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Is KickStarter just a charitable contribution without a tax deduction?

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  • WraithoneWraithone Salt Lake City, UTPosts: 3,593Member Uncommon
    Originally posted by Dauzqul
    Originally posted by CalmOceans

    Kickstarter is the exact opposite of a charity, it's capitalism.

    You buy assets and support a company trying to make assets.

    Charity is a social platform, it doesn't involve ownership or profits.

    The person donating doesn't get any return. It's ultimately just a donation.

    Correction. They do not receive any money in return.  But if things work out, they may get an entertaining game. Thats really all I'm concerned about.

  • zymurgeistzymurgeist Pittsville, VAPosts: 5,212Member Uncommon
    Originally posted by CalmOceans
    Originally posted by zymurgeist

     You cannot make money by giving to a kickstarter. Kickstarter is not a financial investment.

     

    You don't need to make money to be part of capitalism, when you buy a product in a free market economy you are part of capitalism, you are investing money in kickstarter with the goal to own capital, that is pure capitalism. It sure as hell is not the same as charity.

    I don't even know why I'm arguing something this straighforward, you can have your opinion and I'll leave it at that since I think you're being stubborn for no apparent reason.

     You have a flawed grasp of the concept of capitalism.  Purchasing goods for consumption and use is not capitalism. Goods can be sold to obtain capital but are not themselves capital. What is most straightforward is you don't understand Kickstarter. Kickstarter contributions are not a financial instrument. They are a gift.

     

    "Strong and bitter words indicate a weak cause" ~Victor Hugo

  • fenring101fenring101 Great YarmouthPosts: 80Member Uncommon

    Kickstarter = Gaming Industries version of Hobo's...

     

    Spare some change?

     

    I could understand it if you were given stock in the company, or that your money would be returned if the minimum requirements were not met. But many of these people see it as a way to shake a tin infront of clueless idiots with more money than sense and get a bit of free cash for minimal effort and almost no risk.

     

    Oh we were $1000 short of being able to start the project, if we dont get the donations then the game will die even though you have already donated a ton of $$$

     

    You dont give Hobo's cash because it just goes on booze or drugs. For these sort of Hobo's then its simple; if it was a good idea and they were actually serious about making it work they would find investors. You know... those people who actually gain something from it.

  • zymurgeistzymurgeist Pittsville, VAPosts: 5,212Member Uncommon
    Originally posted by Wraithone
    Originally posted by Dauzqul
    Originally posted by CalmOceans

    Kickstarter is the exact opposite of a charity, it's capitalism.

    You buy assets and support a company trying to make assets.

    Charity is a social platform, it doesn't involve ownership or profits.

    The person donating doesn't get any return. It's ultimately just a donation.

    Correction. They do not receive any money in return.  But if things work out, they may get an entertaining game. Thats really all I'm concerned about.

     This is a metaphorical investment. You are "investing" in the future of gaming. An honorable philanthropic pursuit.

    "Strong and bitter words indicate a weak cause" ~Victor Hugo

  • FromHellFromHell NY, NYPosts: 1,311Member
    Originally posted by Terranah

    Back in the old days, devs released a crappy game and prayed some poor idiots bought it before the word spread it was shite.  Hell, devs still do this today.

     

    But now days we have what's called kick starter where you just promise a game and people will give you money.  Can it be legitimate?  Yes.  But the potential for abuse is great in my opinion.  What are the safe guards so people don't lose their money?

     

    I pay $60 for a game if I like it.  There's a lot of great ideas or games I would like to play but have no funding.  Would I be willing to pledge $1000 or $10,000 to a game's development to see it to fruition with no payout other than to play what in the end is a $60 game for what amounts to a few online trinkets, a title, or some other digital equivalent marking me as a founder.  Hell to the fooking no.

     

    Now...if there was a promise to share in the rewards at release, like purchasing of stock or bonds, I might have a different view.

     

    Back in the old days, gaming was about having a good time.  Now it's all about microtransaction, freetoplay scams and finding ways to part little nerds from their hard earned cash. 

     

    That's my take.  Anyone here made any money from their 'investment' in kickstarter?

    You don´t INVEST in Kickstarter, you get rewards.

