Crowdfunding for a better democracy: an interview wit Téo Ferraz Benjamin
edited by Bianca Pick
While the Brazilian democratic state is in the midst of one of it’s biggest trust crisis, a candidates for Rio de Janeiro’s municipal elections is calling on citizens for financial help. His campaign is aimed to be inclusive, transparent, and is run by two Brazilian crowdfunding experts: Felipe Caruso and Téo Ferraz Benjamin. During a meeting with Téo at Colaboramerica, he explains how crowdfunding could strengthen the country’s democratic values.
WHY DID YOU CHOOSE CROWDFUNDING AS A WAY TO RAISE MONEY FOR THE ELECTORAL CAMPAIGN?
Téo Benjamin: In 2015, Brazil passed a law that forbids any political party to be sponsored by private companies. Lead by Marcelo Freixo, the idea was initiated by the PSOL, (Partido Socialismo e Liberdade), to tackle the huge problem that is political corruption in our country. Just look at the current Petrobras scandal, it’s the perfect illustration of this!
Our municipal elections last October were sort of a trial for this new arrangement which only allows individuals and citizens to financially support candidates. So my partner Felipe Caruso and I designed this crowdfunding campaign with the patterns from classical crowdfunding.
WHAT WERE THE RESULTS LIKE ?
TB: We raised a total of 1,8 million reais, making it Brazils biggest crowdfunding campaign ever. 14,000 of the backers donated more than 17,600 times and more than the half of the money raised through the internet was dedicated to our candidate. It’s also worth mentioning that one third of our backers lived outside Rio. Marcelo Freixo ideas are very progressive and the campaign became a symbol across over Brazil you see.
BACKERS DIDN’T RECEIVE A REWARD, LIKE YOU WOULD IN REGULAR CROWDFUNDING CAMPAIGN. CAN WE STILL SPEAK OF « CROWDFUNDING » THEN?
TB: There are four different types of crowdfunding: equity crowdfunding, peer-to-peer lending, reward-based and donations (with no reward). The last one applies to us.
The main question to ask is «when does crowdfunding stop being « crowd » ? »
However, if you launch your project on the Kickstarter platform, and raise 200 000 dollars from 10 people, can this be considered crowdfunding? We don’t think so. For it to count as crowdfunding more than 80% of the donations should be under the average amount donated.
Another candidate running for the Rio municipal elections for example raised 7 millions reais, but the average donation was 20,000 reais. Some people even donated up to 200,000 reais like CEO’s or investors. This can definitely can not be considered crowdfunding.
HOW WOULD YOU EXPLAIN THE SUCCESS OF THIS CROWDFUNDING CAMPAIGN AMONG CITIZENS ?
TB : First of all, this campaign addressed people who already were inclined to vote for Freixo and who understood the importance of backing him up. Their support allowed us to be the very efficient. But most of all, the campaign acknowledged that any backer, no matter the size of the donation, is as important as Marcelo Freixo himself. We Brazilians are not as naive as one might think, we know that our politicians don’t listen to us and work solely to stay in power.The fact that citizens felt listened to and respected in our campaign definitely contributed to our success.
WHAT ADVICE WOULD YOU GIVE A TEAM PLANNING TO LAUNCH SIMILAR CAMPAIGN?
TB : First of all, you must start the campaign as soon as possible! You have to anticipate everything and building a community takes time. Luckily Marcelo Freixo had already developed a very strong community over the past years in a program he designed through over 70 citizen meetings, along with stakeholders of the city. It was important that this funding campaign was coherent with our candidate’s values.
Secondly, you have to be extremely transparent and explain step-by-step how the money is being used. Telling contributers for instance that « we need this amount to print more flyers », « this money will finance an open-air meeting », or « this money will serve to reach a remote place of Rio » etc is important.
Transparency is really important for the reputation of the crowdfunding campaign as for the candidate himself.
Eventually the platform, like any crowdfunding platform, has to be a little bit « sexy ». You always need to tell a story that makes the cause appealing.
IN WHAT WAY MAY THIS CROWDFUNDING CAMPAIGN BRING HOPE TO THE BRAZILIAN DEMOCRACY ?
TB : This campaign was a test introduced by the Supreme Court, with no guarantee of continuation in the next elections. Nevertheless it created a precedent. Citizens will start to believe in this type of financing and so if crowdfunding is launched for a next election, they will take it seriously.
This campaign was just the beginning.
To encourage this type of practice in politics, we have to transmit our key learnings on how to create a virtuous circle of trust between the candidate and voters.