Not even one month ago, the idea that people could crowdfund enough money to stop Toys ‘R’ Us from closing its doors for good seemed cute but unrealistic. Since that time, roughly 2,000 people have raised over $200 million on the way to a billion-dollar GoFundMe goal. The campaign to keep Toys ‘R’ Us alive — albeit under new management, was started on March 21 by toy industry executive Isaac Larian and has been a wild, $95-million-a-day success. Still, it’s not clear that its aim much more realistic than it was at the outset. Not only does the goal still seem out of reach, a billion dollars may not get it done or solve intrinsic problems with the business.
When Larian announced the effort to try and save Toys ‘R’ Us with a crowdfunding campaign, his goal was to raise $200 million between himself and a handful of other entrepreneurs, then have all the non-gazillionaires ride that wave, contributing four times the initial investment. To his credit, he rounded up a lot of enthusiastic investors and exceeded his goal. That’s remarkable and deserves a round of applause (clap, clap, clap), but it doesn’t solve the fundamental problem at the core of crowdfunding: getting the crowd into it.
Beyond the donation from Larian and his associates, the highest donation to date has been a far more modest $1,000. There is not a clear sense that the public wants Toys ‘R’ Us badly enough to toss in that kind of dough.
Should the campaign reach its goal of $1 billion, it would become the largest crowdfunding campaign ever. Unfortunately though, not even $1 billion will save every Toys ‘R’ Us location. More than 700 locations will be liquidated in the company’s bankruptcy and, even with the $1 billion, Larian would only be able to buy back around 400 of them. A billion dollars doesn’t buy what it used to.
It’s hard to say how much money regular people will ultimately put into this campaign. In the age of Amazon Prime, folks would be donating for the sake of nostalgia and for the sake of physical retail — the lack of desire for which drove the company out of business. Unlike contributing to a lot of other GoFundMe pages that are spearheaded by charities or non-profit ventures, people who donate to save Toys ‘R’ Us are essentially providing a business with donations that can’t be written off come tax time.
The campaign’s success would profit Larian and his compatriots a great deal while leaving the people who raised an overwhelming majority of the money holding on to a warm fuzzy feeling inside. Still, it’s impressive haul so far.