     

    I backed

    Star Citizen

    Elite Dangerous

    Double Fine Adventures

    The new Dreamfall / Longest Journey, currently online

     

    People back games of companies who have TRACK RECORD of successful games, I don´t give money to John Doe to "create the best MMO evah"

    Secrets of Dragon?s Spine Trailer.. ! :D
    http://www.youtube.com/watch?v=fwT9cFVQCMw

    Best MMOs ever played: Ultima, EvE, SW Galaxies, Age of Conan, The Secret World
    http://www.youtube.com/watch?v=T2X_SbZCHpc&t=21s
    .


    .
    The Return of ELITE !
    image

  • SaerainSaerain Barrington, RIPosts: 944Member Uncommon
    Originally posted by Terranah
    Originally posted by Wraithone

    I've always looked at it as encouraging the production of games I'm interested in.  I can always get more money, but I can't get entertaining games, nearly as easy.  I look at the past history of the Dev's and also their presentation.  I'm more than willing to risk some money to let people try their hand at producing an entertaining game.

    Given how risk adverse most suits tend to be, is it any wonder that we see the endless number of limited difference theme games we have for years now?

    What we DON"T need is for the heavy hand of government to get involved, to "protect" people.  Everyone should be expected to do their own research, and make their own choices.

     What 'risk' are you speaking of.  You are giving them money.  If they steal it, you never see it again.  If they reach their milestone, you never see it again.  There is no risk involved, only giving them money.  Maybe you will get the money back if the company or person is honest, but why take a risk you don't have to?  Because you like to play good games.  Hell we all like that.  But that's not reason throw money at anyone making promises.

    I don't understand. You ask what the risk is, then you describe exactly what the risk is, then you say there's no risk involved, and then you call it a risk. I'm dizzy.

     

    Originally posted by Terranah

    Anyone know what the percent of games kick started acttually get released to any kind of critical aclaim, or at the very least hailed as a success by gamers (which is the only true measure I care about anyway)?

    The major ones have only just been funded in terms of typical game development. Get real. We'll let you know.

    But considering how phenomenal the reception has been of the earliest-funded (and even thereby lesser-funded) games that have had time to release, like FTL, I don't think it's unreasonable that people have pretty significant hope for the projects more recently and dramatically funded.

    Either way, this ball has only just started rolling.

    I think it's a tremendously important development in the funding of game development, and that it's exciting to see what developers actually want to make and where that overlaps with what players want to pay for, and how much they'll pay for it. The idea that publishers or private investors have a better sense of good game design than gamers and developers is comical in comparison to the crowdfunding model.

    Surely, there are good publishers, and investors with good foresight, but goddamn are they rare. Most of the time, the developer-publisher relationship, footing the bill aside, seems detrimental to the product, and both publishers and investors routinely fail to recognize innovation or refuse to take a risk on it. Developers are far more keen to take that chance, at greater risk to themselves, because they personally care about it.

    Gamers often don't have the slightest clue how difficult it is to achieve what they want, and developers often don't have a clue as to how niche their own tastes might be, but the publisher middle-man has been a very problematic bridge that we should be eager to experiment with alternatives to, and crowdfunding is at the very least a very promising one.

    Favorites: EVE, VG, LotRO | Playing: None | Anticipating: SC, ED, TD, EQN, CU
  • TorvalTorval Oregon CountryPosts: 7,209Member Uncommon
    Originally posted by zymurgeist
    Originally posted by CalmOceans
    Originally posted by zymurgeist

     You cannot make money by giving to a kickstarter. Kickstarter is not a financial investment.

     

    You don't need to make money to be part of capitalism, when you buy a product in a free market economy you are part of capitalism, you are investing money in kickstarter with the goal to own capital, that is pure capitalism. It sure as hell is not the same as charity.

    I don't even know why I'm arguing something this straighforward, you can have your opinion and I'll leave it at that since I think you're being stubborn for no apparent reason.

     You have a flawed grasp of the concept of capitalism.  Purchasing goods for consumption and use is not capitalism. Goods can be sold to obtain capital but are not themselves capital. What is most straightforward is you don't understand Kickstarter. Kickstarter contributions are not a financial instrument. They are a gift.

    Great explanations Zymurgeist.

    In short, to answer the OPs title:  No.  It is a non-charitable donation which doesn't qualify as a charitable tax deduction.

