Giving crowdfunding a go

So far, I have never run a crowdfunding campaign. But I'm willing to give it a try. 


After all the Royal Academy turned to crowdfunding to raise the money to bring Al Wei Wei to London. And the Smithsonian is using crowd funding to save Neil Armstrong’s Apollo 11 spacesuit.
 
Some years ago I worked with an organization in Australia which supported artists and arts groups in their fundraising. One of its most successful programs was to promote crowdfunding, which proved especially useful for emerging artists seeking funds for new projects, or for touring.  Even for young artists seeking funding for study overseas.

Going back to the basics - always a great place to go - why wouldn't crowd funding be a great way to fundraise?

First of all you need a compelling case for support. What about bringing Chinese dissident art great, Al Wei Wei to London? Or saving Neil Armstrong’s spacesuit? Not bad, don't you think?

Then you have to establish your constituency. Whom are you going to approach? Who is most likely to give to this cause? In crowd funding, that decision is pretty well made for you. They will be people already close to you. Your friends and friends of friends. The people on your database, the people who have come to your events, your school or college, made a donation in the past, or signed up to your newsletter.

What are you offering them? You are offering them an opportunity to become further involved with what you do.

You will be benefiting from that fundraising 101 perennial, the Pareto principle. By offering a hierarchy of gift levels much of your targets will come from the small number of donors who have the greatest capacity and inclination. At the same time you will have been democratic and given as many people as are interested a chance to support you.

(The author of a Harvard study has concluded “Crowdfunding has enabled a democratization of access to funding.”)

Most importantly, you will be recognizing and involving your donors. They will get a piece of you, some part of your cause as a thanks and reward for their gift.

I'm not an expert in crowd funding but I'm willing to give it a try. Meantime, here is a blog on 5 Ways to Supercharge Your Next Crowdfunding Campaign, from the excellent 101Fundraising site.

If anyone is willing to give me a go, I'd be happy to help put together a crowd funding fundraising campaign. Send me a message.

One must travel, to learn (Mark Twain)

 "If the passenger visits better countries, he may learn to improve his own", wrote Samuel Johnson,  in 1755.

As I have spent the past two weeks in India a thing that has struck me as I read my morning news has been the number of stories about local nonprofits. 

It has led me to think afresh about the importance of nonprofits (NGOs) and social enterprise in the space between what government and the for profit sector can do. It is in this space where change can happen, a difference can be made and humanity can be found. What would the world be like without all the various organisations in that space where you live?

There are said to be around 200,000 nonprofits in India more than one for every 600 of its 1.2 billion people. In India, as in much of the developing world, the ability of governments and the for profit sector to deal with the huge demands of extreme poverty and a fast growing population has limits. Here are some examples of how Indian nonprofits are stepping up to the challenges. 

Keshav Srushti in a bid to spread awareness on solar cooking, will be recruiting students from 500 schools across Mumbai to cook solar-powered dishes. This solar cooker is a rudimentary piece of plastic foam that can reach a maximum temperature of 120ºC and can save up to 10,000 units of electricity on a daily basis and is functional for a year.

Salaam Balak  is trialing solar powered school bags for the poor. This idea came to its designer when she was talking to her domestic help, “She told me about the problems her children faced while studying at night. There are frequent power outages in her slum". The backpacks look like regular schoolbags but turn into a lamp when their front pockets are unzipped.

GOONJ  responded to the problem that 68% of rural women cannot afford sanitary napkins. When women cannot afford sanitary pads they resort to using cloth pieces or nothing. This causes infections and can lead to cervical cancer. GOONJ decided to act on this issue and started a movement of making sanitary pads out of waste cloth for rural women.

Sewa Trust  provides free meals to city slum and street dwellers admitted to hospitals who are unable to afford their own. Many of the beneficiaries are migrant workers drawn to the cities from rural India by the opportunity of work and separated from family support during their time of need. Says one beneficiary, “I regularly come to this organisation and am offered free food by the members. I live on a footpath and do not have enough money to buy food for myself". 

Sangama, an NGO for sexual minorities, sex workers and people living HIV has been asked by the Kerala Government  to conduct a socio-economic and situational survey of transgenders in the state through an NGO with a view of formulating welfare measures for them.

To celebrate Indian National Day on 15 August, the Times of India ran a feature that highlighted several more NGOs and social enterprises:

Basic school skills

The focus of in-school programs has always been on children achieving basic skills. The depressing fact is that of children enrolled in class 1, about 40% drop out before class 8 and a total of 70% drop out before class 10, makes basic literacy and numeracy an urgent social goal. Akshara’s effort began in Bangalore when remedial programs were implemented with volunteers, trained to identify children with learning deficits and give them specialized inputs. 

