Are Patrons Okay With Half-Assed Funding?

TL;DR: I see all the proposed goal-based versions of the crowdmatching mechanism as requiring most projects to pass through a certain state. Namely, the state where they are getting some money, but not yet enough to produce results that (e.g.) patron X can see or feel – while at the same time getting from patron X more money than she is honestly willing to give up without having results she can see or feel.
In fact, stagnant-goal projects can remain in this state indefinitely.

It’s reasonable to assume that patrons are fine with contributing a “negligible” amount of money (as in the classic “it’s only 10 cents a month!” examples) to a cause that might take off. Likewise, thanks to Kickstarter et. al., it’s reasonable to assume people are willing to contribute significant amounts of money to a project when it’s needed to achieve significant things. But what about all the other scenarios in between?


Allow me the simplification of splitting prospective patrons into two types:

Type A

Purely altruistic. The defining characteristic being, that this patron is perfectly fine with “donating” a non-negligible amount of money into a project, from which the patron sees negligible results.

Type B

Motivated by altruism and results. These people want to see certain growth and changes in a project, and are willing to put a generous amount of their money into realizing these changes if it means achieving these results (at a minimum).


With that said, this discussion is exclusively about Type B people. But how big of a portion have I just ruled out? Not much, I’d argue. Perhaps this project is run by a statistically unlikely portion of Type As, perhaps not. Regardless, I think most crowdfunding comes from Type B people, the “everyone else”. (In practice - regardless of whether it “should” be that way.)

Hi, I’m a real patron

Personally, I am a Type B! I have participated in several crowdfunding campaigns, and none disappointed me more than this one, where the project took over $500 of my money and gave me, and all of the other backers, NOTHING in return. I got burned, and to be honest have not participated in crowdfunding campaigns ever since. To be clear, I knew I was essentially gambling, and this is a well-known risk of crowdfunding.

So here’s what I want to know

But just think, I took that risk, assuming the funding goal was the amount that was guaranteed to be “enough” money to achieve what they set out to do. (Which it was, in this case the problem was not lack of funds but a failure to ship.) Even with that guarantee, I got burned. So my question is, is it reasonable to expect people to be willing to contribute significant amounts when the output is NOT “guaranteed enough money” – or worse – “guaranteed NOT enough money”?

That’s what is happening when e.g. a percentage-based system is indefinitely pulling a significant amount of money from your account because it calculated that the project is “50% toward its goal”. I suppose the amount someone wants to give for 50% progress towards the results could conveniently be 50% of the amount they would give for actually 100% getting there… but I doubt it! For most of us, it’s far, far less.

The Discomfort Zone

But if, say, you’re comfortable giving up to 5% for no results (because you want to just sustain the project as-is, and/or that amount feels negligible for your wealth status) out of the amount you’d give to actually achieve the goal 100% (actually let’s even say the project can pull it off with 95%, because they wisely shot high in their goal) then that still leaves us with 90% of the time you are giving more than you’re comfortable with. Yikes! (And if they never get there, it’s effectively forever! Until you wise up and back out, of course.)

All the ways goals can turn out

Of course that’s assuming a perfectly linear progression. We have no idea how the graphs will look in practice. But I do know that project goals must play out in one of these ways:

Ideal 1: A goal is fully funded right away.
Ideal 2: A goal is partially funded, and will hit 100% reasonably quickly.
Stagnant 1: A goal is partially funded, and keeps gaining support, but will take unreasonably long to hit 100% (as in, not soon enough for prospective patrons to care).
Stagnant 2: A goal is partially funded, and will stay there, because support is continuously lost as much as it is gained (or goes nowhere at all)
Stagnant 3: A goal is partially funded, but keeps losing support.


Note that 4 out of the 5 possibilities involve the project being only partially funded. This isn’t proof, but I think it’s also intuitively obvious that most projects will be incompletely funded most of the time. This is especially true in systems that move on to the next goal as soon as the previous one is reached. (Not true for goals-as-separate-projects mechanisms, but they actually have the problem described in this post way worse.) Do we agree on that intuition? Let me know.

