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Money Masterclass: Fund Your Music Project

August 29, 2014

YOU WANT to record an album, go on tour, create new merchandise. The problem is, you don’t have the cash on hand to make any of these things a reality. How can you raise the money to help fund your next musical project?

Fortunately, as we explained in our October 2013 article, “Starting a Music Business for $0,” you might not need very much money, because you can get worldwide music distribution, merchandise, promotion, and licensing for free. But beyond being smart about expenses, and driving income through music sales, licensing, shows, and merchandise, there are many other opportunities to fund your music.

This article introduces you to four music-funding streams that you can tap before you even start your project: sponsorships, patronage, crowd funding, and grants.

Sonicbids.com helps artists and potential sponsors connect.
A Word About Sponsors Although many musicians think that getting sponsored is only possible for well-known or established acts, the truth is, sponsorships actually are within reach of nearly every musician. Every business out there—from corporate behemoths to your local mom-and-pop shop—is looking for the same thing: opportunities to grow their business and get exposure to new customers. As a musician, your fan base, public appearances, shows, blog, and online presence can provide advertising and marketing opportunities for their businesses. All you need to do is work out an arrangement that benefits both sides.

Getting sponsored can be as simple as asking Jake’s Pizza Palace to pay you $200 to put their logo on the banner that’s behind the stage. But some musicians take it a bit further, and seek out specialty brands that match their music or style. For example, Frankendread is a steel-drum artist whose shows are laid-back with a beach-party vibe. He worked with a Caribbean-style beachwear company that complemented his music perfectly. He wore their clothes at shows, and it was natural for him to plug the brand from the stage.

In exchange for company sponsorship, you need to offer the business something in return, in the form of access to your audience and/or your skills as a musician. You can help promote and market the business’ product or services through a variety of ways, such as giving them advertising opportunities to reach your audience: online sponsorship announcements on your web site, social media, or videos; ad placements on your site; co-branding shows or events; product placements in live shows and videos; or even endorsements.

When you’re approaching a business to talk about getting sponsored, you’ll need to share information about the size of the audience you can help them reach, so be prepared to talk numbers. You can support your case by sharing the size of your average draw or your mailing list. Other statistics that can help include the number of social media followers you have; your Eventful Demand number (eventful.com), which proves how many fans attend your shows; and the number of views you get on your YouTube channel. When you’re talking to a potential sponsor, be sure to mention other businesses that have already sponsored and signed on with you.

Music for Money Sometimes businesses will be interested in using your music or having you create content for them in exchange for funding. You can offer them original music that you already recorded, or you might suggest that you write new music that they can use in their marketing campaigns, on their website, or in promotional videos. You’d be surprised how often businesses need licensed music; so many marketing assets and videos are needed today. If you have a studio, another option could be to barter studio time that they might need to make their own radio/video spots or commercials; small businesses rarely have the budget to pay for time in a professional recording facility.

Plus, keep in mind that sponsorships don’t have to involve just money. You can also ask for giveaways or discounts for fans, cross-promotion through a company’s press contacts, advertising or marketing, and even free services or products. Just remember to be creative when working out these deals. You never know what you can get until you ask! Note that if the deal you make involves a significant amount of money, you may want to ask an attorney to review any agreements before you sign them.

If you’re not sure where to look for a sponsorship that suits your music, there are a number of services that can help to connect you to potential sponsors worldwide. For example, some of the opportunities listed on SonicBids (sonicbids.com) involve big name brands. These companies are looking for ways to reach a target demographic that your fans may already fit. Some active brands like RedBull are actually particularly musician-friendly, and will be predisposed to create events and opportunities for musicians to work with them (redbullmusicacademy.com).

Patreon.com lets fans fund their favorite artists generally, up to a chosen limit. This form of patronage is not attached to a specific project.
Patrons of the Arts In an article called “1,000 True Fans” on his website The Technium, Kevin Kelley suggests that if a musician can get 1,000 fans to spend $100 a year, that musician will earn an annual gross income of $100,000: a very good living. This idea seems plausible mathematically; the problem is, it’s hard to get $100 out of a fan if all you’re selling is an album, a t-shirt, and a few tickets to a show. Plus, even if your fan buys everything that you put out in one year, in year two, you’d need to put out another album, new t-shirts, and put on more shows, and hope that the same fan will spend another $100. It all adds up to very flawed business model.

However, one way to get a stable income out of your fans is through their patronage. Historically, artists were often supported by royalty, wealthy individuals, or large organizations. Today, there’s an app for that.

Modern patronage comes in at least two different forms. Services like Patreon (patreon.com) give your fans a way to set a dollar amount they will pay you each time you release something like a video or a new song. They can even set a monthly maximum so that they can stay within their budgets. For example, the band Pomplamoose releases popular videos on a regular basis; they make a few thousand dollars from their patrons for each video they release. To encourage patronage, the service also allows musicians to give their patrons exclusive content.

Another model of patronage works on a subscription basis. Services like Patronism (patronism.com) allow patrons to pay you in regular monthly installments that they set. In return, the service allows artists to offer exclusive access to unreleased material, live recordings, backstage videos, blogs, and more.

