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Perspective: Coming full circle with crowd funding

This morning, I was fortunate to spend 15 minutes chatting on ABC Gippsland about social change and philanthropy, and we homed in on the subject of crowd-funding which has long been something I have felt nervous about. I am often warning people to be really careful with crowd-funding.  

 

Warn, I hear you ask. What could you possibly have to warn people about with one of the world’s most exciting fundraising approaches? If not, the world's most exciting citizen participation activities?

Well a few years back, Xfactor was engaged to look at the feasibility of crowd-funding within the higher education space around funding research. 

 In this research and consultations, we came across an alarming figure that some 60% of Kickstarter projects had indeed failed, and that Kickstarter ended up having to put a disclaimer on their website to help warn over-excited parties around the realities of undertaking crowd-funding.

That figure of 60% was almost burnt, etched into my brain for good. How could we warn more people that crowd-funding isn’t just another form of fundraising? Imagine the wastage of time and money spent to realise a 6 in 10 failure rate.

Things have certainly calmed down since then (for myself and the crowd-funding world), and more people realise that crowd-funding is not the silver bullet of fundraising that they hoped it would be. But along the way some organisations have had to have their fingers burnt (and possibly their brands) in the process. 

So when the offer to chat on ABC Gippsland came along – and we looked at an array of topics – the pros and cons of crowd-funding was the first cab off the rank.  

Today we were able to briefly revisit the $600,000 crowd-funding sensation here in Gippsland, which saw the Buchan Pub (population 200) rebuilt with donations flowing in from around the world. What many don’t realise is that the mastermind behind that project had crowd-funding, communications and marketing experience (like 20 years of it) and it had a very robust (perhaps bullet-proof) campaign strategy. A campaign title like 'Let's Build a Pub' is very clever, strategic and proof of the brains behind this brilliant campaign. 

Today, I was also able to point community groups and charities in the direction of one of my favourite groups Chuffed.org, who had just started when I first undertook the above research for higher education client. The CEO Prashan Paramanathan had been an early lighthouse around the traps for new players in the crowd-funding space. 

Since its emergence here in Australia, the Chuffed platform has helped 5000 organisations in 20 countries receive $15 million of funding, and the Prashan told me last week that he predicts this to double in the coming years. Chuffed has also changed its structure and is now a Social Benefit Company, so I’ll be looking forward to chatting more with Prashan about that transition and journey, and hopefully talking more about that on radio too! 

This morning, we also touched on Solar Projects as a growing area for crowd-funding, and while I didn’t get to mention the name ‘The People’s Solar’, I was able to touch on the largest campaign of its type in Australia last year which was Abbotsford Convent’s $60,000 crowd-funding victory, which went on to be matched by a $60,000 donor. It was a fabulous campaign, and also demonstrated the power of crowd-funding to bring new supporters to your cause. 

One area I didn’t get to mention today (maybe another time), was live crowd-funding and the extraordinary efforts by The Funding Network in Australia over the past few years. They were recognised at last week’s Philanthropy Australia Awards and rightly so, having helped facilitate $4.2 million to 130 grassroots organisations across 34 events. 

I would also have loved to mention Community Foundation for Central Victoria and its BIG GIVE 24 hour collective giving day last year which was a first in Australia. The one-day event raised $83,000 from 500 donors to support 70 organisations, schools and community groups. A hybrid version - crowd-funding meets collective giving, but an extension and more of what we will see across Australia. 

I may not come back to crowd-funding for a while in my talking or writing about philanthropy and social change. But it was nice to come full circle today. From being aghast at the 60% failure rate through to now, being comforted by all the tools and resources available to support organisations.

 The World Bank predicts crowd-funding globally to be $96 billion industry by 2020, with close to 2000 different platforms available.  

What an extraordinary time to be alive to witness citizen participation at this level. Congrats to everyone in Australia for making their mark in crowd-funding and making it equitable and affordable to create social change across a number of different parts of our community.

 And thanks Laura and Jonathon of ABC Gippsland for indulging me to talk about my favourite subject matter over breakfast!

The Xfactor Collective is a community of pre-vetted specialist consultants who help social change makers achieve their social mission. We have a diverse range of specialists across 300+ areas of specialisation, and this article was written by our Specialist Consultant Julia Keady. To find out more about working with Julia, or how the Collective can help you, please email us at This email address is being protected from spambots. You need JavaScript enabled to view it.

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