IMPACT

Crowdfunding In Canada: Canadians Generate Money For All Sorts Of Causes

07/26/2013 05:00 EDT | Updated 09/24/2013 05:12 EDT
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Crippled by mounting financial debt, father and son duo David and Brian Best had few options left to save the potato farm their family has operated in Tryon, P.E.I., since the early 1930s.

It was a customer who dropped in to Best Acre Farms to buy seed potatoes that sparked the family's current bid to save their livelihood — crowdfunding.

"I told him I was pulling strings to find out how I can source money, and he said, 'Well, you might try crowdfunding'," said Brian Best.

Best did just that, and without a crop in the ground, he has dedicated much of his time to the online campaign, which aims to raise $200,000 by Aug. 1. As of Thursday, the campaign on Indiegogo.com has generated around $8,000.

"The people that are grasping it ... know how important a family farm is to producing food," he said.

Websites like Indiegogo.com are drawing people from across Canada to crowdfunding, and the types of campaigns they fund vary widely. Whether it's building a school in Africa or trying to securing the release of an alleged video that appears to show Toronto's mayor smoking crack cocaine, the possibilities are endless.

Regardless of the cause, the components of a successful crowdfunder often remain the same, said Sandeep Pillai, a graduate student at the University of Toronto's Rotman School of Management who has studied crowdfunding.

"That ability to engage people ... is very critical in a crowdfunding campaign. Let it be a potato farm, let it be a solar watch, let it be a coffee down the street, whatever it is," said Pillai.

"When a crowdfunding campaign does not become successful, it's because you were not able to engage the crowd."

Pillai said the idea of crowdfunding isn't new, but its accessibility is.

"It's a sign of the times," said Pillai. "There's a venue to do it, before there was not."

In Halifax, residents can see the success of the Brooklyn Warehouse's crowdfunding campaign as they drive past the restaurant in the city's north end.

About two years ago, co-owners George and Leo Christakos crowdfunded $23,000 over 60 days to avoid the bank and expand the restaurant.

George Christakos said aside from the obvious financial benefit, crowdfunding also doubles as a marketing campaign.

"It is an incredible way to create awareness and marketing for an upcoming project," said Christakos. "You're able to give a customer a lot more. There's a tremendous value to it."

Pillai agreed, saying that anyone who contributes to the campaign is already a customer without even having stepped into the business.

"The crowd is also having more of a say in the products that are being developed," said Pillai. "It's the best way to get feedback from people."

Earlier this year, Christakos undertook another crowdfunding effort to replace the restaurant's kitchen. He used a blog to inform his customers and provide updates on the progress of the campaign and renovations.

"When you're asking people for money, I think you have to be really respectful and professional," said Christakos, adding that the campaign garnered about $14,000. "We felt that being transparent was a good way to educate people on how this is a viable way to raise funds for a business."

Pillai said successful crowdfunding campaigns have a goal and an end result that the potential contributor can easily grasp.

"It is absolutely critical that when you set up a campaign, you define the goal," said Pillai, contrasting Christakos' kitchen renovation with a fundraiser to "cure world hunger," for example.

"The crowd has to understand what the product is, and you must ask, 'Is this something that you can get people passionate about?'"

David Best is hoping enough people share his passion for potatoes. He says now that a mortgage sale that was scheduled for earlier this month has been put off, the family is focused on paying down enough debt to plant a crop next year.

"If I lost the farm, I would have worked a lifetime for nothing more than something to wear and something to eat. That's all I would take with me. That's devastation with a capital D," said the 73-year-old man, who has worked on the farm his entire life.

"We're hoping (the crowdfunding campaign) will help get things lined up for another year, but time will tell."

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