Survey Follow-up - Legalities and stuff (Patreon)

I'm not analyzing survey results today, but instead talk about stuff that's fairly unique to my country, strict laws on crowdfunding and fundraising.

Also, I'd like to inform everyone that a fixed monthly subscription is still an option that I'm considering, after one more time going through the stuff I'm just going to post.

Survey Follow-up - Legalities and stuff

So, I live in Finland. The laws here on crowdfunding are pretty strict, and because of a widely reported incident back in 2012 where the police intervened in a kickstarter project, a lot of people have been left with the impression that crowdfunding in Finland is illegal. This is not the case however, but there are a few things that must be taken into account in order to run  crowdfunding successfully.

First, let me tell about the incident from 2012, when a Finnish individual ran a kickstarter campaign to fund a children's book that teaches Swedish language. The kickstarter funding was successful, but the police intervened and told the person the way it was funded was not fully legal, and the money had to be returned. This made the news in a lot of places and scared a lot of people who were thinking about using Kickstarter or similar services. What was not reported in the news as well though, was that later on the same individual ran a new campaign for the same book, again on Kickstarter, changing a few details, and it was funded ok without police intervention. Still left a lot of people believing Finnish law doesn't allow crowdfunding.

So, what's the issue then, that makes crowdfunding difficult in Finland? The only really big thing is that you can't collect money without offering a product or service in return, unless you have a permit and work under a community or company that does charity work. The permit in question is thus given only to charities. Individuals can't collect donations, as this is likened to begging, which is not ok, and one reason you don't really see beggars on streets in Finland. But the kickstarter offers a product, right? Yes, but they also allow donations without rewards. This was the biggest issue in the reported kickstarter case.

Ok, so let's offer something in return for the money collected then, easy-peasy. Not quite. Now you are doing sales, and you must do book-keeping of the sales income, pay taxes, paperwork, etc. Basically, you gotta register yourself as an entrepeneur. This requirement has obviously limited individuals' desires to try crowdfunding as well, especially minors who can't run a company yet, or those who would need to do their project full-time, but can't afford the expenses being an entrepeneur brings with it, and the fact that you lose most unemployment benefits in such case, and need to rely on the crowdfunding alone for income.

So, is that everything? Basically yes, though there are some nuances that are best taken into consideration as well, such as the product or service that is offered in return must be something of actual value. For example, getting your name listed in the credits of a game or movie is not considered such. In my case, I believe offering exclusive versions of my art, as well as access to other exclusive stuff, should be ok. At least some article I googled up suggested so. Also, it is important to make sure that the 'customers' understand that donations aren't being collected, and all the money goes to funding the stuff you get in exchange. You'll be seeing some new disclaimers on my page.

Note that I'm no expert on these laws, but I've been googling around like crazy for years on these issues and the above stuff is where everything seems to lead to, every time.

So, why haven't these things been an issue for me before? Well, I've been doing this on the side, kinda off the books. The amounts I've made are so small that I figured anyone might make same kind of money on the side from whatever knack they have, helping out relatives or friends or whatever. But now that I'm thinking about going full-time, no more playing around. After seeing several other Finnish people running on Patreon successfully, I decided to start looking further into how they do things.

So, what am I going to do to ensure everything goes well?

* I won't accept 'no reward' pledges. You gotta choose one of the tiers listed. Shouldn't be an issue since I usually only have one or two pledges like this at a time.

* I may decline custom pledges entirely, and you must choose the exact value a tier is listed for. This is not certain yet. I've seen other Finnish creators on Patreon not having any disclaimers about this, but I would imagine the money that goes over the tier's listed value could be considered a donation if put under inspection. Will be on the lookout for more info on this.

* I'm going to offer several tiers with increasing benefits, so that if the above restriction is in place, there should be enough choices to find the sweet spot you want to pledge.

* To make sure my prior Patreon income doesn't get mixed up with the full-time income, I will likely start a fresh new creator account. Sounds like a hassle, I know, but ultimately all you need to do is cancel your pledge here and pledge again on the new account. That's it. I will keep records of your lifetime pledge amounts and the like in case in future there are any special benefits I want to offer to long-time patrons.

* I'm not going to register a business, but am going to register as an entrepeneur. As for book-keeping, I'm going to rely on a service that at least one other Finnish creator has relied on, that handles book-keeping, paying taxes and counting my final income from everything. They take a small cut on the side, obviously, roughly 5%, but that's a fair amount, considering all the hassle they take care of. Plus they offer legal advice for their customers, so I can pop in some questions about running a Patreon campaign safely. I've already asked about how they handle Patreon income, and the solution sounds decently simple enough, plus they're familiar with it by now.

That's it, in a nutshell. I will be on the lookout for more legality specifics along the way, but considering that since the 2012 incident there haven't been any news of any individuals being subjected to police intervention in crowdfunding cases (aside from some bigger organizations with a lot of money involved), at least to my knowledge, I feel confident enough to give this a spin. YOLO and everything.

Now, I did mention at the start of this article that I'm reconsidering the monthly subscription option. There are two reasons. First, I figured that there could be cases where under 'per creation' setup someone might get a benefit for free (because they've hit they're monthly max) while another pays for it. This could be an issue as in Finnish law every customer should be paying the same price for the same product or somesuch, yadda yadda, blah blah. Making everyone pay the exact same amount would be safer. Maybe I'm being paranoid here, but it's still a reason for concern. Secondly, I counted the answers you gave me in the survey about how much you'd be willing to pledge per month with a monthly subscription, and the results looked good. The total from 44 responses was $548. That's roughly half my current patrons. Assuming the other half is willing to pledge at least somewhat close to that, plus maybe some new patrons after I begin an extensive promotional campaign, reaching $1000 should be realistic. For the record, I'd need roughly $800 minimum to have a chance to break even with my expenses. And that would still include a ton of commission work and other stuff to cover what's left. A $1000 would be extremely awesome, and way more than I anticipated. You guys are awesome! ^_^

That's all for today's update. Tomorrow I don't have work, so I'll likely make another update then, probably more survey analysis.