Crowdfunding & Public Culture Funding
Culture promotion is the totality of publicly funded or subsidized culture within a community. The responsibility of cultural promotion is anchored in the respective state constitutions. Thus, in Berlin, culture promotion deals on the basis of the Landeshaushaltsordnung - LHO in the form of grants or subsidies. Only non-profit projects and non-profit-making organizations are funded. (Commercial cultural providers and projects fall into the field of business development). Crowdfunding, on the other hand, is a (still) rather young form of self-financing supplementing culture. The funding is provided by a variety of fans and supporters instead of public funding.
Public support for culture is usually based on lack-of-need financing - regardless of whether projects or institutions are to be financed. The difference (lack of need) finances the promotion, so only the "gap" will be closed. The acquisition of additional funds, so-called third-party funds, such as Crowdfunding, but also donations, etc. is relevant insofar as that any Euro beyond the deficit specified in the application does not benefit the project. If a recipient of funds via crowdfunding, for example, subsequently receives more money than expected, it will be charged against the public funding. The difference between the initially granted grant and the new, smaller deficit must be repaid to the sponsor.
In principle, you should get in touch with the contact persons of the respective funding program before submitting your application for funding in order to discuss the financing plan with regard to a crowdfunding position.
In general, there are three ways to organize this:
1. Start a crowdfunding campaign first and then submit the application for public funding. In this case, crowdfunding revenues are treated like other own or third-party funds. Risk: If public funding is not granted, you have to find another donor. In the worst case, the project does not materialize. Or: The crowdfunding campaign is set up so that the project can be realized, at least in part, even without public funding.
2. The revenue from crowdfunding is included in the cost and financing plan as expected third-party funding. In case you have to justify the costs of your project in the application a deficit nevertheless arises, which is indicated as need for support. Risk: If the revenue from crowdfunding does not come in the planned amount, then you have to be able to slim down on the expenditure side.
If more revenue is generated than planned, then the shortfall is reduced. If necessary, the project can be extended by amendment in coordination with the cultural administration. Important: Corresponding amendments must be made before implementation!
3. Divide the project into two parts and initiate two financing processes. If you have a deficit in your subproject, then apply for public funding. The second sub-project is funded exclusively through crowdfunding. (e.g., exhibition through shortage; catalog through crowdfunding). Risk: If the crowdfunding revenue does not come, then you have to be able to slim down.
Please note that crowdfunding can’t be used additionally if you have already applied for the project and the project is already running. Then, with crowdfunding, you can only do something extra that matches the content of the project, but does not appear in the application.
That depends on the funding program. If you apply for a funding of ERDF (European Regional Development Fund), the crowdfunding sum must be obtained as a third-party funding prior to the application. ERDF funds can’t be subsequently co-financed with crowdfunding measures.
In the case of funding programs of the state of Berlin, applicants can generally also fill in the required funds with funds from crowdfunding. Here, however, one has to keep in mind again that if there is a shortfall in financing, any higher proceeds from crowdfunding will reduce the deficit, ie the subsidy amount.
Important: The public funding for the project can only be definitively approved by the Cultural Administration if the overall funding of the project is secured. Until then, funding can only be promised!