the matchfunding model of crowdculture - …about crowdculture’s matchfunding model 4 | case study...

The matchfunding model of

CrowdCulture

https://www.crowdfunding4culture.eu/

https://www.crowdfunding4culture.eu/

2 | Case study CrowdCulture

Name of platform CrowdCulture

Geographical focus Sweden

Active since 2011

Crowdfunding model Reward-based

Type of crowdfunding All or nothing

Matchfunding partners Regional public authorities (e.g. from the region of Kronoberg)

Platform website www.crowdculture.se

Executive summary

Case study CrowdCulture | 3

CrowdCulture in Sweden is a matchingplatform with an ambition to modernizecultural funding. The reward-basedplatform operates with public partnersco-financing the funds raised by thecrowd. It cooperates on the basis ofrenewable annual contracts with localand regional authorities. These makeavailable public funds for the matchfunding. The matching process relies onthe number of backers and not on theamount raised by the crowd.

CrowdCulture is fully operational since2011 and is specializing in culturalprojects. The platform initiators expectgenerating synergies for the projectowners of crowdfunding campaigns bytheir focus on the cultural sector.

Public partners cooperating withCrowdCulture report that thisengagement with a crowdfundingplatform enhanced their image asmodern and innovative regions.Furthermore, the distribution of theirpublic funds gained transparency.

CrowdCulture has a strong culturalpolicy dimension as it implies changingthe mechanisms of distributing publicfunds available for culture. In this modelfinancing of culture depends on theawareness raised in the public (crowd)which will determine the amountreceived from public budget. Such ashift of paradigms requires a broaddiscussion on cultural financing, and theinherent roles of the public and theprivate sector.

About CrowdCulture’s matchfunding model


CrowdCulture is a specific matchfundingplatform that aims at providing newforms of financing for the cultural sectorin Sweden. The underlying objective is tochange cultural financing and to end thepractice of under-resourcedimplementation of cultural projects.Individual cultural fundraising projectscoexist on the platform with co-operations called funds. The latter arebased on partnership contracts betweenCrowdCulture and public partners. Thereward-based platform involves regionaland local partners from the country interalia in charge of culture. The all-or-nothing model is applied.

Matchfunding with public regional partners

The matching process on CrowdCultureis not based on the amount raised in thecampaign but on the number of backersfinancially supporting the project. Themore backers a project gains, the higherthe share of the fund (the publicsupport) it will receive. Each campaignfor a project lasts 90 days. The platformuses therefore a specific top-up model, adynamic co-investment. Promoters areconvinced that this approach hasconsiderable advantages compared to“traditional” top-up models (50 % ofcrowdfunding topped with 50 % ofpublic funding).

The main benefit is the fact that theprivate sector often finances much morethan 50%. This reduces the public shareto a smaller amount than 50%. Inaddition, some campaigns on othercrowdfunding platforms are supportedby a few bigger private financiers whichcould ease their access to public budgets– a not desirable effect for the promoterof the CrowdCulture platform. After thetesting phase (2009-10) of theCrowdCulture platform which was co-financed and supported by strategicpartners including VINNOVA – theSwedish innovation agency, a first set ofcooperation contracts was concludedwith those authorities with indirectaccountability. Two types of regional andlocal authorities co-exist in Sweden:authorities with direct politicalaccountability like Västra Götaland (a)and authorities with indirect politicalaccountability like Jönköping (b). Thedifference between the two types ofauthorities are elected (direct politicalaccountability) or non-elected (indirectpolitical accountability) regional decisionmakers. The manager of CrowdCulturestate that this type of authorities withindirect accountability affected positivelythe duration of negotiations with thecrowdfunding platform. Every year, theCrowdCulture platform runs differentfunds (partnership agreements) withpublic authorities at the same time. Thenumber of partnerships running onCrowdCulture can vary from year to year.