Note further that only 1 of the “partially funded” states (Ideal #2) is any good. The rest (which I call stagnant) are slowly sucking money out of Type Bs and trapping us in the “discomfort” zone. If no one leaves because of this, everything’s fine I guess but trust in the platform is still eroded. But people probably will leave, in droves, as they slowly and individually realize what’s happening. (This could result in a feedback loop of renewed support, bouncing the graph up and down indefinitely, effectively funneling a project into the “Stagnant 2” state. If this happens a lot, I suspect we are artificially inflating the number of stagnant projects as crowds try to wrestle their way out of the discomfort zone!)


Counterarguments

“Even small amounts will eventually add up!”

Yes, specifically for a project’s one-off expenses, we could just ask the patron to be more patient - since we’re talking monthly, half the goal amount (for example) could still afford us that new guitar if we simply wait twice as long! But there’s no saying for sure that patrons will want to do this.

Otherwise, this argument falls flat on goals that will pay recurring expenses, which is kinda what Snowdrift is all about. If you only make $40 a month, you’ll never be able to afford that $50/month server, no matter how long you wait.

“Projects can just supplement it with their own income!”

With this ask, projects run by multiple people need to decide how to split up the financial burden (or decide who will bear it all). Even if that’s not a problem, or if we’re just talking about a single artist, you’re moving that from “a big ask” to “a moral obligation” on the maker’s part, if they want to avoid any accountability issues from the lack-of-results problem described in this post.

Sure, as a maker maybe you can spare your own money for your passion project this month, as you have many other months. But are you willing to do that indefinitely? (Answering “no” is likely what drove you to crowdfunding in the first place!) (If definitely “yes”, then you are maker who could nearly afford to achieve your goal without crowdfunding at all - you may not benefit, but will not be harmed by alternative systems that are optimized for makers that can’t afford that.) And yes, it needs to be indefinitely, because the Type Bs who continue to give you money indefinitely, enabling your progress, are doing so under the impression that you will, you know, actually progress.

Oh, and what if you become suddenly unemployed, etc.

“They may not be able to fully afford XYZ yet, but they can use the partial amount to at least afford X!”

That’s fair! …but recursive: I say, the first “goal” should be X, then. Loop back to the top with that first subgoal as the new goal, and bam, all the arguments still apply.

XYZ can come later. In this post my usage of “goal” refers to the smallest usable amount. Where “usable” is judged by whether the patrons notice a difference. Call it a microgoal, if you must. I realize that I’m arguing for discrete amounts rather than a continuous scale of usefulness - but that’s how most expenditures work, and it’s how most patrons will think.

“But any amount is helpful!”

“That’s nice”, says Type B contributors. This argument is all about giving, but not getting. Even if a project can prove this (many can’t), you’d only convince the rare Type As. Let’s rephrase:

“But any amount is always useful to the project”

Ah, that’s even harder to prove. I realize that some projects – e.g. @wolftune as an independent artist – feel this way. You were going to buy a new guitar anyway, perhaps, but now it’s 50% off thanks to your generous fans! However, I doubt most small projects will think this way. And you’re still probably relying on the “supplemental income” factor mentioned above. And even if a project thinks this way now, they may eventually run out of ideas, and just want to get to the stated goal already without indefinitely coming up with intermediary expenses that hopefully appease the uncomfortable-zone crowd.

(There are also other ways to achieve this. For example, “pay for 50% of my next guitar” could be made into an earlier explicit goal, if you’re so sure that you’re able to pay the difference and don’t want to wait for success.)

Perhaps you find none of those problems convincing, and still believe the project will make good use of “any amount”. Here’s the catch: none of that matters! It’s how the patrons feel about the spending that matters. So even if some portion of creators are okay with half-assed funding, the crowd (the overwhelming majority of future Snowdrift users) doesn’t necessarily care. And they’re the ones paying for all this! So we need a patron-focused argument:

“But any amount is always useful in the eyes of the patron!”

