I didn't realize this, but “Kickstarter now raises more money for artistic projects each year than the National Endowment for the Arts (NEA).” In light of that, an HBS professor decided to study whether the NEA and people on Kickstarter differ in how they select which projects to fund.

"First, it's important to consider that there's a bit of an art to raising money from the crowd," Nanda says. "Sometimes the judges liked projects for which the artists hadn't quite figured that part out. That said, most of the disagreements were on projects that the crowd liked but that the judges would potentially have given less money to or not have funded at all. Those particular crowd favorites showed more variance. They were more likely to be breakout hits, but also included one flop that judges might potentially have been able to stop."

The crowd aggregation allowed the funding of many projects that were slightly outside the purview of what judges focused on, suggesting that Kickstarter's democratization enables a greater breadth of artistic production, says Nanda. At the same time, the study recognized that Kickstarter supporters weren't always applying the same kind of discipline and rigor in their analysis of projects. They simply liked a project and supported it, or didn't.

"Overall, the general sense is that the projects that found success on Kickstarter were by no means crazy," Nanda says. "Quite the opposite. The average size of the project in our sample was similar to the average size of a project funded by the NEA. And yet, you can imagine that the kinds of projects people put on Kickstarter and the kind they submit to the NEA are quite different in composition and style, which is why we can't definitively say whether crowdfunding is a substitute to grant-making bodies such as the NEA."

The one advantage of Kickstarter over a grant from the NEA is that your supporters on Kickstarter effectively become your first audience. That is, given a fixed amount of funding, I'd hypothesize that getting that amount in small doses from lots of people is more optimal than getting all of it from one entity or person. It's a healthier, lower risk distribution of funds.

Longer term, the rise of crowdfunding is part of what I consider a healthy trend towards disintermediation in the arts, putting more of the tools of fundraising, production, distribution, marketing, etc., directly in artists' hands. Kickstarter doesn't just enable artists to raise money, it gives them a direct line to many of their fans, one they can turn to even after the project is complete.