To date never more than 8 partnershipswere active in one year. The contracts areconcluded for one or two years and canbe prolonged. Some authorities (e. g. theKronoberg region) have established along-term cooperation with the platform.The funds always run for one year due tothe annual budgetary framework of theregional authorities.

The partnership model of CrowdCulturecan be well-illustrated with the region ofKronoberg. The cooperation between theregion of Kronoberg and the platformCrowdCulture is now part of the regularcultural support programme of the region.The region invested around € 13.000 ofco-funding budget per year for theprojects financed on the crowdfundingplatform. This financial frame represents17% of this small region’s (192.000inhabitants) total annual cultural budget.The remaining cultural budget of theregion is spent as grants.

The main target groups for the region ofKronoberg are the smaller culturalorganizations and cultural projectpromoters from all cultural and artisticfields. The problem was – before thecooperation with CrowdCulture – thatthese organizations had only very difficultaccess to the other culture supportschemes in the region. Most of them lackthe administrative capacity to handlebigger cultural projects.

In addition, many of the more ruralmunicipalities had to face budget cutswhich resulted in the reduction of culturalproject support. CrowdCulture offersseveral services in order to supportpartners and campaigns. Some contractswith public authorities include training forthe creation of campaigns. Furthermore,the launch of a new regional fund on theCrowdCulture platform includes a so-called “launch for a fund” to reach out topotential project owners or to networkthem.

Rationale for the partnership

The platform CrowdCulture is a financingtool with a strong cultural policy ambition.It is based on the analysis that the culturalsector in Sweden depends on publicfunding. Promoters are convinced thatprivate financing of the cultural sector inSweden works only in cooperation withthe public sector. When analysing thecrowdfunding context, the initiatorsexcluded the establishment of aKickstarter-type crowdfunding model inSweden as they are convinced that thebusiness model for such a type ofcrowdfunding platform cannot besustainable in a small country with alimited language area. The current statusof the CrowdCulture platform confirmsthis initial analysis as less than 30 % of theplatform turnover is generated by themeans of percentages from successfulcrowdfunding campaigns.

Partnership model

Partnership set-up

CrowdCulture is a private initiativefounded by Max Valentin, owner of Fabel– a consultancy in the field of innovationand communication. As a matchfundingplatform, CrowdCulture has worked withpartners from the start. The foundingand testing phase in the years 2009 and2010 included partners from diversebackgrounds and experiences: VINNOVA– the Swedish innovation agency – was amain financier. The City of Stockholmcooperated to run the first campaignsand to gain further experience. TheSwedish Institute of Computer Science(SICS) was the research partner. In thestarting phase was also consideredcooperating with the national culturalministry. This idea turned out to be toocomplicated related to publicprocurement laws. The first negotiationswith regional and local authorities – incontrast – were promising from thebeginning. CrowdCulture was fullyoperational in 2011.

The main reasons for the local andregional authorities to cooperate withCrowdCulture were:

A change in the national culturalpolicy of Sweden in 2011: Eachregional authority needednegotiating individually the regionalcultural budget with the nationalgovernment. Criteria for attributingbudgets to the regions are that theregional cultural institutions workprofessionally and that the audiencedevelops. The platform owner isconvinced that a crowdfundinginitiative is an excellent tool to reachout to new audiences and that themodel proposed by CrowdCultureincreases in addition participationand democratic practice.

The growing importance of thecultural and creative industries:Regional and local authorities havetaken up the EU policy priorities inthe field of the CCIs. TheCrowdCulture platform was a tool toparticipate in these developments.


From the point of view of the regionalauthorities the most important benefitof cooperating with CrowdCulture isthe know-how-transfer regardingcrowdfunding and crowdsourcing. In theexample of the Kronoberg region, theregional authority is convinced that small

administrations have insufficient in-house expertise and can learn frompartnering with experts and innovators.The Kronoberg region aimed at findingalso a way to combine public and privatefunding and the crowdfunding platformchosen for cooperation needed toprovide free access.