No, that just isn’t true. Especially not “any amount”, and especially not “always” - yet those qualifiers are critical for making this a solid defense. Even if you think there’s some situations and/or partial amounts that are acceptable to patrons, you are admitting that there are some that aren’t, which means we still have a problem! Here are some more problems:

  • It is well known that the utility of money - how much you get out of a single dollar - goes down and down dramatically as you’re tasked with spending more and more dollars at once. A million dollars is not 10 times more useful than a hundred thousand dollars. This is another reason to feel worse and worse as you are taken further into the discomfort zone – this non-negligible monthly amount gets less and less worthwhile even for the project.
  • That also means that you could have funded that other project, who today happens to be $5 away from an actual goal, with the extra 5 dollars you just sank into this 20% funded project thanks to the automated system. Perhaps you log in to Snowdrift at the right time to catch this and redirect the money. Perhaps you don’t.
  • Let’s say there’s a community rule, that with an explicit goal comes an explicit spending plan - a “here’s what you’ll do with the money”. Projects are accountable to that plan. Well, only if they’re fully funded, that is! If they’re partially funded, yet still expected to make use of the money, they get a free pass to ignore the plan (which they can’t afford) and instead spend the money however they like. What other choice do we have, ask them to make a separate plan for every possible intermediate amount?
  • Patrons that want to contribute to upgrades to your project, not bills from your skydiving course.
  • etcetera

“But the Discomfort Zone is smaller than you think!”

To be fair, there are situations where it may not exist at all – again, it only refers to times when patrons are charged more than they’re willing to give for no results, but are still getting no results. (This is of course different for every patron in practice, we’re speaking in averages.) Theoretically you could have the opposite, where the project makes good use of money while each patron still feels the amount they contribute is negligible. That would be great! But without significant mechanism changes, it currently only really applies to the very bottom of the spectrum.

In any other case, it does not matter how wide the discomfort zone is, only how long we’re stuck in it.

“But the Discomfort Zone will be over quickly!”

Not likely! This is only guaranteed for “Ideal #1” projects - that’s just one of the 5 possible states! In the 3 Stagnant states, the opposite is true. Not great odds, regardless of how many projects fall into each state in practice.

And as far as Ideal #2, that’s not necessarily true either - even for narrow discomfort zones. Something like this could happen:

There is a certain church near me, that needs to get a new organ, and they’re soliciting donations to get one, and announcing how much they have already collected. It really didn’t take them long to reach 95% of the amount needed to get the organ… but since, there the notice has sat, week after week, waiting for that last little bit to come in. Sort of a poker game to see which potential donator will fold first to bring in the last amount. Just something to think about.

– True story from a comment on QuestionCopyright.org

So, we may in fact get stuck in the discomfort zone as a result of natural human psychological
phenomena. If that story continued over many months, and happened with recurring donations instead of one-time donations, it would be a lot more tragic than a donation box collecting dust.

Also note that this is not the low-end of the zone, but the high-end, so this could be A LOT OF MONEY for no results - many times more than the equivalent amount of time stuck in the low end.

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Great post, definitely lengthy but brings up a lot of things to think over. I’ll let them stew and hopefully come to some conclusions over the next week. Thanks!

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One thought I have about this is that the patron is in control of their pledge, so if they feel uncomfortable about the project’s progress, they are always free to unpledge or reduce their pledge. That’s the theory at least, but I think you bring up an important question of to what degree some prospective or actual patrons may worry that despite having that control, they’ll end up donating money that in retrospect they regret donating. If we find that to be the case, I think there are various things we could do to reassure people. For example, some auto-renewing subscriptions offer an option to “remind me 3 days before” so you can be reminded to consider canceling. Along those lines we could offer options to be reminded to review the project’s progress and reevaluate your pledge every 6 months etc.

Another thought is that Snowdrift.coop as a platform is aligned with the “Type B” patron’s desire to have money go to successful projects, not stagnant projects. So whereas individual projects might well be motivated to encourage patrons to keep donating indefinitely despite ongoing lack of success, Snowdrift.coop as a platform will be motivated to support patrons in directing their donations to successful projects where the funding really makes a difference and crowdmatching really results in crowds growing and funding goals getting met.

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If a project is already paying for a $50/mo server and the volunteers who manage it are paying out of pocket, $40 is about minimizing their losses.

