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The idea of crowd funding, started in the 1990s, in the United States, centres on establishing a cooperative effort among people to pool their resources to support creative projects. Usually organised on the internet, crowd funding is used to get financial resources for book publications, concert tours or the development of an innovative product.
In the crowd funding system of financing, it is not the producers who tell the consumers what is necessary, rather it is the consumers who express their own needs and influence product and brand innovations, said GFK Hungária managing director Ákos Kozák, who is in an expert on the subject.
To be included on the portal, the creative parties must submit a detailed project description, a plan for implementing it and a budget. They also must specify whether they want to raise the necessary funding in 30, 60 or 90 days. The projects are put through a three-step filtering process in which the portal?s operators determine whether the project can be carried out and assess the feasibility of raising the necessary amount of financing in the allotted period of time.
Crowd funding poses no risk for donors, said Tímea Kovács, who is in charge of strategy and communications for kezdheted.hu. If the amount necessary for a project is amassed, the portal transfers the money to the creator; if the amount is not reached, the money is returned to the donors, she explained.
?This financing model speaks rather to the younger public, who are at home in the online world and in the area of digital knowledge,? said Kozák. ?The question is when the time will come when a mass social presence results in public donations,? he added.
Source: Hungarian News Agency (MTI)
