Issue 5, 2015. October-November



Crowdfunding is gaining popularity in Georgia, taking the place of ad hoc campaigns to raise emergency assistance.

Joseph Larsen

Georgia is well known for its dynamic economy. This year, Georgia ranked fifteenth in the World Bank's "Ease of Doing Business" survey, receiving high marks for minimal bureaucracy, business-friendly procedures and easy access to credit. It has also become a popular base for writers, artists, IT professionals and entrepreneurs, with a friendly atmosphere, low living costs and simple immigration procedures getting a lot of credit.

The burgeoning country is more than a hotbed for traditional business models, however. It has also hosted a large number of crowdfunding campaigns. Defined by scholars David M. Freedman and Matthew R. Nutting as "a method of collecting many small contributions by means of an online funding platform," crowdfunding has become a popular and relatively easy way to raise money for everything from medical procedures to magazine launches to disaster relief.

$8.3 Million Raised for Flood Victims

Popular platforms - websites which host the initiatives in exhange for a cut of the proceeds, usually between 4 and 10 percent - include Kickstarter, Indiegogo and GoFundMe, among others. Each site has its own niche. Kickstarter is the biggest name but hosts only all-or-nothing campaigns, meaning that the bank accounts of contributors are not charged unless a predetermined funding target is reached. Indiegogo also offers flexible -funding campaigns that allow recipients to keep any amount raised. GoFundMe is known for donation-based crowdfunding; contributors receive only the happiness of knowing their money went for a worthy cause.

Research and advisory firm Massolution projects that the crowdfunding industry will raise $34.4 billion worldwide in 2015. That would represent a more than five-fold increase from just two years ago, when when the industry raised roughly $6.1 billion.

Georgian charities like American Friends of Georgia have traditionally depended on galas and auctions to raise funds to help the vulnerable

A modest but growing chunk of that money is being funneled into Georgia-based initiatives.

A watershed moment in Georgia's short crowdfunding history came after the June 13-14 flooding, which resulted in the deaths of 19 people and the destruction of more than 105 homes. Roughly $8.3 million in relief funding was raised from private donors, and of that, a significant proportion was raised by a single crowdfunding campaign.

Tbilisi native Maka Meshveliani launched the "Help Tbilisi Recover from Flooding Campaign" on June 15, just a day after the flooding. "I created it in half an hour," she told Within a month, the campaign had raised nearly $79,970 from 802 individual donors. Meshveliani was impressed by the simplicity of launching the campaign (she used Indiegogo's flex-funding option) as well as its success. "I never thought we would get to $10,000. I just wanted to create a platform for people to help the country."

The largest single donation came from the UK-based rock group Placebo, which contributed $39,974 (the band put up its entire honorarium for playing at July's Tbilisi Open Air music festival). The money raised by Meshveliani's campaign will go toward psychiatric therapy for children affected by the flooding.

Crowdfunding campaigns have also been successful in helping get non-profit and artistic initiatives off the ground. This August, Kiwi Café - Tbilisi's first not-for-profit vegan restaurant - opened after raising $1,760 from a flexible-funding campaign on Indiegogo. The project's founders used crowdfunding to supplement income received from other sources, so that they were able to launch despite missing their target of $4,000.

At the time of writing, archival project Tbilisi In/Sights was in the middle of a €1,900 all-or-nothing campaign via KissKissBankBank. Tbilisi In/Sights is an "informal archives" project - project leader Katharina Stadler told that it aims to "look at Tbilisi over the past 100 years through the eyes of the people who live and work here" - and had attained more than half its target through a rewards-based campaign. Contributors will receive a gift from the organization in proportion to the sum contributed.

More Popular with Donors Abroad

Georgia's economic dynamics make it a logical destination for international crowdfunding dollars. The low cost of labor and other production inputs mean a few thousand dollars or euros can make a big difference. "One hundred pounds goes a lot further in Tbilisi than it would in Bristol," says Tbilisi-based journalist Onnik James Krikorian. What's more, major crowdfunding platforms now disburse funds to Georgian banks, meaning that campaigners can receive funds faster and with less hassle than in the past.

The flood of foreign finance flowing into Georgia's crowdfunding iniatives is yet to be matched by large domestic contributions, however. For example, of the $79,970 raised by the "Help Tbilisi Recover from Flooding Campaign," only $5,587 came from within Georgia. And Stadler estimated that only €30-40 of the more than €1,000 raised by Tbilisi In/Sights came from domestic contributions. Part of this gap is a lack of awareness - and a lack of disposable income - on the part of many Georgians. "The concept of crowdfunding has not really found its place [in Georgia]," Stadler said.

Krikorian, for one, sees potential in the domestic market. "Georgians are natural for crowdfunding," he commented, pointing to the fact that informal fundraising projects can be seen all over Tbilisi. Given the dynamism of Georgia's social and business atmosphere, it's not difficult to be optimistic about crowdfunding initiatives in the country, both for campaigns with a local focus and those designed to attract international donors. As Krikorian put it, "all it takes is an idea and the ability to communicate."