I hope you enjoyed my recent interview with Mark Mohler, CEO of Sprigster. After reading the interview several times, I felt I needed to ask a few follow-up questions. Since Sprigster is the very first crowdfunding platform specifically created for military veterans who wish to become franchise busiess owners, I wanted to get a better understanding of how the model works. Hopefully, this follow-up interview will answer a few lingering questions on everyone’s mind. Thank you to Mark Mohler for being so accommodating.

Franchise Chatter (FC): What happens to the contributions of individual donors if the minimum funding requirements of the Veteran are not met?

Mark Mohler (MM): Boost a Hero is designed to get veterans started in franchise businesses, as well as to give them the best chance of success. Therefore, if the veteran is going to be able to start the business even if the goal is not reached but will be greatly benefitted by reaching the goal, we will distribute the amount raised even if the goal is not reached because this will help with the business. We call this an Adaptable Project because the franchise business can adapt and start even if the goal is not reached. If the business is not going to be started, there is no reason to distribute any funds. In this case, if funds have been contributed, Boosters may wish to apply their contribution to another veteran’s project, to distribute to the veteran even though the business is not likely to move forward or to have their contribution returned.

FC: Are these donations tax deductible?

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MM: No. Because the crowdfunding proceeds go directly to the veteran as opposed to a tax exempt charity, there is no resulting tax deduction. However, crowdfunding has become so popular because it does many things that charities seldom do. It is mission oriented because your are backing a very specific project (helping fund a veteran in their new business). It is accountable in ways that charities are not because you can follow the specific results of your support by following that business and its success. Finally, the results and impacts are immediate. In many ways, crowdfunding came into existence because people are looking for easy ways to collaborate behind a cause that is tangible and immediate, and charities seldom deliver these results.