A considerable number of Swedishregions have already cooperated withCrowdCulture including Blekinge,Southern Småland, Gävleborg,Jönköpping und Västa Gotaland.

The cooperation with the region ofKronoberg started in 2011 and the firstregional fund was activated on theCrowdCulture platform in 2012. Thisregion detailed also their reasons topartner with the CrowdCulture platform:This crowdfunding platform met theexpectations as new forms of culturalfinancing should be tested. The regionneeded a partner covering the wholespectrum of cultural and creativeprojects as well as complying with thelegal framework of public spending inSweden. In addition, the region expectedgaining deeper insight in these newtypes of cultural funding, to learn whichimpacts and effects are generated in themid- to long-term.

The establishment of partnerships withthe local and regional authorities was acomplicated process. The main barrierswere on political and legal level. AsCrowdCulture proposes a new model todistribute public funds, some decisionmakers and politicians hesitateimplementing this innovative modelexpecting too much social or too muchprivate influence.

Model of cooperation

The platform applies one singlecooperation model with all local andregional authorities running a fund –each one being operational for one yearwith the option to go for a further turn.Regional funds are related to budgetavailable from the regional authoritieswho can normally only commit for oneyear. Most partnership agreements lastfor one or two years. Only thecooperation with the Kronoberg regionlasts already for four years up to 2016.The regions pay Fabel consulting for theservices provided to run the regionalfund on the CrowdCulture platform. Thefunds are guided by the followingprinciples:

The financed projects must benefitthe tax payer in the geographicalarea. Therefore projects in othercountries than Sweden are notsupported.

The project needs to comply withthe competition law in the sensethat the financing of the projectmust not disturb competitionbetween companies.

The platform aims at contributing toinnovation. Therefore projectsshould involve new co-operations.

The logo of the funder must be usedon all end products.

The partnership model was not changedafter the testing phase. Modificationswere minor and influenced not thegeneral model. Cooperation partnersfrom the region of Kronoberg state:“During the last years, the region learnedhow to innovate their support systemand how to find new ways tocommunicate to the target groups. Afterthe start-up and the implementationphase, the current challenge is how tofurther innovate in cooperation withCrowdCulture and their next innovationsteps.”

Partnerships in the future

The CrowdCulture platform aims atfurther building on a positive dynamic. Agrowing strategy is stated to be difficultto be established due to theunforeseeable negotiation processes atthe regional and local level. TheKronoberg region plans to continue thecooperation with CrowdCulture and tofurther use the innovative approach forsupporting culture projects, and ifpossible to enlarge to other areas.


Impact of CrowdCulture’smatchfunding model

FeaturesCrowdCulture Total

(2011-2015)

CrowdCultureRegion Kronoberg

(2012-2015)

Numbers of crowdfunding

projects

Successful: 149

Failed: 123

Successful: 13

Failed: 3

Success rate of the

projects54,00 % 81,25 %

Number of project holders 135 16

Average size of private and

public funding raised by

the crowdfunding projects

€ 2.550 € 4.000

Total additional public and

private funding obtained

by project holders

€ 380.000 € 52.770

Geographical coverage SwedenDifferent parts of rural

region Kronoberg

The impact of CrowdCulture was analysed and the following figures have beenprovided by the promoters:


In the case of the partnership with theKronoberg region, the average publicsupport is between € 500 and € 2.100per project.

The platform manager expects thefinancial impact of CrowdCulture to belower compared to other reward-basedplatforms. Promoters are convinced thatthe added value of the platform relatesto the cultural impact and the highcredibility due to the close cooperationwith public authorities – a real addedvalue in Sweden where the public sectorbenefits of a good reputation.

