From Sochi to Yerevan: Crowdfunding in the Caucasus
BY Onnik James Krikorian | Wednesday, February 12 2014
In July 2007, when the venue for the 2014 Winter Olympics was announced, writer-filmmaker Arnold van Bruggen and photographer Rob Hornstra embarked on an ambitious project to shine a light on the then little known Black Sea resort town of Sochi. “Never before have the Olympic Games been held in a region that contrasts more strongly with the glamour of the Games than Sochi. Just twenty kilometers away is the conflict zone Abkhazia. To the east, the Caucasus Mountains stretch into obscure and impoverished breakaway republics such as North Ossetia and Chechnya,” read the introduction to what was to become The Sochi Project.
“We had already returned from Georgia and Abkhazia and we knew that our interest in the Caucasus would become universal once everyone knew the Olympics would take place in Sochi,” van Bruggen told techPresident. “For us it was a chance to reach a wider audience with stories that we deemed important — for instance, the history of violence and conflict in the North Caucasus — and we decided that if we managed to get the money we needed through crowdfunding we would have total freedom in producing all the stories in the region that we wanted to.”
From 2009 to 2013, some 650 people were responsible for financially supporting 60-70 percent of the Sochi Project. The remainder, says van Bruggen, came from book sales of material produced during the multi-year work. “In our case this was extra important because we didn't ask people for a single donation,” van Bruggen says. “We asked for donations for each year of the project, but… the big but… was that we didn’t manage to make any money ourselves. We only managed to cover our costs, which were huge.”
Nevertheless, without it, van Bruggen and Hornstra would hardly have been able to complete a fraction of what they did. No wonder that crowdfunding is a model that others are now starting to examine in the region. Comprising Armenia, Azerbaijan, Georgia, and the Russian Federation republics, the Caucasus — the dividing line between Europe and Asia — is impoverished and riven by three frozen conflicts in the South and insurgency in the North. Human rights are violated on a daily basis and Freedom House rates only the media in Georgia as “Partly Free.” The rest of the region is considered to be “Not Free.”
Poverty levels remain high — and Georgia, with a GDP per capita of just $5,800 in 2012, is a case in point. However, it is also an example of how crowdfunding can step in to fill the gap. Borani ("Ferry"), for example, is a platform launched in 2012 by Simon Janashia and Levan Gambashidze, two university lecturers from Tbilisi, the country’s capital, which uses crowd funding to support socially vulnerable families. To date over 42,000 GEL (approx. US$24,000) has been donated by 1,015 people. Although that might not sound like much, it was enough to improve the quality of life for many.
“Usually our funding from Georgian citizens helps beneficiaries acquire household appliances such as washing machines and refrigerators,” says Gambashidze. “But last year Borani helped a family purchase a cow and today they are selling dairy products so have a stable source of income. We will try to fund similar cases like this in the future.”
But crowdfunding isn’t just about charity. One Georgian technological specialist has his own project to manufacture and market 3D webcam glasses, for example, and last year three academics from the United States and Gibraltar also successfully crowdfunded an ethno-musical project to document minority culture and tradition in Georgia. In neighbouring Azerbaijan too, American photographer Amanda Rivkin crowdfunded the second stage of her project to document stories along the multi-billion dollar Baku-Tbilisi-Ceyan (BTC) oil pipeline.
Her experience was a positive one. “If you keep your goals modest and deliver what you say you will then you have upheld your end of the social contract,” she says. “By giving you their money, supporters want to see the results. And they are your most dedicated audience. This is a very special group of people who will follow you and your work over the following years.”
But it is Armenia where the potential for crowdfunding might shine most of all. Alternative ways to fund civic initiatives are particularly relevant given a reduction in foreign aid in recent years. In 2013, U.S. assistance stood at $37.3 million, significantly down from $90 million in 2003. An additional $60 million to the Armenian Government available through the Millennium Challenge Account (MCA) was stopped following elections that failed to meet democratic standards. The U.S. Ambassador to the country, John A. Heffern, has been particularly supportive of crowdfunding and other social innovation initiatives.
“Working with non-traditional partners helps us assist and engage the Armenian public,” Ambassador Heffern told techPresident. “These partnerships and funding platforms can serve as models of how citizens can affect and promote change in Armenia.”
