Upload
nesta
View
667
Download
0
Embed Size (px)
Citation preview
CROWDFUNDING GOOD CAUSES Opportunities and challenges for charities,
community groups and social entrepreneurs
Crowdfunding Good CausesJune 6th, Nesta #Crowd4Good
Jonathan [email protected]@JonoBone
Peter [email protected]@PeterBaeck
Download the report: www.nesta.org.uk/crowdfunding-good-causes
CROWDFUNDING GOOD CAUSES Opportunities and challenges for charities,
community groups and social entrepreneurs
BACKGROUND• Little research
looking at crowdfunding good causes to date
• Market studies show growing but small market
• Evidence of opportunities for non financial and financial benefits
AIMS OF THE REPORTCharacteristics of crowdfunding for good causes, opportunities and challenges
What is keeping community and voluntary organisations from using crowdfunding
How can we make the most out of crowdfunding for good causes
What we did
• Review of existing literature (not much)
• Interviews with some of the leading platforms focusing on good causes
• Survey of 450+ CVS organisations
WHAT IS ITCrowdfunding is a way of financing projects, businesses and loans through small contributions from a large number of sources, rather than large amounts from a few. Contributions are made directly or through a light–touch platform rather than through banks, charities or stock exchanges
DIFFERENT MODELS
Donation-based: People donate money towards a project. Except for seeing the feeling of seeing the project go ahead, receive no financial return or product. Average campaign size - £714.
Equity based: Enables the crowd to invest for equity, or profit/revenue sharing in businesses or projects, with the hope of a financial return if the business exits. Average campaign size - £523,978
Community Shares: Similar to standard equity except they can only be sold by cooperatives and community benefit societies and although investors may sometimes earn interest , they cannot go up in value. Average campaign size - £309,342
Lending based: People seeking a loan apply through the platform, with members of the crowd taking small chunks of the overall loan. Profit is made when loan is repaid with interest. Average campaign size - £76,280
Reward-based: People contribute to projects and receive a non–financial reward or product in return. Average campaign size - £6,326.
£%
DIFFERENT MODELS
Donation-based: People donate money towards a project. Except for seeing the feeling of seeing the project go ahead, receive no financial return or product. Average campaign size - £714.
Community Shares: Similar to standard equity except they can only be sold by cooperatives and community benefit societies and although investors may sometimes earn interest , they cannot go up in value. Average campaign size - £309,342
Reward-based: People contribute to projects and receive a non–financial reward or product in return. Average campaign size - £6,326.
EVENTS AND ACTIVITES
NewVIc Ability Counts Football Squad - £630 to get to the nationals
CAMPAIGNS AND MOVEMENTS
Keep streets live raised £3,285 from133 backers to go towards paying legal andcampaigning costs
GARDENS PLAYGROUNDS AND GREENSPACES
Global Garden, Global Kitchen raised £10,894, from 110 Backers to set up a community garden and kitchen
BUILDINGS, RESTORATIONS AND
INFRASTRUCTUREPortPatrick community Benefit
Society - £103,000 from 363 backers to save harbour
EQUIPMENT AND TOOLS
Help a Heart campaign raised £1,808 and £1,107
in 2 campaigns to buy defibrillators for a local
community.
OPPORTUNITIES
Mobilising volunteers and other non financial contributions
Helping fund projects that would otherwise not get funded
Transparency on who and what gets funded
Increased experimentation
Marketing and awareness raising
64% of donation
fundraisers unlikely to
have received finance
elsewhere
90% of those donating
subsequently promoted it to
their social network
25% offered to volunteer with
the project they supported
Around 75% stated the money they donated would otherwise be given to charity
CHALLLENGES
Crowdfunding is hard and there are limits on the size of what can be funded
Negative impact on diversity, equality and participation
Balancing one off support through crowdfunding against need for long term finance
Replacing government funding
Potential conflict between the crowd’s and the organisation’s priorities
Risks favouring those who are digitally savvy with money to fund projects
Community Shares requires
a change of legal status
Average donation and
rewards campaign =<
£10K Equivalent to small grants
Often requires months of work for relatively small amounts of money
What are the main barriers keeping charities, community groups and social entrepreneurs from using crowdfunding?
How can these be addressed?
Survey of 452 charities, community groups and social entrepreneurs to understand their perception awareness and usage of crowdfunding ?
High awareness but little use of crowdfunding 74%
aware of but hadn’t used it
11% Have never heard off it
15% had used it
Why aren’t organisations using crowdfunding?
The biggest barriers to using crowdfunding are skills, knowledge and capacity
Why aren’t organisations using crowdfunding?
What factors would make organisations use crowdfunding?
Organisations would use crowdfunding if they could fund core costs
Factors that would make organisations use crowdfunding
Perceived Suitability of the different crowdfunding models to fundraising needs
Community shares was least well known model but seen as 3rd most suitable
Equal awareness of donation and rewards, but rewards is seen as less suitable
Perceived Suitability of the different crowdfunding models to fundraising needs
Community shares was least well known model but seen as 3rd most suitable
Equal awareness of donation and rewards, but rewards is seen as less suitable
Perceived Suitability of the different crowdfunding models to fundraising needs
Community shares was least well known model but seen as 3rd most suitable
Equal awareness of donation and rewards, but rewards is seen as less suitable
How does crowdfunding compare to other forms of funding
How does crowdfunding compare to other forms of funding
How does crowdfunding compare to other forms of funding
Recommendations
• Try and set up at least one crowdfunding campaign • Join up fundraising and campaign teams to run their
crowdfunding campaigns
• Curate a group of projects on a pre-existing platform or develop a customised crowdfunding platform
For charities, community groups and social entrepreneurs…
RecommendationsFunders, investors and other supporters of community and voluntary sector organisations should…
• Invest in building crowdfunding knowledge, skills and capacity building. • Integrate crowdfunding into existing funding schemes through match
funding• Support transition from crowdfunding projects to developing sustainable
organisations• Set up referral schemes from grant funders and social investors• Test and measure effect of crowdfunding
CROWDFUNDING GOOD CAUSES Opportunities and challenges for charities,
community groups and social entrepreneurs
Panel Discussion
Karl Wilding, Director of Public Policy and Volunteering, NCVOJulia Groves, Partner and Head of Crowdfunding, Downing LLP and Director, UK Crowdfunding AssociationBen Warren, Investment Associate, Big Society Capital
Chair: Peter Baeck, Head of Collaborative Economy Research, Nesta
#Crowd4Good
Download the report: www.nesta.org.uk/crowdfunding-good-causes