The example of the Region of Kronobergis impressive regarding the high successrates of projects. The regionaladministration highlights also the addedvalue of the transparent approach andthe access to the open source methodinviting project holders to talk abouttheir plans and to invite people to join

Impact on the project holders

The impact on project holders is notlimited to the access to financial means.The platform owners report that theproject holders benefit very much fromthe fact that the platform is specializingin culture only. The campaigns onCrowdCulture gain specific attentionfrom important cultural stakeholders inSweden. Max Valentin, CrowdCultureowner states:

“A campaign launched by a small localtheatre group was spotted by thedirector of the national theatre and theninvited to perform on one of theexperimental stages in Stockholm”.

Successful and unsuccessful projectholders report in addition that theCrowdCulture workshops are very usefulfor the further development of theirprojects. In addition, the project holdersbenefit from the crowdsourcingapproach, from the need forcollaboration and from the requirementto communicate.

Impact on the backers

An in depth analysis of the backersprofile on CrowdCulture is not availablefor the whole platform. The platformowner analysed the profile of thebackers in the Kronoberg region: Most ofthe backers of the projects co-funded bythe region of Kronoberg are familymembers, friends, co-producers andexisting clients of the project holders.

The profile of the backers relates to thesize of the project and to the regionalcontext. An outreach to more strategicinvestors becomes not visible.



Impact on the public partners

CrowdCulture generates positive impactson the regional public partners. The localand regional authorities launching fundson CrowdCulture are proud of being partof the new economy. The cooperation isoften highlighted at regional conferencesand events contributing to a “fresh”branding of the areas concerned.

The CrowdCulture model is also a tool tocontribute to the transparentdistribution of public funds.

Due to the positive experience of someregions with CrowdCulture, multipliereffects can be expected in the fields ofinnovation and business support.

The impact on the involved regionalauthorities is positive as the partnershipcontributes to a modernization of thepublic sector.

Impact on cultural funding

The overall impact of CrowdCulture oncultural funding in Sweden is very small -in terms of budget spent for culture bymeans of the crowdfunding platform, aswell as regarding the geographicalcoverage – especially when taking intoaccount the five years implementationtime. However, each additional privatecontribution to support creative projectsis of added value. CrowdCulture reachesout to mainly small projects with anaverage volume of € 2.400.

It cannot be expected that these fundingvolumes will also cover the costs relatedto the campaign and to the projectimplementation (e. g. an appropriatesalary from the cultural projectpromoter). This interlinks with thequestion of how crowdfunding modelsinterfere with good labour practices(Bannermann, 2013) – an especiallycrucial topic in the cultural sector wherelow-income situations persist for manyartists and cultural workers. The closecooperation with public authorities is ofadded value in countries where theadministration benefits from a goodreputation.

Critical success factors of the platform and partnership model

Objectives. CrowdCulture has a strongcultural policy component. The mainmotivation of the involved partners is asustainable change in the financing ofcultural projects. Participation,transparency and equal access to publicmeans for culture are very important forthe platform owner and the partners inthe regional authorities. It links thereforeto the wider discussion on the meritsand limits of crowdfunding and the rolepublic authorities and public financingshould play as well as potential marketdistortions inherent to the differentmodels (Bannermann, 2013). The openadministrative culture of the country(Sweden) might play a crucial role for thesuccess of the applied model. It is alsoan attempt to provide an easy accessiblecrowdfunding instrument for a smallercountry and a limited language area.

Broad engagement of public partners. Inorder to establish sustainablepartnerships CrowdCulture manager isconvinced that the cooperation with thepublic partners requires a broadengagement in the relatedadministrations and at the political level.More than one single person mustsupport the cooperation with thecrowdfunding platform.

From the point of view of a regionaladministration, the policy objectivesmust be very clear. “In our case,” statesSunny Sandström, Head of department“Regional Development, SustainableGrowth” from the region of Kronoberg,“the cultural policy neededmodernization and the funding for smallprojects and organisations required anappropriate funding model. For us,transparency and open sourceapproaches were pre-conditions for thecreation of the new funding tool.”

