Thursday, November 28, 2013

Crowd Sourced Funding for University Research and Development

Greetings from the University of Canberra, where Scott Chamberlain, Chamberlains Law Firm is talking on "Is crowd funding an option in a university setting?". Crowdfunding uses the web to collect small donations from the public for projects, which usually have a social benefit. Scott pointed out that under Australian law is it very difficult to offer people equity participation. The USA is going to change its law to allow for this, but not Australia. So a share of the business can't be offered with crowd source funding in Australia. Also whatever might be offered in return for a contribution is subject to consumer protection law. Also if something is offered in return for money, then this might be considered the sale of goods, with tax due.

Scott also pointed out that as it is necessary to provide details of the project with the crowd-source appeal, it will be difficult to protect the intellectual property. This then suits requests for straight donations, appealing to the public to help with projects in the public interest. This can therefore be applied to research projects. The project can still offer those donating small gifts, such as an invitation to a preview, or a copy of a report.

An example from University of Canberra is postdoctoral fellow Clare Holleley, raising funding for marsupial research. Clare pointed out that the campaign needed daily attention while it was running. But she also mentioned a bonus in terms of a higher professional profile through the process.

It might be interesting to see if the cost of creating the video and quizzes for a MOOC could be funded with Crowdfunding. At a previous presentation, Matthew Benetti at expressed interest in hearing from universities interested in Crowdfunding a MOOC.

Conceptually crowd-funding is not much different from a university asking the community for donations to fund research and education, and then invite the donors to thank-you drinks. The crowd-funding services take a commission (of around 5%). It would be interesting to compare this overhead with the cost of running the philanthropic activities (such as ANU Alumni Relations and Philanthropy). Obviously where donations of millions of dollars are made by individuals, the university can afford to have considerable staff support. Also where there is an existing relationship with the university, such as alumni, then an internal on-line system can be used. ANU has a "Donate online" facility, which allows money for general purpose, or a specific project. An advantage of using the university system is that the donations are tax deductible for the donor.

What might be interesting is if the universities were to create their own crowd-funding functionality, rather than use a commercial service. This could be run on the university computer system, or outsourced to an external provider. The external provider could be a not-for-profit provider, rather than a commercial one.

If universities are mainly interested in  donations from alumni, then it might be worth using a social networking type system, rather than a crowd-funding system. The university is likely to want to offer the alumni an ongoing experience, rather than one off donation requests.

One way to get participation by alumni might be crowd-sourcing and crowd-funding of post-graduate coruses. The idea being that graduates would be asked to suggest what further education they feel they need. Then the alumni would be asked to help fund the development of such courses. The donors would be invited to contribute case studies to be used as part of the course and to be be beta-testers of the on-line version of the course.

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