Business

Universities Dip Into Crowdfunding To Raise Money

By L.M. Sixel
Houston Chronicle.

Neuroscientist Jon Pierce-Shimomura, an associate professor at the University of Texas at Austin, needed some special mice for a research project on alcohol addiction but the costs weren’t in his budget.

So he turned to crowdfunding, fundraising efforts via online platforms used by everyone from startups to charities.

Universities are also getting into the game.

UT’s 2-year-old HornRaiser crowdfunding platform brought in $13,148 last month, enough for him to buy a couple of custom-made super mice to breed so he has enough rodents for his research on alcohol addiction.

Pierce-Shimomura has identified a molecule in microscopic worms that triggers intoxication and the effects of withdrawal, and wanted to genetically alter the same molecule in mice to determine if it has the same effect. It might point to a regimen for treating human addicts by eliminating craving sensations.

“This isn’t esoteric research,” he said. But the two genetically altered mice cost $12,000, big money for a lab that depends mostly on funding from the National Institutes of Health.

Pierce-Shimomura wrote a script and recruited his students to appear in a university-produced video about the “Mutant Mouse that Cannot Get Drunk.” The project was featured in a HornRaiser campaign.

Universities have relied on crowdfunding for replacement cheerleading uniforms, travel expenses for ballroom dance competitions and research equipment not covered by federal grants. They are relying on some of the same techniques entrepreneurs, performing artists and social service groups have used to raise millions of dollars in small donations for more than a decade.

Showcases for universities
The solicitations, which by nature require contact with large groups of people, create new ways for universities to showcase their contributions to the community while attracting donors not drawn to a traditional capital campaign or to the establishment of a scholarship fund.

UT’s HornRaiser campaign, which started with three test projects in 2014, has attracted 1,874 donors and raised $431,000.

“It has not been a donor bonanza,” said Adrian Matthys, director of annual giving at the University of Texas at Austin, at least compared with the $3.12 billion the university raised during its eight-year Campaign for Texas for new facilities, scholarships and research programs.

Nor will it replace the National Institutes of Health, said Pierce-Shimomura, who, like many scientists, depends upon the U.S. government agency to fund the vast majority of his research.

Generating passion
The university provides the online donation platform, and students, staff and faculty members compete to have their projects featured. They’re often more passionate about their projects than any professional fundraiser would be, Matthys said. About two-thirds of the projects met or exceeded their goals. One key requirement is that project leaders must have access to their own pool of potential donors whether it’s friends, family or fellow academics.

“They have to bring their own crowd,” said Matthys, who relies on the groups to generate their own funding for projects instead of tapping into existing pools of university donors.

The projects are uncovering new supporters previously unknown to the university, he said, recalling how two entomologists tapped into the large -and generous -citizen science community when they promoted their HornRaiser projects to track monarch butterflies on oil rigs and to capture close-up photos of insects.

Before HornRaiser kicked off, people who made two donations in one academic year — say $50 to the College of Liberal Arts in the fall and $25 to the university library in the spring — were statistically likely to donate again the second year, Matthys said.

“It will be interesting to see if they’ll turn into long-term donors or whether they’re just married to that one project,” he said.

The University of Texas at San Antonio was the first university in Texas to start a crowdfunding program. Marjie French, vice president for external relations and chief development officer, got the idea for “Launch UTSA” when she attended a presentation in 2013 on ways to approach graduates for donations.

Alumni at UTSA are relatively young -73 percent are under age of 49 — and nearly half completed their degrees during the past 15 years. It’s a civic-minded group that lives on social media and French was looking for a fundraising approach that would resonate with them.

In nearly two years, UTSA has sponsored 16 projects, starting with an engineering society that qualified to compete at the National Student Steel Bridge Competition but didn’t have travel money. The students set a goal of $2,500 but raised $6,270.

They earmarked the excess for future competitions.

Members of the cheerleader squad launched another project when they needed $12,000 to buy new uniforms. It proved so popular that they ended up with $14,000 — enough to add pom-poms, matching hair bows and megaphones.

The projects generate excitement on campus. They run for 30 days and most of the money tends to come in towards the end.
“You get some urgency,” she said. “You are really sweating it.”

Engaging students
Some universities say it’s not worth the time-consuming effort because it’s not a lot of money, French said. She rejects that argument, even though UTSA’s crowdfunding donations of $91,500 over two years were just a fraction of the $27 million it received in 2015 alone through more traditional fundraising.

She said it engages students in the projects they’re most passionate about and allows the university to tap into a new donor network.

Fifty-seven percent of crowdfunding participants are first-time donors to the university, French said. Thirteen percent are lapsed donors, meaning they haven’t given during the past seven years.

After seeing so many of its students, faculty, staff and alumni launch their own independent crowdfunding projects, the University of Houston is creating its own platform, said Jonathan Brooks, associate director of annual giving. He hopes to have it ready by March.

Like other universities, the University of Houston doesn’t see the tax-deductible donations as a big new funding stream. But publicity surrounding the projects will provide a new way for the school to telegraph its exciting research and student-led initiatives.

“It’s really to get the message out of what the university is doing,” Brooks said.

When UH associate professor Wei-Chuan Shih needed to raise money last year to commercialize an invention, he had to turn to the private crowdfunding market.

Shih used an independent crowdsourcing platform to raise money to create a commercial market for his invention — a device similar to a contact lens that fits over the camera lens on a smartphone and makes it a microscope. Shih is in the department of electrical and computer engineering and working on a side business with his students to commercialize the research. The University of Houston holds the patent and Shih has an exclusive license.

The first crowdfunding effort didn’t work, which Shih attributes to a lack of publicity. But when they tried again, a flurry of news stories, attention in scientific journals and a write-up on the University of Houston website generated enormous interest.

The group raised $20,000 in a couple of weeks last year and used the funds to attend trade shows to meet potential customers and develop quality control prototypes.

“Our product is ready to go,” he said. But it needs investment funds from crowdsourcing to scale up.

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