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The Pub at MMORPG.COM  » Is KickStarter just a charitable contribution without a tax deduction?

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71 posts found
  CalmOceans

Apprentice Member

Joined: 5/06/11
Posts: 1815

3/06/13 4:04:40 PM#21
Originally posted by zymurgeist
Originally posted by CalmOceans
Kickstarter is the exact opposite of a charity, it's capitalism.

 No part of capitalism involves throwing money away with no hope of return.

no sure what you're trying to say, capitalism is the ability to own capital and invest capital in a free market economy, this is what kickstarter is, regardless of the risks

charity is socialism,  you invest in social needs and use a monetary system to accomplish this

  CalmOceans

Apprentice Member

Joined: 5/06/11
Posts: 1815

3/06/13 4:05:33 PM#22
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.

That's not what KickStarter is, though. You don't invest with KickStarter. It's 100% donation. Games, however, will usually offer some virtual incentive, e.g., beta key, cape, etc.

As far as I'm aware, people who invest for example in OUYA, also have bought the product.

It's a free market where people invest in capital for the chance of ownership, that's capitalism at play.

  Yamota

Advanced Member

Joined: 10/05/03
Posts: 6506

"I fight so you don't have to."

3/06/13 4:09:57 PM#23
Originally posted by Terranah

The only return you will get is fun playing the game, should it ever be released.  What percent of all games kickstarted have been released?

 

Kickstarter takes 5% off the top of every contribution.  Pretty nice gig eh?  They do not garuntee your money back (thus releasing their own personal liability) should the company not meet the milestone or just flat out defraud you, because your money is given to the company or person making the game.  It is then the person or companies responsibility to pay the money back should they not meet their goals.  

 

I have 'investments' as well.  They pay me 5k per month, every month.  That is an 'investment'.  Kickstarter is just a way of donating money, as the OP said, without tax benefit.  Essentially you are just giving money away, and a fool is easily parted from his money as any scam artist can attest.

 

But as I stated, are there legitmate kickstarter projects out there, yes there are.  But think carefully before throwing your money down a black hole never to see again.

You are essentially correct. Problem is that there are no producers funding sandbox, virtual world MMORPGs so if us gamers who want to have such a game made, our only choice seems to be crowdfunding sites like Kickstarter.

But yes, the risk for getting scammed is high...

  zymurgeist

Hard Core Member

Joined: 12/24/04
Posts: 5185

3/06/13 4:12:02 PM#24
Originally posted by CalmOceans
Originally posted by zymurgeist
Originally posted by CalmOceans
Kickstarter is the exact opposite of a charity, it's capitalism.

 No part of capitalism involves throwing money away with no hope of return.

no sure what you're trying to say, capitalism is the ability to own capital and invest capital in a free market economy, this is what kickstarter is, regardless of the risks

charity is socialism,  you invest in social needs and use a monetary system to accomplish this

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

Charity is not socialism. Governments aren't charities. Socialism is forced redistribution of wealth by government for an often undefined "common good".

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

  CalmOceans

Apprentice Member

Joined: 5/06/11
Posts: 1815

3/06/13 4:15:21 PM#25
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.

  anemo

Novice Member

Joined: 12/24/10
Posts: 699

3/06/13 4:16:02 PM#26
Kick Starter funds are taxed unde US law.  As for non-US companies don't know.

Practice doesn't make perfect, practice makes permanent.

"There are still vast swaths of our planet's surface in which it's surprisingly easy to lose things. Even a ship the size of a large building." Richard Fisher

  Wraithone

Hard Core Member

Joined: 7/09/04
Posts: 3565

If you can't kill it, don't make it mad.

3/06/13 4:22:31 PM#27
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.

  zymurgeist

Hard Core Member

Joined: 12/24/04
Posts: 5185

3/06/13 4:27:30 PM#28
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

  fenring101

Advanced Member

Joined: 7/31/08
Posts: 80

3/06/13 4:28:59 PM#29

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.

  zymurgeist

Hard Core Member

Joined: 12/24/04
Posts: 5185

3/06/13 4:32:42 PM#30
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

  FromHell

Novice Member

Joined: 11/10/12
Posts: 1338

3/06/13 4:32:42 PM#31
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"

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Best MMOs ever played: Ultima, EvE, SW Galaxies, Age of Conan, The Secret World
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  Saerain

Advanced Member

Joined: 3/27/06
Posts: 945

3/06/13 4:42:41 PM#32
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

  Torvaldr

Elite Member

Joined: 6/10/09
Posts: 5670

3/06/13 5:25:27 PM#33
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.

I think a mind wipe so people could play an mmo like it was their first time again, would be easier to build than a new mmo people here would actually like. - DamonVile

  ArChWind

Hard Core Member

Joined: 3/19/11
Posts: 490

3/06/13 7:08:16 PM#34

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.

  Vrika

Elite Member

Joined: 10/03/05
Posts: 2025

3/06/13 7:26:40 PM#35

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.

  Aerowyn

Novice Member

Joined: 2/20/12
Posts: 7969

3/06/13 7:31:26 PM#36
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

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  zymurgeist

Hard Core Member

Joined: 12/24/04
Posts: 5185

3/06/13 7:40:07 PM#37
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

  Vrika

Elite Member

Joined: 10/03/05
Posts: 2025

3/06/13 8:04:58 PM#38
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.

  worldalpha

Novice Member

Joined: 11/03/11
Posts: 401

Working hard on WorldAlpha

3/06/13 8:42:49 PM#39
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

  CalmOceans

Apprentice Member

Joined: 5/06/11
Posts: 1815

3/06/13 9:06:33 PM#40
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.

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