The primary goal of the Adventures in New Giving is to discover how crowd-and-community based philanthropy can play a role in transforming our economy into one that is fairer, more participatory, and built on community interdependence.
The heart of the project lies in a concern for building civic engagement and social capital and understanding what this new fundraising landscape means for change-makers and the arts.
It is about learning and building communities of New Givers. It was not envisioned as a political matter, except for the micro-politics of communities building power together.
However, it can’t ignore a bill that is making its way through Congress, the Reopening American Capital Markets to Emerging Growth Companies Act (HR 3606 & S 1933). House versions of the bill have passed twice (November and a couple of weeks ago), and it’s working its way through the Senate now.
As much as we love crowdfunding, this post isn’t about taking a position on the bill. Instead, it’s intended to start a conversation. What do you think about this potential new law?
Here are the basics:
- The bills are intended to lower the SEC reporting burdens for startup companies that want to build their capital from many small investors (ie crowdfunding) if they are raising under $1 million.
- To date, businesses that use crowdfunding solicit donations, rather than investments, and the return comes in the form of rewards, often including products (works of art, DVDs, albums, iPod wristbands). The new rules would allow a cash return-on-investment.
- Proponents argue that the relaxed rules will create a wave of new businesses and jobs and help to ensure that new businesses will have early an customer base coming from the crowd that funded them in the first place.
- Concerned parties say that minor investors will not have the information and tools they need to avoid fraud or high-risk investments, which could add further uncertainty to our chaotic markets.
This is intentionally a very simplified breakdown. If there is a key piece of information missing (or an error), please say so in the comments.
Please let me know what you think about this bill. It would be wonderful to start a conversation on this important development.