Today many artists and inventors and businessmen rely on donations. But a system where the donation is rewarded with shares would be better.
Then, if the business eventually becomes successful, they will get back dividends. It’s a much more inviting concept. Having shares in something really makes people loyal, in a way that being a donor does not. It would generate much more money IMO.
Patreon (or the ethical alternative whose name I forget) could add this option without much difficulty. The new relationship would be a powerful improvement. It would lead to more and better-funded independent projects everywhere.
A “donation” is something where you don’t expect to receive an exclusive benefit from it in the future. An investment is something where you do expect (or at least hope) to.
Donating to an artist you appreciate generally makes sense. Investing in them only makes sense if you expect them to use your investment to create future revenue (hopefully from sources other than donations and more “investors”!) which you want a piece of.
All true. That’s the traditional perspective and it’s 100% correct.
But there are (successful) hybrid models where it’s not so clear cut:
- For many charities, you donate a fixed amount and in return you get magazines and stickers and things.
- Many vloggers publicly print the names of their donors - the fame/pride is a different type of reward. It’s getting closer to an advertising model, where the donation wins you publicity.
I’m sure there are other examples. The point is, people donate more when they feel like they’re getting something in return, even if it’s intangible or minuscule or free.
I’m proposing a new hybrid model, where the thing they feel like they get back is a small chance of future return in the distant future. If you’re into traditional investment, it’s the same rationale behind giving share-options to employees.
Such a system exists, the people who do that are called Venture Capitalists, Seed Fund Investors, etc. That is called equity.
Yes. I want that model to replace the donation model. I want easily-acessible popular fund-raising platforms to add that model as an option. Or for a new platform to do it.
Most donation based things are loss making. They just consume money. You can mail them and ask for giving money in exchange for a stake in their organization.
That’s okay. Nearly all of the valuable things in this world are loss making. I donate to some of them myself. It’s not so important whether they eventually become profitable or not. It’s that the donor will be more motivated to donate, and to donate more and more regularly.
Interesting. The issue here lies in decision making. The person with majority equity stake can enforce their decision in the company. The solution to this ofc is to take away voting rights and divide equity into voting + economic shares and just economic shares. Then distribute the economic shares to the donor.
That’s one of the choices alright. TBH I’m not talking about literal IPOs. That already exists and there’s too much faff involved, which is why nobody is using it for this purpose. The way I envisage it (though maybe this can be improved on) it would be more like a paid membership. It wouldn’t even be legally binding.
You could do votes/surveys among the donors, where voting power is proportional to payment. It would be an extra fun thing to make people happy to invest, like how there is often free merch or priority tickets etc.
I think if you donate money to someone who makes free software and you have an issue or feature request or anything the dev likely at least considers it.
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Liberapay
Yes thanks
