The Kickstarter Potato Salad Guy Should Probably Give the Money to Charity

A blog about business and economics.
July 8 2014 1:41 PM

The Kickstarter Potato Salad Guy Should Probably Give the Money to Charity

Potato salad = profits


At the moment, the famous potato salad Kickstarter campaign has raised more than $40,000, with 24 days of the pledge drive left to go. Because donors can cancel or adjust their pledges, that total will probably fluctuate a bit. Nonetheless, it’s a boatload of money, and I’m guessing the final tally will be solidly in the five-figures. More than 3,700 donors have chipped in, and they’re not all going to disappear once they’ve had their laugh.

Currently, Zack Brown, the 31-year-old Columbus, Ohio, software company owner who created the Kickstarter, says he plans to use the money for a giant party over Labor Day weekend. “All these wonderful people are making my dream of spreading joy and humor in the world come true,” he told ABC News. “We're going to throw a massive party in Columbus and the whole Internet is invited. We are going to do right by the Internet.”

This is a fine goal. But while everybody is still paying attention, I’d just like to reiterate that instead of burning all of his proceeds in one big potato potlatch, Brown could donate at least some of those dollars to, oh, maybe a local food bank.


Technically, Kickstarter doesn’t allow users to raise money for charity. However, creators are allowed to pocket profits when their projects are overfunded, and do with them as they please. Here’s the relevant section of Kickstarter’s FAQ (I've italicized the key text at the bottom):

What happens when a project is overfunded?
When a project is overfunded backers sometimes wonder: what happens with all that “extra” money? If a creator has a funding goal of $5,000 and raises $25,000, what do they do with the $20,000 they didn’t ask for?
What the creator does in that case varies greatly depending on the project.
Most of the time what seems like “extra” money isn’t extra at all. Ten times the funding often means ten times the backers. More rewards have to be produced and distributed, and creators need that funding to do it (and sometimes some of their own money too).
Sometimes when a project is overfunded it lets the creator put that money back into the project to create something better for the backers and themselves. More songs on an album, additional game elements, better materials, etc.
In other cases, overfunding leads to better margins and the creator may even profit from the project. This often also means that the creator can continue the project beyond Kickstarter and backers are part of that story.

In other words, Brown could justifiably claim any money he raises above his goal as a profit. If he did so, he could then give it to charity.  

Brown’s initial Kickstarter funding goal was $10. His most recent stretch goal was $3,000, to throw his giant potato salad party. Brown has also started promising gifts to larger donors such as T-shirts and a potato salad cookbook. But unless he manages to spend $36,000 or so on a party and some kitschy memorabilia, he should have some cash left over.

Now, there’s nothing inherently immoral about Brown spending all of his money to throw an awesome party for Internet geeks in Columbus. And Brown would also be within his rights to keep some of the cash as a reward for making a lot of people on the Internet laugh. I’m just saying that there might be better ways of "spreading joy," if that's his goal.

Jordan Weissmann is Slate's senior business and economics correspondent.


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