Microcredit and crowdfunding

Rang De combines microcredit and crowd funding to help people achieve freedom from poverty. It acts as a bridge between people who want to help the under privileged and those who need money to invest in small businesses. People living in cities can choose from a huge database of borrowers on rang these websites invest as little as Rs.100 into their business.

Out on the streets

Started in 2010 by an anonymous group of volunteers Ugly Indians are out on the streets fixing pavements, fearing a garbage, removing unauthorised posters, painting walls and planting saplings all over India. The regional initiative in Mumbai has been to document all the filthy and rundown parks and playgrounds and lobby the city council to remedy these.

Femininity and Fearlessness

The Fearless Collective are artists, activists, photographers and filmmakers who use art to speak out against gender violence. It was formed in response to the Nirbhaya rape and murder. The collective aims to redefine fear, femininity and what it means to be fearless.

Pay from your heart

Seva Cafe is a pop-up restaurant run entirely by volunteers. At the end of the meal  diners don't get a bill, just a little note which says "Pay from your heart!".  A hundred percent of the restaurant profits is used to support social service projects.

See also https://www.youtube.com/watch?v=b0V1XVzD7ik

Is crowdfunding the new new?

Crowdfunding is quickly becoming the new shiny object in the world of social change. 
(This blog is by Nell Edgington one of my favorite thinkers and writers on financing nonprofits and reproduced with her permission)


From Giving Days, to new giving platforms, to lots of articles and studies (here and here to start), it seems that crowdfunding is everywhere lately.

I’m all for innovations in the funding of social change, but I’m not convinced that crowdfunding is really creating anything fundamentally new.

Under “crowdfunding” I include efforts like Kickstarter [or Pozible in Australia] where a creative effort (a film, art exhibit, library) can garner small investments from a large number of people. And I’m also including Giving Days, at the city and national level, where nonprofits try to raise as much money as possible in a 24-hour online “event”. What these efforts all have in common is they raise money, from a large group of people, over a short period of time.

I earned my fundraising chops working public television pledge drives, one of the earliest “crowdfunding” efforts. The technology was different (TV screens and telephones, instead of CRM systems and social media), but I’m not sure much else is.

So I would like to see us separate what is potentially exciting about crowdfunding from what is just hype. To help in that effort, I offer some questions:

How much is truly new money?
It’s unclear to me how much new money crowdfunding brings to social change organizations. For example, nonprofits participating in Giving Days encourage their annual donors to give on that specific day so that Giving Day dollars are higher. But that’s not new money. True innovation in social change funding comes from efforts to grow the 2% pie  [giving as a share of America’s GDP has stayed at 2% for the last 40+ years]. I’m not convinced that crowdfunding uncovers money that would not have otherwise ended up somewhere in the nonprofit sector.

How many new donors are being retained? 
The point of crowdfunding is that it’s a one time deal. There is a message of urgency that encourages donors to give NOW. So the numbers on a specific Giving Day or with a crowdfunding campaign may be good, but is the funding sustainable? Are nonprofits or social change organizations actually growing their donor base? Are they able to go back to these investors later and encourage them to give again? And if the funding isn’t sustainable, is it really worth the effort it took to get it?

Is crowdfunding reinforcing the “Overhead Myth”?
The destructive idea that donors shouldn’t support nonprofit “overhead“, or administrative costs, is slowly dying, but crowdfunding might just be bringing it back to life. Nonprofit crowdfunding darling charity:water has been taken to task for reinforcing the idea that 100% of the dollars they raise go “directly to the field”. And crowdfunding projects are often specific and “sexy,” which means that the money is not being raised for boring things like the staffing, technology, and infrastructure that most organizations desperately need. Are we perpetuating the overhead myth by encouraging donors to give to specific projects, instead of to overall issues, organizations or teams?

What’s the return on investment?
A lot of time and effort can go into crowdfunding campaigns. If the benefits are shortlived, donors aren’t retained, and the majority of the funding is not new dollars, while the costs (staff and board time, technology investments) are high, then what is the true return on investment? I’m not arguing that it can’t be positive, but I would like to see more critical analysis about it, both at the aggregate and the individual organization levels.

I hate to be a Debbie Downer, but I’d like us to dig a bit deeper to understand what the real effects of crowdfunding are so far and what it’s true promise is. If there is already research out there that can answer some of these questions, please let me know in the comments below.

About the Author: Nell Edgington is President of Social Velocity (www.socialvelocity.net), a management consulting firm leading nonprofits to greater social impact and financial sustainability. Social Velocity helps nonprofits grow their programs, bring more money in the door, and use resources more effectively. For more information, check out Social Velocity consulting services and clients.