Fund Your Project With The Threshold Pledge System

Posted: 2009-06-20

The threshold pledge system is actually fairly common in everyday life. How often does a group of friends pool together money to buy something, or commit to doing something if the other friends make the same commitment? here are three applications with examples: 

  1. Monetary goal
    • Example: A group wants to make a purchase (parhaps to receive a group discount), and they all pitch in
    • Example: A project can only get started with a certain amount of money, so interested people donate to meet the contribution goal
  2. Group action
    • Example: An action like conserving energy or writing to the government only has a significant effect in numbers, so pledges are made as a group
  3. Monetary incentive
    • Example: Incentive is created for a public good that can only be supplied by certain people like a copyleft work or a missing feature in a free software project by donors who pledge money for whoever completes the job for them. 
In applying this system, the ultimate goal of a project cannot be reached until a certain amount of pledges are made. There is also usually an assurance contract which means that if the goal is not met by a specified deadline, then no pledges are collected, or all pledges are refunded. 
Here are some websites which are really helpful in organizing fundraisers and group actions using the threshold pledge system: 
  • The Point - Good for for applications 1 & 2 
  • Fundable - Good for application 1
  • microPledge - Good for application 1, but currently frozen in development
  • PledgeBank - Good for application 2
  • COfundOS - Good for application 3 applied specifically to open source software
I hope you find this solution and these websites useful for whatever projects you haven't yet been able to take on without this!