Crowdfunding has enabled social enterprises to take fundraising to a whole new level, says Start Some Good co-founder Tom Dawkins, resulting in greater engagement for both the donor and the social entrepreneur.
Crowdfunding continues to grow rapidly in popularity worldwide. The industry is expected to reach $34.4B USD this year after growing over 167% in 2014 according to 2015CF – Crowdfunding Industry Report produced by Massolution.
The rewards-based site Kickstarter, indisputably the biggest global brand in crowdfunding, has passed $1.4B USD in funds raised by over 70,000 projects. But it’s not just first world problems being solved and gadgets being funded by crowdfunding.
At StartSomeGood, the social benefit crowdfunding platform, we’ve worked with hundreds of social enterprises and non-profits who have discovered the benefits of crowdfunding over traditional forms of fundraising like direct mail or street canvassers.
So why is this? Well, crowdfunding creates a more personal relationship between the entrepreneur and the community of supporters they mobilise around their project by inviting those supporters to be part of achieving something that couldn’t be done without them.
That’s the feeling most supporters are looking for today. Philanthropy is shifting from being passive to participatory. Donors want to do more than just write a cheque, they want chances to express their values, recruit their friends and share their stories. They want to be involved.
For social entrepreneurs, crowdfunding has emerged as a better option for early-stage funding of new ideas. Rather than hoping for a government grant, a bank loan or a friendly investor, all of which are extremely scarce, a committed entrepreneur with an idea for a social enterprise can turn directly to their community and ask for the help they need to launch, grow or pivot.
Crowdfunding allows an entrepreneur to pitch a product without yet paying to manufacture it. Then, once they have confirmed that there is sufficient interest to go ahead, they can use the funds contributed to provide the rewards promised. This has encouraged a lot of innovation in both the creative and social sectors.
Social enterprises are fuelled by a social change vision, but they combine this with a product or service which they sell in the marketplace. The combination of these two elements creates the most engaging, sharable and successful crowdfunding campaigns.
We have seen this model in the more than 30 ventures supported through ING DIRECT’s Dreamstarter initiative, which StartSomeGood is a proud partner of. Some of the projects include a mobile shower bus for the homeless, an eco friendly stationary brand, free music at community markets, a social enterprise bakery and organic farm tours.
What these diverse projects all have in common is a community who backed them, who wanted to become part of their story and see their vision realised. They all built this community through authentic communication, passionate commitment and sheer hard work.
This is the opportunity crowdfunding provides, that if you care enough to make something happen, and you’re prepared to work hard to tell your story and build a community around you, then you can do incredible things.
So what dream do you want to start?
Tom Dawkins is the co-founder and CEO of StartSomeGood, a crowdfunding platform for world changing projects. Before that he founded a youth non-profit, worked in Washington DC and San Francisco, put on dance music festivals and opened the first coworking space in Australia. You can follow him on Twitter at @tomjd.
If you want to apply for the next round of Dreamstarter, sign up for updates at www.ingdirect.com.au/dreamstarter. The next round will open in September.