Duration of the partnerships andsustainability. In order to generatesustainable effects the cooperationbetween the platform and the regionalauthority partner should last more thanone year. Awareness raising activitiesabout the new funding opportunity,training and dissemination of goodpractice examples need sufficient time.

The annual changes of co-operationpartners generate a context ofuncertainty for the cultural sector. Thelimitation of annual funds due to theannual commitment of the partners inthe regional authorities causes hightransaction costs.


Trainings for the cultural sector lack amore strategic approach and seemdepending on the will and interest of theco-financing partners only. The learningneeds of small administrations and localauthorities are addressed in a randommanner and not specifically targeted bythe platform promoters.

The establishment and the sustainabilityof the partnership contracts dependmainly on the regional decision makers(policy and administration). A longerterm cooperation agreement would havethe benefit of a more stable frameworkfor project holders. It could also generatea positive context for training andnetworking. An inter-regional strategy(different from an internationalizationstrategy being on the agenda of severalcrowdfunding platforms – RAMOS, 2013)which could mobilise backers fromdifferent European regions was notraised as a potential growth strategy forCrowdCulture.

Framework for crowdfunding campaigns.The framework for crowdfundingcampaigns on CrowdCulture is strictregarding the duration which can causedisadvantages depending on the natureand related time plan of the culturalproject to be financed.

Relying the public match-financing onlyon the number of backers is a difficultcondition: it signals that especially theprojects able to mobilise the largestnumber of backers are those deservingthe most of public support.

This is contradictory compared to thecultural policy objective to use publicfunds for innovative and experimentalartistic and creative initiatives that mightnot be financed by the market, aspromoted by many culturaladministrations in Europe.

Many matchfunding platforms apply a50:50 model involving equals parts ofprivate and public support.CrowdCulture promoters argue that theirmodel will generate higher privatecontribution. This argument is not fullyjustified as each platform and publicfunding partner would be free to decideon the percentage to be co-financedfrom public means. The related share ofpublic support could be therefore alsobelow 50%.

Intellectual property. The question of IPprotection of and the public access tothe produced cultural outputs is notaddressed. As the implementationbudget includes public budget, which isthe policy to ensure public access to thefinanced cultural products and services?


Overall conclusions

CrowdCulture’s partnership model is aninteresting model of involving regionaland local authorities with innovation andmultiplication potential for themodernization of local and regionalauthorities. The cultural policydimension of the project requires furtherdebate. As it changes the overallfinancing model for culture, this type ofcooperation causes considerable fearsand barriers from the decision makersand the cultural sector. This new modelrequires a broad discussion on culturalfinancing, and the inherent roles of thepublic and the private sector. Recentrelated publications from the publicsector still question the possibility of awider impact of crowdfunding oncultural funding (Compendium CulturalPolicies, 2015). The Swedish Agency forCultural Analysis warns “that privatefunding for culture in Sweden is likely toremain low for the immediate future,

and that all artistic and culturalendeavours do not have the samechances to attract private funding (…).Such funding (sponsorship andcrowdfunding) for projects in many casesrequires that basic funding is available.”

The impact in terms of private fundsraised, new backers (beyond the culturalsector) and geographical outreachshould be enhanced with an appropriategrowth strategy and accompanyingactivities.

Training needs for the creative sector areto be addressed appropriately and mustinclude measures to overcome gaps indigital skills to ensure an equal levelplaying field for all potential projectpromoters. The cooperation with theprivate platform owner is subject topublic procurement which might be adifficult task in smaller countries withonly one or few platforms operating.



Case study author: Sylvie Amann, inforelais

Layout: Jessie Pieters, IDEA Consult

Photos: CrowdCulture, Shutterstock

Do you have questions after reading this case study? Contact the Crowdfunding4Culture project coordinator: Isabelle De Voldere (IDEA Consult), [email protected]

Project partners:

This case study is part ofthe EU funded projectCrowdfunding4Culture.

This case study was elaborated in 2016 based on interviews and information avalaible at that time.

mailto:[email protected]

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