So, that’s just a concrete example for the core vision I have: we are not (repeat: NOT) focused on speculative projects that have no product yet! We could add that sort of thing later, and it’s trivial: offer an option for projects to collect pledges but not turn on funding at all until a minimum useful level is hit (that bit from wiki article is nearly as old as Snowdrift.coop).

I agree with @msiep the whole point is that it’s not all-at-once, it’s monthly ongoing, with accountability. Anyone hesitant to pledge can keep hesitating. Anyone can drop at any time. It’s safe to be cautious.

If a project really has real thresholds where an amount is needed before some progress is possible, this should be expressed transparently and we can offer some pause/on-hold function. For many (most?) FLO projects, they exist on this spectrum where they are already doing non-zero and extra funds lead to some mix of less burn out all the way to major improvements. All this should be expressed. I.e. the status quo of the project should be easy to understand.

It’s fine to have all these speculative concerns, and I basically agree with you completely about the dynamics (people taking a gamble, feeling burned, taking less risk later, etc, everything you said). But while they have some impact on the mechanism design, the core point is simple: we develop the transparency, goal-setting, and so on in conjunction with real projects. We will not launch with speculative projects that might be getting modest funds and showing no results. We will recruit only projects that are already showing results but where financial need threatens their continuity (people burning out etc) or their ability to thrive and reach greater potential.

In short: Patrons will be okay with half-assed funding as long as they get half-assed results at a minimum rather than no results. We want patrons to always feel they are getting their money’s worth (ignoring the comparison to “I could be freeriding…”).

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You’re right! And I am predicting that is exactly what some patrons will do while in the discomfort zone, while at the same time, some newcomers see a project already half-funded and want to join the ride up to 100%. In other words, in the discomfort zone we may often see a pattern of thrashing. Some people “giving up” while a similar amount of people are jumping in (are they going to recognize a stagnant project/goal when they see one?).

Thanks for the suggestions. If we have to live with this problem, let’s hope those reassurances are good enough.

I assume you mean not the platform(/mechanism, which is not “motivated” itself) but the people running it? As in, we’ll announce to the patrons, “hey everyone, this project isn’t going well, might want to put your money into X or Y instead” or something?
My biggest concern is that many snowdrift patrons will treat their contributions as set-and-forget, like all the other automatic monthly subscriptions in their life. Personally I’m not sure I want to monitor the status of all the projects I’m contributing to every month… but then, I’m not motivated by watching the stock markets go up and down either :stuck_out_tongue:

Sure… IF. But we’re not trying to be the sole source of income for projects either (yet), and certainly for most of our initial projects, we probably won’t even be the most significant source of income. Their existing crowdfunding solutions, then, do a pretty good job at taking care of the “minimizing losses” phase, I’d say. For example, $40/mo can come in through Liberapay just as it can through Snowdrift.

If you’re interested in helping minimize losses, it’s less likely to be a “but only if other people do it too” thing. So I foresee crowdmatching not doing much for that phase (vs. traditional solutions).

And yet, that is exactly what goals are within a project - they’re effectively “speculative” sub-projects. Snowdrift is about growing projects, and the mechanisms are designed to grow projects, no? So most of the usefulness is about turning project potential into reality - wherever that potential may lie.

I’d argue, that’s pretty much all of them. You just have to think of “progress” in terms of “Just Noticeable Difference”, if you will. Because in my opinion, patrons want to make a noticeable difference. Period. With that in mind, it’s easy to find “real thresholds” everywhere.

You make a good point that this is harder during the “minimizing losses” phase. But once you get out of that phase (e.g. pass $50), the project still has most of its future ahead of it! That phase is small in comparison.

I have trouble believing that this will even close to “most” projects once Snowdrift gets going – I think it will be a minority.

Yes of course.

How are these categories so different? If the pre-existing projects are “already getting results”, it’s not because of snowdrift. The dilemma proposed in this thread defines “results” as those directly caused by snowdrift funding, not success due to outside forces. In that frame, a project with only pre-snowdrift “results” is in the same position as “projects that might be getting modest funds and showing no results”. I’m not sure the “speculative” bit really matters. We can eliminate the “speculative” projects for now and we still have the same problem: You either are minimizing losses (and it’s debatable if that is a “result” the patrons will even notice, let alone be motivated by)… or you’re in the other 80% of the lifespan as you mention here:

Which is pretty much every project ever. But yes, that describes the phase to which the “half-assed funding” problem applies.

