As the Artfacts initiative of the Australia Council has noted crowdfunding has emerged as a new source of funding for the arts. Globally, crowdfunding platforms have seen dramatic increases in funding raised with $2.7 billion raised in 2012 (up from 1.5 billion in 2011) across all categories (including arts). Some of the more popular crowdfunding platforms include:

Pozible, an Australian crowdfunding platform, had an average success rate of 56 percent in 2012, up from 45 percent in 2011. As of February 2013, the platform has helped funnel a total of AUD$8 million across 1,300 successful projects since it was established in May 2010. While this funding was across all categories, some of the most popular categories have been film, performance, art and music. Check out projects on Pozible that have been successful. You might also like to talk to artists who have used it. http://www.pozible.com

Kickstarter  is one of the key global crowdfunding platforms, has successfully funded over 20,000 arts-related projects, which raised over $100 million in support. To date, tens of thousands of creative projects — big and small — have come to life with the support of the Kickstarter community.. https://www.kickstarter.com/

Patreon operates on a subscription-style payment model, fans pay their favorite creators a monthly amount of their choice in exchange for exclusive access, extra content, or a closer look into their creative journey. https://www.patreon.com/

However it is not the answer for everyone. This nextweb.com blog offered some other matters to consider when it considering Crowdfunding platforms such as Kickstarter, against more traditional investment and these may also apply to other sources of arts funding.

“If you’ve ever been to a big, rowdy concert, you’ve probably witnessed the phenomenon of crowdsurfing. This happens when a musician or fan takes a leap of faith from stage, knowing the crowd will carry them to safety. Using crowdfunding for your startup venture is much like crowdsurfing a rock concert — and also carries the same hazards that, at any moment, someone might drop you to the ground.”

(Aaron Pitman, an angel investor and founder and partner of RA Domain Capital.)

Matters to consider:

Rushing to market. Starting up a Kickstarter campaign instantly puts a ticking clock above your head when it comes to delivering your product or service. Not everyone has the Hollywood contacts of Zach Braff, and trying to develop your business with a list of Kickstarter backers following your every move can be more stressful than comforting.

Traditional investors and funders. One of the biggest benefits of traditional investors is located in their brains, not in their wallets. Sure you can raise your seed money on Kickstarter or another crowdfunding platform… then what? Many newbie startup founders and first time entrepreneurs need the guiding hand of an investor who has been where they are and can help avoid the pitfalls. Your crowdfunding backers are looking for a finished product, they’re not going to provide you the means to make your dreams a reality.

What happens if you fail. On Kickstarter, you can promise products and rewards for backers who pony up cash to make your big dreams into a reality. But what if your company crashes and burns? Not only did you lose out on your entrepreneurial dreams, you still have Kickstarter rewards to honour.