CITYWIDE — In March, City Council gave activists trying to save the “Chain Reaction” statue an ultimatum.

They could either raise the $220,000 to $420,000 needed to make critical structural repairs on the artwork by November, or it would be removed from the Santa Monica public art collection.

A team of activists banded together to try to raise money for the piece, which was originally designed by Pulitzer Prize-winning editorial cartoonist Paul Conrad, but efforts inched along, with only $2,500 raised four months before the deadline.

They may have a lifeline.

“Chain Reaction” will soon have a crowdfunding page on the Westside website When You Wish, which will allow people from as close as Southern California and as far as Beijing to pitch in to save the statue.

Crowdfunding, the idea of building a large pot of capital out of small donations, is nothing new, but the Internet platforms that have developed over the last four years — and the recognition they’ve received within the halls of government — are.

Popular websites like Indiegogo, Kickstarter and When You Wish have forged massive communities of entrepreneurs and artists seeking patronage and investment at a time when neither are available from traditional sources.

The idea: To empower people with great ideas or great products to connect directly with those who want to support them, both in their local communities and across the nation and world.

The businessperson or artist gets startup money at the beginning of their venture in return for the promise of goods down the line or a series of creative perks offered for various levels of giving.

New technologies, an increase in social networking and a decrease in the fees assessed on sending money through the Internet combined to make crowdfunding a great way for small businesses, artists and charitable causes to raise cash, said David Harvilicz, founder of crowdfunding site When You Wish.

“I’ve been an advocate of this democratizing notion,” Harvilicz said. “What Facebook and other social media have done is connect people in amazing ways online that could never have happened before.”

Crowdfunding is essentially taking a social media platform and adding in a tool to send money.

Harvilicz started his company in Santa Monica, although it has since moved just outside the city’s borders into Venice.

A former Wall Street attorney, Harvilicz was inspired to found the site when he saw his sister, a veterinarian, struggling to consolidate payments for a soccer league.

“One girl lived in (Orange County), another in Downtown. It took her all day to collect these checks,” Harvilicz said.

The two talked about the problem and how it could apply to other things, like gathering money from like-minded individuals to save needy animals.

When You Wish threw its doors open to all comers.

Local thespian group City Garage has jumped on the bandwagon to raise the $50,000 it needs to revamp an old section of the Bergamot Station arts center into a modern theater that can accommodate its modernistic style, and a visit to the site’s front page has a pancreatic cancer victim raising money for treatment.

“If you have an idea, a cause and it resonates with people, and touches their hearts, they want to give for all kinds of reasons,” Harvilicz said.

 

Platforms

 

Campaigners choose different platforms for different reasons.

Michael Bodell, a Santa Monica entrepreneur trying to built environmentally-friendly homes out of retired shipping containers, launched his quest for seed money on Indiegogo.

The site gave him the flexibility to raise money for a cause rather than an art project or business, and also let him keep the money he raised even if he didn’t reach a specific goal.

If he didn’t reach the goal, Bodell said, he could always use the money raised to build a smaller version of the same idea.

Bodell’s project wouldn’t have been possible on Indiegogo when it first launched in 2008.

At the outset, it only offered opportunities for independent filmmakers, but that quickly changed, said Adam Chapnick, with Indiegogo.

The site now features 24 different categories for projects, but discriminates against no cause or client, with the exception of those on the United States Treasury Department sanctions list.

“We really believe there are so many ways you can do good in the world,” Chapnick said. “We don’t believe that we should stand between the campaigner and what they think that they want to do.”

Others don’t cast so broad a net.

Kickstarter, for instance, only allows people to raise money for artistic endeavors.

In September 2011, documentary filmmaker Varda Hardy launched a campaign on Kickstarter to raise $40,000 to get the ball rolling on a film about the Santa Monica High School choir.

She felt the film was crucial to shine a spotlight on the choir’s work and integrity, which was under attack as cuts from the state level threatened “non-essential” programs like arts and music.

The task of pulling together a professional documentary using a largely volunteer staff was monumental, and near-impossible without the infusion of cash promised by a successful Kickstarter campaign.

Within a month, 442 backers had raised $44,670 for the project, making it one of 26,823 projects that have been successfully funded using the site.

That stat is important. Unlike Indiegogo and other sites, Kickstarter requires campaigners to meet their goal or lose everything they worked for.

When You Wish varies from both models.

The company allows donors to choose whether or not their money stays with a project if the campaigner doesn’t meet the stated goal.

 

Where global meets local

 

Although crowdfunding sites have the ability to gather support from all over the world, the work to get a project rolling starts at home.

“The first 20 to 30 percent of a campaign is raised from your ‘first circle,’” Chapnick said. That means friends, family and other people who you sell the idea to on a personal level.

Only after money rolls in do strangers begin to take an interest and local projects or products take on a global feel.

In that way, the sites provide a platform for a community to band behind a project, much like the “Big Voice” film, which put a beloved institution — the Samohi choir — at the heart of its fundraiser.

The same characteristic that makes these sites work for local projects is what keeps people safe from fraudsters.

First, Chapnick said, crowdfunding is a lot of work. People have to make videos, do regular updates, provide good incentives and generally respond to the community from whom they’re asking money.

People looking to make a quick buck can find an easier way to do it.

Second, to get to the crowd, you have to get funding first from your closest friends and family.

Most will not defraud their mother, father or college roommate, Chapnick said.

 

The future

 

Crowdfunding may be teetering on the edge of an explosion.

With a flourish of the pen, President Barack Obama signed the Jumpstart Our Business Startups Act, or JOBS Act, in April.

In that legislation are provisions that legitimize crowdfunding as a regulated way to raise money to get a new business rolling.

It has great potential, Harvilicz said, because crowdfunding can mean raising capital without giving away one of a budding entrepreneur’s most valuable assets — equity in the new company.

“People should keep equity in their business and hold that very dearly, and as long as they can,” Harvilicz said.

That may yet be months or years off. The Securities and Exchange Commission (SEC) has not yet created the regulatory structure to deal with the new model, and it will have to create an exemption for the funding portals to register with the SEC as a broker.

Still, it’s a foot in the door, Chapnick said.

“We see it as a huge opportunity for sure,” Chapnick said.

 

ashley@smdp.com