THE IMPACT LEAK – Crowdfunding and Social Enterprise – your community gets you
- What impacts the good we do?
There’s a lot of talk about crowdfunding and many of us have tried it – for products, for events, for movies, art and even bicycle helmets but how many have used it for their social enterprise? While crowdfunding has been around for more than a decade, using it as a financing tool is not common for social enterprises. Charity Village published an article showing in a recent survey conducted by Trellis, that donor interest in crowdfunding was high. Social enterprises should heed this interest.
The crowdfunding platform 'StartSomeGood' has been in operation since 2011. They assert that they are ‘the leading home of cause-driven crowdfunding, innovative partnerships and social entrepreneur education.’ And to adequately support social entrepreneurs before they plunge into crowdfunding, they provide an academy of learning from Social Enterprise creation to Crowdfunding 101. Their success rate is 4x higher than Kickstarter and Indiegogo when it comes to cause-driven work and interestingly, you can’t start on the platform until after your project has been reviewed and additional services, if needed, are offered. In short, experts who have seen 1000’s of social enterprises check you out, give you tips and advice, offer more services AND THEN, let you pass into the crowdfunding world. It’s a great support for preparing for crowdfunding because it’s not always a rosy world and there are more mistakes made and hopes dashed than people realize. Like all good news stories, we only hear about the successes but this is true of grant writing, succeeding with loans and bonds and of course, landing an investor.
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Social enterprises with big communities fare best on crowdfunding platforms. Whether it’s loyal customers, a geographic location or a celebrated cause, the size of your supporter group and their commitment is the strongest indicator of success. While platforms like Kiva ignited the world with small microloan crowdfunding, social entrepreneurs existing in larger economies don’t always attract the same level of interest. When crowdfunding was new, many people flocked to Kickstarter and Indiegogo to try it out but both platforms show little success for social enterprises. Social entrepreneurs need access to a community to bring them success.
Prior to Kickstarter entering Canada, we had our own social good crowdfunding platform, smallchangefund.ca. Created by Mary McGrath and Ruth Richardson in 2008, the platform was focused on the environment and remains a leader in Canada for its grassroots work supporting local initiatives. Cleantech has become the leader in environmental change but it often uses grants and traditional investment to scale its benefits. Small orgs may still need a crowdfunding environment to boost their chances of success.
Photo by __ drz __ via Unsplash
A recent successful raise was accomplished by Geenees on the platform FrontFundr. Geenees combines tech with charitable giving. They built a platform that could help facilitate gifts and donations to support nonprofits and individual donors. As a social enterprise, they built the company for 3 years modifying and improving their goals and systems and realized that supporting the nonprofit sector was their best fit. As a tech4good social enterprise, direct investment could lead them further in their development and so they chose FrontFundr as their crowdfunding platform. Their success was phenomenal. From an ask of $250,000, they raised $615,000 for their social enterprise. On this platform, a good business plan and a way to repay investment is tantamount to success, but they also needed their supporters, and the results show just how much support people were willing to give.
Social entrepreneurs must seek funding where they can and crowdfunding is an area often overlooked. With many more successes to be realized, preparation is key while support from your community will make all the difference. Consider what you do and how you do it and then look for financial support in the best ways possible. Know that the ’crowd’ may be one of them.