And for the “minimizing losses” phase, crowdmatching actually holds back funds from a project, simply due to it being unpopular on our site. Even if there’s a bunch of people in the crowd willing to give monthly amounts totaling $50 - even for as little/intangible results as “burnout likelihood went down” – we do not let them! We keep them at something tiny like $0.10, like everyone else. By the time the matching gets high enough that the “I want to minimize losses” crowd pays out, the rest of the crowd is also paying a lot too, and the project is already out of the minimizing-losses phase!

Yep! But that won’t happen. Or at least, any results that come, weren’t due to snowdrift. If you can think of a counterexample, let me know. But I can’t – not without resorting to counting altruistic good-feelings as enough to be considered “half-assed results”.

I guess what I’m saying is, if all you get out of your contribution is “well burnout is less likely now” or “well they have less losses”, then that’s not so different from “no results” like you said. Is it nice to do this? Yes of course - but crowdmatching doesn’t really seem to help that happen anyway.

If a project is still minimizing losses, it’s probably not yet in the discomfort zone. Crowdmatching just doesn’t give much at first, by design.

I started this thread because I was hoping for potential solutions to the half-assed funding problem. I wish it attracted more of those. But, I have come up with one myself, so I’m going to plug it here.

See Critical Mass mechanism.

With this solution, the minimizing-losses phases is handled the traditional way, which can’t be beaten in terms of effectiveness: everyone that’s willing to give money to sustain the project, gives it. Not some of it, but as much as they’re willing to give. Right away. This is an adjustable monthly base pledge.

The rest of the project’s lifecycle (achieving potential) is realized by forming a pact with enough others to afford a particular goal. There is never any half-assed funding, and contributing always has a noticeable effect!

They don’t though. Whatever is feasible from other options exists as the status quo against which we are aiming to add funding. What we don’t care to do is just to capture funds that otherwise would still be there but just through another tool (though even that has some benefits around our political/ethical focus in some cases). As long as we end up getting an extra $40 they weren’t getting otherwise, we’re still minimizing losses. Most FLO projects are still at the minimizing-losses stage, and the amount already supported by any existing donations is not reaching 100% of loss coverage.

I don’t see the basis for this claim. If the risk is that the pain of losses leads to burnout and stagnation of the project, I still don’t want to come along and be one of a few people trying to keep it going. I’d much rather be part of a sustainable crowd that keeps it going reliably and at little cost to me.

That’s not an opinion, that’s a hypothesis. I accept that patrons all want to see a noticeable difference. I support the idea that if patrons feel some months go by without seeing progress, they should consider dropping their pledges. That’s the accountability part that we’ve been emphasizing all along.

Note that our current situation is unique. Patrons who check are disappointed to see little visible progress on Snowdrift.coop. But they also haven’t ever actually donated even a penny, and we haven’t finished making a good enough pledge experience to even really announce the working system. So, everyone is still waiting to see what will happen when we actually have a complete alpha experience and announce it. The hope is that it will quickly get to a substantial enough level and support real progress from there.

It could instead be this: crowdmatching reveals the held-back funds that were always being held back anyway. Crowdmatching will be a failure if it ends up only capturing patrons who were otherwise donating and they pledge the same as they would have unilaterally given. The whole point is that the “held back” funds in crowdmatching were not otherwise being donated at all.

As to the idea of avoiding “half-assed funding”, I really am still skeptical of the whole framing. Consider the direct metaphor of the snowdrift and public roads. Half-assed funding for snow clearing which sometimes clears some of the snow maybe with a lot of delay, at least on days that are too bad… people might complain and not be “okay” with it, but people also don’t just want to drop it all and have no road maintenance ever. And it can totally happen that no adequate group of generous volunteers or donors wants to step up and put in an unfair unilateral amount of their time and money to get past the half-assed point. Half-assed funding may not be good, but it’s better than no funding. Roads with potholes and long delays for snow clearing are still better than no roads.

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