  • ArChWindArChWind Some Place, WIPosts: 618Member Uncommon

    I know this won't go over well with the majority here.

    KIckstarter and Crowdfunding are a charity and were founded to support non revenue ideas. It has loopholes that allow a company to put up there ideas and hype support. Expect the ramifications coming to charity laws to get some changes once governments get involved. Big money changing hands will get lawmakers attention. You can count on it.

    So what is to keep BIG companies from spawning smaller unknown companies and getting 100% risk free investment capital? Nothing.

    The thing about this is that it has taken a route to abuse and is in itself a grey area of law where a not-for profit idea is being funded for profit. If you look a MMORPGs as it is stated on projects pages that a business startup is not allowed then how is a MMORPG not a business startup since the MMORPG itself is a business? Without the MMORPG the business can’t exist.

  • VrikaVrika FinlandPosts: 2,583Member Uncommon

    Kickstarter would only be charity is backers were not promised anything valuable in return. So many Kickstarter projects promise finished (and valuable) products to the backers that it's a purchase, not a charity.

  • AerowynAerowyn BUZZARDS BAY, MAPosts: 7,928Member
    Originally posted by Vrika

    Kickstarter would only be charity is backers were not promised anything valuable in return. So many Kickstarter projects promise finished (and valuable) products to the backers that it's a purchase, not a charity.

    nm after reading the kickstarter terms they ARE required to come through or provide a refund

    I angered the clerk in a clothing shop today. She asked me what size I was and I said actual, because I am not to scale. I like vending machines 'cause snacks are better when they fall. If I buy a candy bar at a store, oftentimes, I will drop it... so that it achieves its maximum flavor potential. --Mitch Hedberg

  • zymurgeistzymurgeist Pittsville, VAPosts: 5,212Member Uncommon
    Originally posted by Vrika

    Kickstarter would only be charity is backers were not promised anything valuable in return. So many Kickstarter projects promise finished (and valuable) products to the backers that it's a purchase, not a charity.

     It's not a charity because the recipient isn't a nonprofit entity. It's not a purchase because it's not a payment for an item of like value. If I gave you $5,000 and you gave me a token of appreciation worth $5.00  that's not a purchase. It's a gift. Easter Seals gives Easter Seals to donors. They are a charity.

    "Strong and bitter words indicate a weak cause" ~Victor Hugo

  • VrikaVrika FinlandPosts: 2,583Member Uncommon
    Originally posted by zymurgeist
    Originally posted by Vrika

    Kickstarter would only be charity is backers were not promised anything valuable in return. So many Kickstarter projects promise finished (and valuable) products to the backers that it's a purchase, not a charity.

     It's not a charity because the recipient isn't a nonprofit entity. It's not a purchase because it's not a payment for an item of like value. If I gave you $5,000 and you gave me a token of appreciation worth $5.00  that's not a purchase. It's a gift. Easter Seals gives Easter Seals to donors. They are a charity.

    I disagree with the part in red. Kickstarter projects go to great lengths trying to promise backers the finished game, artbooks, miniature figures, and other goodies. As a result the promised value of what a backer gets if the game is released is usually significant compared to the money backer spends. That makes it a purchase.

    If kickstarter projects really promised you something like 5$ worth for donating them 5 000$ dollars, then it would be a donation made to them and not a purchase. But most of the backers are promised so valuable rewards that it does not qualify as a donation.

  • worldalphaworldalpha Milton, ONPosts: 403Member
    With my IndieGogo campaign, I viewed it as a way for interested players to preorder as we were in closed beta and the game was getting completed with or without funding.   The funds were used to increase our marketing budget.

    Thanks,
    Mike
    Working on Social Strategy MMORTS (now Launched!) http://www.worldalpha.com

  • CalmOceansCalmOceans BergenPosts: 2,273Member
    Originally posted by zymurgeist

     It's not a purchase because it's not a payment for an item of like value.

    Good lord, you're trying to argue what kickstarter is or isn't and I let is slide because you had a different opinion, but you don't even know what kickstarter is.

    The biggest project actually are a purchase, Pebble sold over 100,000 pebble watches through kickstarter, OUYA over 60,000 consoles, etc

    The pledge is the purchase of the item in many cases, in fact in almost all of the major kickstarter projects, the pledge is the purchase for the item. You are buying the item.

