5.5: Other Funding Avenues

Self-Financing

Many young filmmakers start by self-funding their own films. Students finishing school assignments have the luxury of using their classroom equipment and fellow students to crew and act in their screenplays. This practice of self-funding becomes less feasible as filmmakers move toward more advanced productions. Hiring crew with higher skill levels and actors with experience will cost more than a director is willing to pay out of pocket.

Private Investors

When a filmmaker needs to secure extra funding, the first option is to turn to friends and family. However, Christmas, birthday gifts, or small donations won't be sufficient to cover equipment costs. Private investors want to see a proven track record of past work along with some development of new film ideas. The strategy is to place yourself where people are passionate about films. We’ve discussed grants and fellowships in earlier chapters. The next chapter focuses on film festivals.

Fiscal Sponsorships

Fiscal sponsorship is a relationship between an existing 501(c)(3) nonprofit and an individual or entity that does not have the legal status to receive grants from foundations, donors, and government agencies. Some companies facilitate connections between filmmakers and nonprofit organizations for a fee.

There are several advantages and disadvantages to consider when deciding whether to pursue a fiscal sponsorship, beyond the considerations mentioned earlier. First, this type of relationship offers clear benefits for both the sponsor and the sponsee. The fiscal sponsee gains access to the resources, infrastructure, and expertise of an established nonprofit organization. Meanwhile, the fiscal sponsor can undertake a new project to expand its support for the community. It can also serve its mission more efficiently with minimal effort. Furthermore, the fiscal sponsor might hire the sponsee to help manage the project, leveraging their familiarity with the initiative.

On the other hand, there are several disadvantages to a fiscal sponsorship relationship that might outweigh the benefits. These include losing full control of the project and paying administrative fees to the fiscal sponsor. To establish a valid fiscal sponsorship, the fiscal sponsor must have authority over the funds given to the sponsee and be able to manage significant parts of its operations. For some, this loss of control makes a fiscal sponsorship unfeasible; but if the sponsee can accept the loss, then the partnership can still be advantageous for both parties.

Product Placement

Product placement is a type of advertising where branded goods and services appear in a production that reaches a wide audience. Also called "embedded marketing" or "embedded advertising," product placements are mostly seen in movies, TV shows, personal videos, radio, and sometimes live performances. To secure product placement rights, companies might pay a production studio or company with cash, goods, or services. You can approach local businesses like restaurants to trade food or scene locations in exchange for an exterior shot of their business, but typically, you'll need to work with a product placement service to secure national sponsors.

Film Studio

In the preface of this chapter, Nick Chapman found himself captivated by a studio system. It would have been easy for him to make the movie he pitched, but he struggled with the changes the studio was insisting on.

Partnering with a large company comes with tradeoffs. The financing process is smoother because the studio already has many of the necessary systems and industry contacts. Studios handle production, marketing, and distribution. In exchange, the filmmaker sacrifices some creative control to the studio. The studio might even choose to cancel the project entirely.

Crowdsourcing

Crowdsourcing involves an online platform connecting many small investors with filmmakers. Based on the amount they invest, these individuals may be acknowledged in the credits, invited to film premieres, or even offered roles in the film or producer credits. Two of the most popular crowdfunding sites are "Go Fund Me" and "Kickstarter".

Some turn to crowdsourcing to complete projects that lack funding or to aid with development and preproduction. The most successful projects usually include a video pitch or trailer to give viewers browsing the listings an idea of what the project is about.

Basically, the filmmaker will set a goal as a dollar amount and a timetable for that goal to be reached.

Two Main Types of Crowdfunding

Crowdfunding platforms charge a fee for their service. You only pay the fee once your specific goal is reached. There are two types of goals: fixed and flexible. If you choose a fixed funding plan and hit your target amount, you'll pay the platform fee and receive the funds. If you don't meet the target, you won't get any funds, won't pay a fee, and the designated donations will be returned to the investors. In this scenario, you are not obligated to fulfill promises to investors, such as producer credits or tickets to premieres.

In flexible crowdfunding, you collect all donations and pay fees regardless of reaching the goal. You also need to keep your promises to investors even if your goal isn't met.

Fixed Funding is the Safer Option

Since most small films have limited funds, fixed funding appears to be the better option. There are no out-of-pocket costs if the goal isn't met — so there are no obligations to fulfill if you only attract a few investors. The advantage is that people browse these sites, especially those interested in films, and come across your specific project, which could spark their interest in your film. You gain access to a targeted audience inclined to make small investments in films, a hard-to-find audience elsewhere.

Another Kind of Crowdsourcing

Filmmaker Deborah Scranton talks about and shows clips from her documentary "The War Tapes," which puts cameras in the hands of soldiers fighting in Iraq in this seventeen-and-a-half minute Ted Talk.

Read a transcript of this TED Talk.

Networking

Networking is about building relationships. For many of my students, this begins in my classroom. This benefits everyone involved - you assist them with their goals, and they support yours. As students graduate from our program, they team up with other talented peers and start projects on their own.

Much of filmmaking involves freelance work. Networking with other filmmakers broadens your circle of peers. For successful filmmakers, this process continues beyond school and throughout their careers. Put yourself in situations that help you build new relationships with industry professionals. Here are some tips to expand your reach:

• Streamline your pitch
• Create a company name, logo, website, and business cards
• Stay connected to your talented classmates. This has mutual benefits - you help with their features, they help with yours.
• Follow and be followed on social media

Probably the best way to network is by attending film festivals. There are dozens of festivals across the country, and they do an excellent job of connecting people who share a passion for films and filmmaking. The next section provides more details.