Crowdfunding for Theaters: Tailoring Campaigns for Local Impact
Producing elements of an artistic nature such as theater pieces, musicals and plays, where the form is more important than utility, takes time and financial resources. In the case of theaters, earnings may come from sold tickets, subsidies from the government, or donations of philanthropies. However, to prepare the project, the initial source of funds is still required. So, where can these investments come from?
Crowdfunding introduced another source of funds for theaters. According to Katherine Boyle of the Washington Post, Kickstarter alone raised in 2013 more money for arts than was given by the US Government’s National Endowment for the Arts. Since then, the crowdfunding industry has evolved and become a powerful tool for raising funds for non-profit organizations.
What you will learn in this post:
Crowdfunding types for theaters
Crowdfunding for theaters is represented in all its forms:
- Donation-based, when people provide funding without expecting financial benefits in return.
- Reward-based, when people are rewarded with free tickets, mentions on the theater website, mentions on social networks, or other perks.
- Equity-based, when investors get a share in the profits made by the piece they’ve sponsored, are given credit on the production, and similar.
Donation and reward-based types of crowdfunding are commonly used to raise financial support for theaters, as is in the case of the Save Our Theatres initiative by the Theatre Trust and Crowdfunder. Equity crowdfunding is typical to raise funding for Broadway shows and allows investors to get a share in a project’s profit.
Some of the examples of crowdfunding campaigns for theaters are given further.
Equity-based campaign for producing The Pajama Game musical
The Pajama Game crowdfunding campaign was run on Seedrs in 2014. Along with a share of profits made by the musical, additional rewards were offered such as:
- For investments up to $500, investors got an opportunity to win one of 10 pairs of tickets.
- For investments from $500 to $2,499, investors would get a guaranteed pair of tickets.
- For investments from $2,500, investors would get a pair of tickets for the opening night performance and a post-show party.
The Pajama Game Musical required a capitalization of £1.4 mln, a part of which was raised on Seedrs (£200,000), and the rest was collected from external investors. The funds were collected to cover production expenses, salaries, theater expenses for publicity and advertising, and other musical-related expenses.
Seedrs’ investors and external investors could participate on the same terms, only producers were receiving slightly preferential terms.
Investors were receiving a share of the remaining net profits, and distributions started after the initial run of 20 weeks was completed.
A crowdfunding campaign for Soo Theatre Project in Sault Ste. Marie
More than $85,000 from 162 investors was raised in a locally run donation-based crowdfunding campaign to make the Soo Theatre and the surrounding public space more accessible by replacing historic storefront entries and improving public walkways.
The Soo Theatre has a long history of providing free events to the public. The campaign was launched on August 21, 2023, on a local crowdfunding platform Patronicity for the theatre to get a matching grant provided by the Michigan Economic Development Corporation. The funding goal of $50,000 was reached by September 25 and until the end of the campaign on November 20, 2023, over $25,000 more were raised.
The theater has already completed the installation of new storefronts and continues with the projects mentioned in its pitch.
SaveOurTheatres, a donation-based crowdfunding campaign by Crowdfunder in collaboration with Theatres Trust
The reward-based crowdfunding campaign was launched on Crowdfunder in collaboration with Theatres Trust to provide financial support to the UK theaters affected by Covid-19. The campaign was launched following the success of a similar crowdfunding campaign called Save Our Venues organized in collaboration with Music Venues Trust.
The funds were used for:
- Advisory services offered to theaters to help them survive the crisis
- Helping theaters with the costs of preparing their buildings for reopening.
- Organizing their day-to-day operations.
For example, some of the expenses breakdown look like this:
- Installation of electromagnetic door hold open devices – £5,000
- Covid-19 risk assessments – £5,000
- E-ticketing equipment for paperless tickets to avoid contacts – £5,000, and similar.
The campaign is still running, and for now, almost £56,000 has been raised from 259 supporters. One can donate any sum starting from just £5. The rewards offered for donations are:
£5 or more:
- A prize draw to win a pair of tickets to Mamma Mia!
- A prize draw to get a Modern Theatre Architecture Book Bundle
- A prize draw to get a book London Theatres
- A prize draw to win a pair of tickets to Only Fools and Horses.
$20 or more – a pack of 5 postcards depicting the most beautiful theaters in the UK.
$50 or more – a Friend’s membership, including 3 issues of the Theatres Magazine, a membership card, an opportunity to attend events, and an acknowledgment in the Theatre’s annual report.
$1,000 or more – an afternoon with the leading playwright and director Alan Ayckbourn, includes lunch, visiting his latest play, and a tour of the Stephen Joseph Theatre in Scarborough, with hotel accommodation included.
Top crowdfunding platforms for theaters
Along with such famous platforms as Kickstarter and Indiegogo, there are platforms focused specifically on raising funds for theaters and shows. Here are some of them.
The Broadway Investors Club
The Broadway Investor’s Club (TBIC) is an equity-based platform that specializes in raising funds for Broadway shows and other creative projects from accredited investors.
The platform has a wide network of connections of lead producers, theater owners, creators, and investors that allow TBIC to find the best projects.
Along with financial benefits, investors get other perks and rights. For example, an investor gets an invitation to the premiere or the opening night party. Broadway investing also comes with the first rights on subsequent productions. For example, if after Broadway, the show goes on a national tour, the TBIC investors get a right to invest first in that tour before other investors are considered.
This approach can help to mitigate risks and increase the potential profits for both the show and the investor.
Seed & Spark
Seed & Spark is a platform that offers a comprehensive suite of products for creative projects including theaters. A crowdfunding platform is one of the key features of Seed & Spark.
Since its launch in 2012, the platform has helped to raise over $57,000,000 for more than 4,600 projects with a success rate of 82%.
The platform’s crowdfunding specialists take care of every project by offering personalized feedback and workshops. The platform allows a project to keep the funds after 80% of the fundraising goal is reached.
Seed&Spark has a so-called Patron Circle, a group of industry professionals and activities who combine their efforts to support innovative projects. Each patron commits from $500 to $2,500 towards each campaign that meets their criteria. Most projects that tackle social justice issues get a chance to get a Patron pledge.
How to launch a crowdfunding platform for theaters with LenderKit
If you are thinking about launching a crowdfunding campaign for theaters, check out white-label crowdfunding software offered by LenderKit. Using this investment solution, you can launch a donation, debt or equity crowdfunding platform and raise capital for theaters, artists and other related business projects.
Work with investors from onboarding to campaign investing and fund disbursements to streamline operations and automate your processes.
Contact us to see how you can scale your investment business with LenderKit.