  • JenuvielJenuviel Seattle, WAPosts: 960Member

    I just approach it as if I'm a very, very low-rent patron of the arts. I have relatively specific tastes in games, and those tastes aren't being addressed by the mainstream gaming industry. By supporting the smaller groups who, ostensibly, are trying to "get some money so they can make games" rather than the big guys who are "making games so they get get a bunch of money," I benefit not only by potentially getting a product I can actually enjoy (artists in the Renaissance frequently gave their patrons finished works), but I get to feel more hopeful about the future because I'm helping to enable broader vistas.

     

    Is it capitalism? Sort of.  Is it charity? Sort of.  Is it worth it to me? Definitely.  I'd rather give $20 to people with ideas I believe in than $60 for a tired retread that's been monetized to infinity and beyond. As far as I'm concerned, I've already got my money's worth from Harebrained Schemes. The developer videos they've released are full of passion, humor and excitement, they're detailing brave ideas and how those ideas are currently being implemented.

     

    Here's the big part, though: how many people did it take to get that to happen? 36,276. How many people did it take to fund Amanda Palmer's lastest album? 24,883. Kickstarter helps creative people find their audiences, big or small. It helps artists find patrons. It may even help scammers find marks, but, to me, it's worth the risk.

  • AerowynAerowyn BUZZARDS BAY, MAPosts: 7,928Member
    Originally posted by CalmOceans
    Originally posted by zymurgeist

     It's not a purchase because it's not a payment for an item of like value.

    Good lord, you're trying to argue what kickstarter is or isn't and I let is slide because you had a different opinion, but you don't even know what kickstarter is.

    The biggest project actually are a purchase, Pebble sold over 100,000 pebble watches through kickstarter, OUYA over 60,000 consoles, etc

    The pledge is the purchase of the item in many cases, in fact in almost all of the major kickstarter projects, the pledge is the purchase for the item. You are buying the item.

    nm after reading the kickstarter terms they ARE required to come through or provide a refund

    I angered the clerk in a clothing shop today. She asked me what size I was and I said actual, because I am not to scale. I like vending machines 'cause snacks are better when they fall. If I buy a candy bar at a store, oftentimes, I will drop it... so that it achieves its maximum flavor potential. --Mitch Hedberg

  • majorsmerkmajorsmerk Leesburg, VAPosts: 9Member Uncommon
    Capitalism is based on a gamble.   'Free market' means you don't get to tell other people what something is worth to them.
  • LadyEupheiLadyEuphei Indianapolis, INPosts: 223Member

    Hi, we acctually discussed this a few months ago. Kickstart was contacted and their response is shown in the link. The subject is about greed monger, but it has to do with all of kickstarter mostly.

    ladyeuphei.com article

    Here is also where mmorpg columnist adressed this same issue.

    mmorpg.com

    image

  • Ramonski7Ramonski7 Aurora, ILPosts: 2,656Member Uncommon
    I'm EA. I just sold The Earth and Beyond ip to a fake developer called AE who is actually a front company for EA in Asia. I tell them to start a Kickstarter page to get Earth and Beyond 2 off the ground. Any laws stopping them from collecting from all the clueless saps (me included)? Nope.

    image
    "Small minds talk about people, average minds talk about events, great minds talk about ideas."

  • DauzqulDauzqul Detroit, MIPosts: 1,405Member Uncommon

    lol at everyone trying to sound smart.

     

    This is how easy it really is to understand:

    #1. Developer needs money, makes a blog to generate hype, and will sometimes offer an "exclusive" incentive, e.g., in-game title, cape, etc.

    #2. You give money towards the development of a cool product. That is it. No investments or returns.

     

     

     

    /end thread

     

  • evilastroevilastro EdinburghPosts: 4,270Member
    Originally posted by Sal1
    Is KickStarter just a charitable contribution without a tax deduction? Is that what Kickstarter really is?

    Depends on what they offer for your donation. In many cases yes. In some cases you get serverely overvalued items and promises.

    Personally I wouldn't do it, I don't get paid until I finish my work, why should they get my money before they deliver a product that I can judge?

  • WarmakerWarmaker San Diego, CAPosts: 2,231Member
    I really do love KickStarter.  It always amazes me the new ways people find in parting fools with their money.

