Patreon

Explaining the new Patreon service fee

Beginning December 18, Patreon will charge patrons, the people giving money to the creators they support, a flat 35 cents plus 2.9% of the pledge. This means that if you decide to give $1.00 a month to YouTube creator Nerkish, Patreon will charge you $1.38 a month. Nerkish after Patreon’s five percent handling fee to the creator will rake in 95 cents.

Why is Patreon doing this? because that is what Patreon’s credit card processor is charging them to process credit cards: a flat 35 cents per transaction and 2.9% of the pledge. This is a standard fee structure charged by credit card processors to merchants. In this particular case, Patreon is the merchant.

Is Patreon allowed to do this? Yes, in fact, according to recently enacted credit card processing laws, they are expressly allowed to pass on the processing cost to the cardholder. Even if they wanted to pass this on to the creator, technically under the law, they wouldn’t be allowed to. This can only be passed on to the cardholder.

I should note the flat 35 cents per transaction is charged whether the transaction is approved or declined. It’s an authorization fee. It’s what the processor charges the merchant for each card that is run. Technically, it’s what MasterCard and Visa charges for each card run and this cost is passed over to the processor. If the card is approved, the Patreon passes this over along with the other 2.9% fee. If the card is declined, they eat the cost.

This new change should decrease the number of $1 pledges people have made. Knowing that a $1 pledge costs a $1.38 a month might make people think twice before pledging money to their favorite YouTube creators.

Brianna Wu accused of fraud by Patreon supporter

Self proclaimed “Godzilla of Feminists” Brianna Wu is being accused of fraud by an anonymous Patreon supporter. The basis of the accusation is connected to the stated purpose of the Patreon goal. Here is what Wu posted on Patreon:

Here’s where you come in: If you appreciate what I do, please chip in so I can hire some help with the Women in Tech advocacy I do. I need someone to help me with the medial parts of dealing with my attackers so I can focus on my work, making and shipping games. I imagine we’ll also have them work on women in tech advocacy.

Wu’s Patreon supporters collectively give $2,184.70 each month. This helps with paying for the full-time employment of a person named Natalie O’Brien.

This is what the anonymous Patreon supporter wrote on Medium:

In various publications, Brianna has mentioned a woman named Natalie O’Brien. She has claimed that Natalie O’Brien is a pregnant woman who she hired as an administrator. I now believe that Natalie O’Brien may not exist and that Brianna Wu has simply pocketed the money for herself.

In my humble opinion, complaining about possible fraud on Patreon is a lot like swimming in the Atlantic Ocean and then complaining about getting wet. Fraud is always a real possibility with Patreon because there are no mechanisms in place to make sure money is actually going to the stated purpose.

Fraud becomes even more of a possibility because it’s connected to Brianna Wu. This is not be the first time Wu has been accused of not telling the truth.

My advice to anyone wanting to give to a cause and they want to make sure the money is going to that cause, stay clear of Patreon. Look instead for organizations who’ve been vetted by the IRS as bona fide non-profits. These organizations must file reports with the IRS every year that show how much money they take in and how they use the money. These reports are made available to the public.

By all means give money to people on Patreon if it makes you feel good. Just don’t expect any kind of verification or proof. That’s not what Patreon does.

What is Patreon?

Patreon is a crowdfunding platform that allows “artists” to receive a fixed amount of money on a regular, monthly basis, directly from the people, the patrons, who consume their work. There’s also an alternate method that collects money every time the artist creates a new piece of work, for instance, a new podcast episode or a new YouTube video.

Patrons who give to people on Patreon show up on the recipient’s Patreon page with a link to the other people they’ve given to.

Patreon was created by Jack Conte and Sam Yam. Conte is a musician who wanted an alternate method of generating revenue from his YouTube videos. The normal method of revenue from YouTube is Google Adsense.

Patreon sounds great!

In theory, Patron is a good idea. I listen to a lot of free podcasts. Though I wouldn’t mind the idea of contributing a few bucks a month through Patreon to each podcast I listen to, none of the podcasts I listen to take part in Patreon. They generate revenue in more traditional ways. By that, I mean advertisements.

If there’s a problem with Patreon, it’s that it allows people to receive money from strangers without really doing anything for it in return. Some e-celebrities use Patreon as their primary source of income.

What’s wrong with free money?

The problem with people getting handouts, is that sometimes they grow too accustomed to it.

The way things normally work in our society, is that if you want to be a professional artist, yet you’re creating art that people don’t want to pay for, you need to learn to create art that people are willing to pay for. With Patreon, that natural dynamic no longer exists. Artists don’t have to evolve or adapt to the marketplace, as long as people are willing to just give them free money. They can just plow along creating art that holds no value in the marketplace.

Personally, I’d rather snort liquid drain cleaner than set up a Patreon page and ask strangers for monthly donations, but to each his own. When I look at what I have to go through to earn a paycheck, I’m clearly in no place to judge how someone else makes a living.