil War brought in just over $100,000. The audience is not quite as broad as the MST3K crowd, but there are history buffs (I confess I did contribute). They also have Sean Astin (Goonies, Lord of the Rings) as an executive producer.
Grass-roots independent films typically don’t have the hook to reel in six digits – nor do we need six digits. We are doing a short film, not a feature. Factoring in the costumes, location rental, location insurance, etc. we estimated $6,000 and that it would come out of our own pockets. We wanted to defray expenses a bit and build interest in the film.
We settled on a modest $2,000 target.
Choosing a Crowdfunding Provider
The choice falls between IndieGogo and Kickstarter. Sure, there are other providers.
- Go Fund Me – This is the right platform if you need to raise money to cover losses from a house fire or that insurance won’t cover. It’s not the right venue for art projects.
- Seed & Spark – Exclusively focused on funding film projects. It’s worth a look and keeping tabs on the progress of this platform, but I’m hesitant to put a project on it. Contributors may not be comfortable going through an unfamiliar web site. That may change as the site gains support.
Both IndieGogo and Kickstarter take 5% if the project meets its goal; however, Kickstarter does not release any funds unless the funding target is met. IndieGogo’s Flexible Funding option lets you keep the funds, even if the target is not met, but takes an additional 4% for a total of 9%. We anticipated falling short of our goal and landing around $600-$800. If we fell short, it would net us around $546-$728. Well, that’s not entirely true. Credit card processors lop another 3% off the top for a processing fee bring the total overhead to 12% ($528-$704). If we went through PayPal, then there’s another 3% surcharge.
Contributions can be deposited into an individual or business account. We decided it would be prudent to send it to our For Zombies Productions, LLC business account and have it count as profit on our ledger come tax time. The IRS has been paying more attention to crowdfunding income. If you are considering a crowdfunding campaign, pay attention to where the funds are going and the tax implications.
Picking Perks
Offering perks that stand out from the crowd of your typical crowdfunded film is difficult. The usually include the following:
- Social media shout outs
- Digital download of the film
- Autographed DVD and poster
- Attend a screening of the film
- IMDb producer credits
Ours are no different. Even offering some of the basics can potentially break the bank if not properly managed. Getting DVDs printed can easily take most of the budget. In 2013, Sanj and I had a thousand copies of Zombie Casserole DVDs professionally printed, including the DVD case jacket. It ran an even $1 per unit. We used DiscMakers, a printing house in Pennsauken, NJ. I priced it out recently and it’s still the same. A thousand DVDs are difficult to move. Sanj and I still have around 600 left. The unit cost goes up as the number of prints go down. This doesn’t include shipping. Since we’re based in Philadelphia, a car ride to NJ to save $200 makes sense.
| Quantity | Total Price | Unit Price |
|---|---|---|
| 1,000 | $999 | $1.00 |
| 500 | $885 | $1.77 |
| 300 | $696 | $2.32 |
| 100 | $242 | $2.42 |
Some films offer the opportunity to appear as an extra or a featured extra. A few friends of ours offered that for RAPT which features a movie theater audience in one of the scenes. KAISHAKUNIN has a much smaller cast and doesn’t have any need for extras. This simply wasn’t an option for us. Other filmmakers have offered video editing sessions, script consultations and personalized Skype sessions to ask the director questions. We may consider these in a future crowdfunding campaign, but these didn’t feel like a good fit this time around.
Preselling
A few months ahead of the campaign, we considered preselling videography services in exchange for contributions to the crowdfunding campaign. People are more likely to contribute if it looks like it will be successful and having guaranteed contributions is a good way to prime the pump. It does come with a cost. Any cash coming in through the campaign is subjected to the 7%-12% processing charge. I did bring in some extra funds as a wedding videographer. Ultimately, we decided to deposit that directly into our business account. Since the campaign did get off to a good start, we could avoid paying IndieGogo’s processing charges.
Pitch Video
Any article on crowdfunding will tell you to make your pitch video short, to-the-point, and entertaining. Some videos will have clips from the film in progress hoping to raise funds for finishing the film. Ours is a simple message from the producers and actors on location. We’re producing a short. Having scenes in the pitch runs the risk of giving away too much. More to the point, we needed the funds before we started shooting. Location rental was not cheap.
Our video had less to do with the successful funding of our campaign than with the unexpected generosity of our friends. The scams I encountered while the campaign was in full swing were also unexpected. More on that in Part II.