    "I have only two out of my company and 20 out of some other company. We need support, but it is almost suicide to try to get it here as we are swept by machine gun fire and a constant barrage is on us. I have no one on my left and only a few on my right. I will hold." (First Lieutenant Clifton B. Cates, US Marine Corps, Soissons, 19 July 1918)

  • zymurgeistzymurgeist Pittsville, VAPosts: 5,212Member Uncommon
    Originally posted by CalmOceans
    Originally posted by zymurgeist

     It's not a purchase because it's not a payment for an item of like value.

    Good lord, you're trying to argue what kickstarter is or isn't and I let is slide because you had a different opinion, but you don't even know what kickstarter is.

    The biggest project actually are a purchase, Pebble sold over 100,000 pebble watches through kickstarter, OUYA over 60,000 consoles, etc

    The pledge is the purchase of the item in many cases, in fact in almost all of the major kickstarter projects, the pledge is the purchase for the item. You are buying the item.

     You need to reread the kickstarter rules. They don't actually have to deliver those things although most companies will. You would have a hell of a time making a fraud case if they didn't because, just like Kickstarter says, it's a donation.  Unforseen circumstances do arise. That's not an opinion. It's a fact. Kickstarter can be a wonderful thing but go in with your eyes open.

    "Strong and bitter words indicate a weak cause" ~Victor Hugo

  • WraithoneWraithone Salt Lake City, UTPosts: 3,593Member Uncommon
    Originally posted by Aerowyn
    Originally posted by Vrika

    Kickstarter would only be charity is backers were not promised anything valuable in return. So many Kickstarter projects promise finished (and valuable) products to the backers that it's a purchase, not a charity.

    says who? where? never once did i assume when putting money into kickstarter the project is a guaranteed to every be released

    why put money into any "charity" if you aren't getting a return that directly benefits you(aside from maybe a tax break).. can't believe how selfish people are here sometimes.. you think people spend millions upon millions a year on various research projects to cure diseases because they only want something directly back to benefit them?

    sometimes people believe in an idea and want to do what they can to see it come to light

    also kickstarters always come with tons of perks so you are not just giving the money away for nothing unless of course the game never gets made

    There are damn few guarantees in real life... Why would you expect one from Kickstarter?  Its a simple process. Do your own research and make your own choices. If you see nothing you wish to back, then so be it.  If I happen to lose the money involved, I'll just shrug, and write it off.  I can always get more money. I can't always find an entertaining game to play.

    But I seriously suspect, that as the money moves up from the minor leagues, that the investor types will use their politicians to strangle this with endless regulations, to make certain that it doesn't become a route of effective competition. It will no doubt be under the guise of "protecting" people.

  • VrikaVrika FinlandPosts: 2,583Member Uncommon
    Originally posted by zymurgeist
    Originally posted by CalmOceans
    Originally posted by zymurgeist

     It's not a purchase because it's not a payment for an item of like value.

    Good lord, you're trying to argue what kickstarter is or isn't and I let is slide because you had a different opinion, but you don't even know what kickstarter is.

    The biggest project actually are a purchase, Pebble sold over 100,000 pebble watches through kickstarter, OUYA over 60,000 consoles, etc

    The pledge is the purchase of the item in many cases, in fact in almost all of the major kickstarter projects, the pledge is the purchase for the item. You are buying the item.

     You need to reread the kickstarter rules. They don't actually have to deliver those things although most companies will. You would have a hell of a time making a fraud case if they didn't because, just like Kickstarter says, it's a donation.  Unforseen circumstances do arise. That's not an opinion. It's a fact. Kickstarter can be a wonderful thing but go in with your eyes open.

    Zymurgeist you need to reread the Kickstarter rules, like the part where it says:

       "Project Creators are required to fulfill all rewards of their successful fundraising campaigns or refund any Backer whose reward they do not or cannot fulfill".

    Or where it says:

       "By creating a fundraising campaign on Kickstarter, you as the Project Creator are offering the public the opportunity to enter into a contract with you. By backing a fundraising campaign on Kickstarter, you as the Backer accept that offer and the contract between Backer and Project Creator is formed"

    Kickstarter Terms of Use are clear that it's not a donation, it's a contract between project creator and the backer. And the project creators are obliged to either fullfill their promises or refund the backers.

    Source for quoted rules: http://www.kickstarter.com/terms-of-use

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