A prolific video blogger and social media personality, Ambassador Heffern says he became aware of its potential on Twitter. “The more active I became online, the more examples I saw of the impact that crowdfunding can have,” he says, adding that the U.S. Embassy has since set up a small team to specifically promote crowdfunding. “We have sponsored several briefings and webinars at the Embassy, but plan to do more. We hope to nurture Armenians who can consult and advise organizations hoping to launch crowdfunding campaigns.”
Of particular interest is attracting the involvement of Armenia’s large Diaspora. Numbering as many as 7 million outside of the present-day Republic, according to the U.S. Census Bureau there are officially 483,000 ethnic Armenians in the United States alone. Unofficial estimates reach as high as 1.5 million, but to put that into context, there are just 3 million people living in Armenia itself. That resource is often concerned and put off by high levels of corruption in Armenia while many, including Ambassador Heffern, would like to see them more engaged.
“I have met many times with Armenian-Americans both here and in the U.S.,” he says. “In virtually every meeting they ask me what they can do to help Armenia. Many diasporans are looking for safe, reliable, productive ways to help the Armenian people and, I believe, crowd-funding is one way to do just that. Donations via crowd-funding go directly to Armenian beneficiaries, in many sectors including civil society, culture, agriculture, and, start-ups, without going through government agencies or bureaucracies. Crowd-funding is people-to-people assistance that I see as a potentially effective way to promote bottom-up change.”
In particular, Ambassador Heffern mentions OneArmenia, a New York-based Not-for-Profit established by four prominent American-Armenians in 2011 to assist the republic to ‘set a new standard for transparent giving.’ Projects already include those aiming to develop sustainable farming methods in Armenia, establish a safe-house for victims of domestic violence, and to provide musical instruments to a children’s orchestra. Another platform is Ayo ("Yes") which was created by the Fund for Armenian Relief (FAR), a humanitarian organization founded in the U.S. following the devastating 1988 Armenian Earthquake.
“We could choose from one of the existing platforms such as Indiegogo and others through which to raise funds,” says Ayo Project Director Armen Anmeghikyan, “but each of them had some drawbacks so we ended up creating our own which is not only adjusted to all our specific needs, but also saves us the funds that we would pay existing platforms as a commission fee. And since Armenia does have a unique connection to a diaspora in the West, we think that it does have an advantage in crowdfunding.”
Anmeghikyan also says he hopes Ayo will foster a new generation of philanthropists. A Florida-based benefactor, Marta Batmasian, already covers the administrative costs and credit card transaction fees for the site.
But despite the potential, there are still obstacles to overcome. While PayPal does operate in the region, it does so only partially. In particular, it is not possible for funds generated by crowdfunding to be transferred to local bank accounts. That’s also another reason why domestic crowdfunding platforms are important until the situation changes, something the U.S. Ambassador to Armenia is lobbying for. Many also underestimate the time and effort required to successfully implement and manage a crowd funding campaign. Again, platforms such as Ayo offer a solution.
“Because PayPal does not operate fully in Armenia, we used a U.S.-based account instead,” says Anmeghikyan. “And though team members work remotely, each component is treated with special care, starting from the promotional video to sharing information on social media and communication with donors and supporters. Since the entire fundraising process is transparent, we work hard to follow-up and make reporting of financed projects just as transparent too. Crowdfunding might seem quite simple from the outside, but it’s actually quite a complex and challenging process. “It requires a lot of devotion and determination as well as expertise,” he says.
Adrineh Gregorian, an American-Armenian filmmaker based in Yerevan who uses crowd funding extensively to produce documentaries on subject matters such as domestic violence and Armenia-Turkey relations, agrees, but also believes the effort pays off. “In order to create a sustainable Armenia, it is imperative to help develop, participate, and act as a resource to civil society,” she told techPresident. “And with crowdfunding, even if you don't meet your goal, you can still use it as a tool to share information.”
Onnik James Krikorian is a journalist, photographer and media consultant from the United Kingdom based in the South Caucasus. From 2007-2012 he was the Caucasus Regional Editor for Global Voices.
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