The Olympics Brings in Billions, But Not For Athletes. Here's One Fix
When the Olympic swimmer Anthony Ervin won gold earlier this week—as part of the U.S. men’s freestyle 4-by-100 relay team that helped Michael Phelps win his 20th career gold medal—he tied the record for the longest span between medals (his last win was in 2000). But he might not have made it at all without the hundreds of fans who helped finance his journey back.
This year, more Olympic athletes have used crowdfunding to reach the Games than ever before. Sites such as Dreamfuel—a fundraising site for elite athletes that Ervin inspired—help solve a familiar dilemma: The Olympics brings in billions of dollars in ticketing, sponsorships, and broadcast revenue, yet individual athletes see very little of it. While no comprehensive studies exist, surveys of track-and-field athletes suggest that top-10 contenders make less than $16,000 per year. A recent Washington Post investigation reported that “most U.S. Olympic athletes cannot earn enough from their sports to make a living."
"We realized there's this huge fundraising problem in sports at the youth level, and then a very sorely needed revenue stream for pretty much every elite athlete except for the 1-percenters," says Dreamfuel founder Emily White. "So they have flocked to us, without much recruitment."
For White, Dreamfuel was a melding of her two passions: water sports and rock and roll. The daughter and granddaughter of swim coaches, she was a state champion in high school and attended Northeastern University on a swimming scholarship. But then she found herself on a different path—tour-managing a local punk-cabaret act called the Dresden Dolls. A decade later, having founded her own company managing rock stars, she happened across a swimmer who, it seemed, was already a rock star.
More than a decade earlier, in 2000, Anthony Ervin had won Olympic gold at the age of 19. Then he left the sport for a decade—to play in bands and wander the world and take recreational drugs—only to reemerge, in 2012, when he once again made the Olympic team. He wasn’t just good; he was cool. Cool enough to land a Rolling Stone profile. His social-media numbers were through the roof.
White found Ervin on Twitter and noticed he was a big music fan. Being in the music business, the bands—or their managers, or their social media folks—were people she knew. Soon, the Smashing Pumpkins and Alabama Shakes were tweeting “Good luck” at him. After his London games, White cold-e-mailed him, hoping to become his manager, and they met up in New York.
She was shocked to discover that he was broke—despite his popularity, he was, as she puts it, “left to his own devices.” He was preparing to compete in the World Cup circuit, one of the pathways to the Olympics. It was too late to find a sponsor, so his plan was to put the expenses on his credit card, then hope he won some prize money to pay off the debt.
White remembered how her former client, Dresden Dolls singer Amanda Palmer, had raised more than $1 million on the crowdfunding site Kickstarter to fund a solo album and a tour. So she suggested Ervin try it out.
Ervin’s answer: “What’s Kickstarter?”
White realized that most athletes—even smart, pop-culture-savvy athletes like Ervin—had never heard of crowdfunding. And the established crowdfunding sites didn’t quite know what to do with athletes, either. When White and Ervin approached Kickstarter’s founders with a campaign to get Ervin to the World Cup, they were turned down.
So they set out to do it themselves. In the end, they raised more money than they asked for, and Ervin came back from the World Cup circuit with 16 medals, nine of them gold, and an American record.
Out of that effort grew Dreamfuel. Although the money raised via the site has thus far been modest—$80,000 in total donations—they’ve already seen outsize results, with campaigns by past Olympic medalists Roland Schoeman (South Africa), Margaux Farrell (France), and Americans Kim Vandenberg and Chelsea Hayes. In Rio this week, Dreamfuel athletes include South Africa’s Chad Ho, Puerto Rico’s Erik Risolvato, Sierra Leone’s Hafsatu Kamara, Syria’s Azad Al-Barazi, and American Kelsey Campbell.
“We did very little user outreach, which is kind of crazy in tech world,” White says. “There was such a need in sports fundraising, both at the youth and elite level, that athletes have been coming to us.”
Dreamfuel is competing in an arena that's booming at the moment. While Kickstarter isn't in the sports game, crowdfunding platform GoFundMe says sports now account for "hundreds of millions" in donations—from Little League teams raising money for new jerseys to elite athletes looking to offset the costs of competing.
Like White, GoFundMe's chief executive officer, Rob Solomon, was also an elite athlete—at UC Berkeley, he was an All-American water polo star and a two-time NCAA National Champion, and some of his teammates ended up in the Olympics. “Yes, the Usain Bolts and the Michael Phelpses and Katie Ledeckys and the amazing gymnasts will get endorsements, and have lucrative deals, and their costs will be covered by their respective federations,” Solomon says. “The average Olympic athlete doesn't get that. The very elite—and you can probably name only 10 or 20 of them from our country—have a pretty easy path. But the majority of them don't.”
In 2016, GoFundMe has been used to raise nearly $800,000 by more than 100 athletes with a shot at the Olympics, including American decathlete Jeremy Taiwo, a second-generation Olympian who won GoFundMe’s $10,000 prize for raising the most money during a several-week sprint. Solomon says the company has also seen an uptick in family members of Olympians raising money for travel expenses to Rio—including the families of U.S. silver medalist Chase Kalisz, and swimmer Caeleb Dressel, who’s part of the same U.S. relay team that won gold with Phelps and Ervin. The father of an Olympic shot put athlete was retired and driving Uber to make ends meet when a passenger offered to help him set up a GoFundMe campaign; the story went viral, and the father raised more than $8,000.
White is pursuing similar territory. A Dreamfuel program aimed at helping the families of Olympic athletes led to the company’s best month to date—July revenue alone doubled their combined year-to-date total. She says her company’s focus on sports is already paying off: “We've had quite a few athletes leave generic, white-label platforms as soon as they find out about Dreamfuel, because they don't necessarily want to be on a platform with kids raising [money] for college debt.”
She’s also worked with Dreamfuel’s athletes and families on compliance issues. All Rio athletes are constrained by “Rule 40,” an extraordinarily complex and controversial set of restrictions that prohibit brands and athletes from using many Olympic-specific terms and images, even on social media. And Olympians who are also college athletes—such as American swimmer Cierra Runge, who’s using Dreamfuel to get her mom to Rio—must abide by NCAA regulations, which prohibit athletes from profiting on their images or autographs. “[Runge’s mother] came up with a lot of really cool rewards, and we had to nix a bunch of them—because we need to be within NCAA rules. Instead, her mom offered an energy-ball recipe. We're encouraging the families to send postcards from Rio and Instagram shots dedicated to the supporters and things like that.”
“As much as it’s kind of a bummer, and a shock to the families, there's quite a few athletes and families in violation on GoFundMe, because they don't know the rules,” White says. “So by working with Dreamfuel, we know the rules.”
Solomon says he hasn’t heard of any GoFundMe campaigns being targeted by the Olympics, and that “the onus is on the athlete to make sure they're not running afoul of Rule 40 or anything like that.” Still, it’s worth noting that GoFundMe’s landing page for its Olympics athletes used to contain the word “Olympics;” it now refers, more generically, to “Competing in Rio.”
As Ervin prepares to go for gold during his individual events on Thursday and Friday, the company is already planning a rollout aimed at expanding the platform in the fall.
“People think we're an Olympics-focused site, and we're not,” she says. “We want to revolutionize youth sports, we want to eliminate the clipboard. The fact that I can provide a new revenue stream for elite athletes is awesome, but they're coming to us because they need it.”