Of course, the simplest way to ask fans for financial support is to have a virtual “tip jar” on your website. All you need is a Paypal link. Paypal will take a cut, but any money a fan donates above this amount will be all yours.

Perhaps the best feature of the patronage model is that you can get funding from it while continuing to make revenue from other income streams, including music sales, merchandise, licensing, video advertising, and more.

The In Crowd Crowd funding services let artists ask the public to help fund a particular project or product. You set an overall target dollar amount that you’re trying to raise by a specified date, and offer rewards for different levels of pledges. As funders pledge, the service collects the money (minus fees) and provides a platform for you to communicate and market your project and campaign to your backers.

Crowd funding accomplishes two things. First, it allows you to pre-sell your albums, merchandise, or concert tickets to fans so you get their money up front. This reduces the risk of putting out a product without knowing how much money you can recoup. Second, crowd funding offers the opportunity to involve larger backers, especially if you offer enticing rewards to get them to pledge more than they would pay for a regular album, event, or show.

One of several crowd-funding sites that let fans help artists meet project-based goals, Pledgemusic.com has been the choice of name artists like Rufus Wainright and OK Go as well as newer bands.
Crowd funding takes time and effort; it’s not something you want to jump into without a plan. In fact, more than 44 percent of music campaigns on Kickstarter (kickstarter.com) fail. Musicians who succeed at crowd funding are the ones who plan their campaign, choose the right rewards, time the campaign right, and, perhaps most importantly, put together great marketing that sells the project. There are five elements to running a successful crowd funding campaign:

1. Choose an appealing project. People want to fund projects that are intriguing and compelling to them.

2. Set realistic but adequate funding goals. Be sure to set a target funding goal that is achievable but will allow you to fund your project. Keep in mind that crowd funding services take a cut, so you’ll need to build in an amount to cover those fees. However, if your goal is too ambitious, you may run the risk of your campaign failing; people might not pledge if they get the impression that the project won’t get made.

3. Select the appropriate crowd-funding service. There are many services that you can use to raise money. These include: Kickstarter, IndieGoGo (indiegogo.com), PledgeMusic (pledgemusic.com), ArtisteConnect (artisteconnect.com), Oocto (oocto.com), Sell-A-Band (sellaband.com), and Feed the Muse (feedthemuse.com). Each one has different terms and conditions, features, fees, and funding models. For example, Kickstarter campaigns that don’t reach their target don’t give you any of the funds you might have raised, while IndieGogo allows partial funding. Do plenty of research to find out which one is best for you.

4. Plan your rewards. It’s essential to offer rewards that will ensure a successful campaign. This topic will be explored further in a future Electronic Musician article; we’ll explain the best ways to structure incentives to maximize pledges but keep your costs down.

5. Execute your campaign. Successful campaigns are not only well planned, but they’re also sequenced and timed effectively to get the most money out of the backers. This is another big topic that we’ll cover in a future Electronic Musician article.

In addition to the five elements above, take time to check out successfully funded campaigns on crowd-funding services to get ideas for your own campaigns. Look deeper than the crowd-funding page and explore the artist’s online and social media activity to learn how they promoted and marketed their project.

Get a Grant When most people think of getting a grant to support their art, they think of applying to governmental agencies. But the government is only one source of grant money. Private companies, trusts, charities, nonprofits, and even individuals offer money to musicians too.

One way to increase the odds that you’ll get grant funding is to apply for those whose mission statements and goals align with your project and music. You’ll need to research what opportunities are out there. For a list of agencies that provide grants for music and the arts, see the National Assembly of State Arts Agencies (nasaa-arts.org). Also check out the Savvy Musician’s funding page (savvymusician.com) for other public and private organizations and nonprofits that offer grant funding.

Grant associations establish criteria that you must meet and rules that you must follow in order to qualify. Applying for grants requires a lot of paperwork, too, so be sure to follow all of the submission instructions carefully and meet submission deadlines. And if you are awarded a grant, make sure you follow all of the reporting requirements afterwards. Grant associations will often want an accounting of how the project went and how their money was used.

Keep in mind that most grants make a distinction between nonprofit and for-profit business. Most musicians are for-profit and lack the necessary 501(c)(3) tax status that that is required to be eligible for many grants. One way around this is to be sponsored by a non-profit. Services like Fractured Atlas (fracturedatlas.org) specialize in this.

Finally, keep in mind that there are a lot of options out there when it comes to grant funding. Some are very simple and within reach. For example, check out the Awesome Foundation (awesomefoundation.org). This organization gives away $1,000 to any project they determine is “awesome”—no strings attached! There are Awesome Foundation groups in major cities all over the world, and they meet regularly to review projects and award money. So, ask yourself: Is your project awesome?

Next time you record an album, decide to go on tour, or create a new line of merchandise, remember that there’s money out there waiting for you; you just need to claim it. Sometimes, the only difference between musicians with money and ones without is that the ones with money took the trouble to ask.

Randy Chertkow and Jason Feehan are authors of The Indie Band Survival Guide (St. Martin’s Griffin), now in its second edition.

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