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How Crowdfunding Is Putting The Social Back Into Social Entrepreneurship

posted Jun 9, 2014, 11:57 PM by Siamak Ebarhimi

In the lead up to the 2013 Igniting Innovation Summit on Social Entrepreneurship, the Skoll World Forum is featuring the ideas and innovations of several speakers and delegates, all of whom are writing on entrepreneurial approaches and solutions to some of the world’s most pressing social issues. Organized by the Harvard College Social Innovation Collaborative, the Summit takes place on November 9th at Harvard University. View the full series here.Bre DiGiammarino is the Education and Social Innovation Director atIndiegogo.

The team at ieCrowd, which transforms innovations into high-growth ventures with global impact potential, wants to make you invisible to mosquitos.  They are following up on work initially developed by researchers at the University of California Riverside and supported by the Bill and Melinda Gates Foundation to do just that.  The patch, a little bigger than a postage stamp and shaped like a Kite, releases FDA approved chemicals that confuse mosquitoes and make them unable to sense humans.  Yet just months ago, very few people had ever heard of the concept of mosquito invisibility and even fewer had access to the patches needed to make that concept a reality.

Awareness and capital access gaps are familiar demons to social entrepreneurs — they form an infinite loop. A lack of awareness makes it hard to raise funds, and without funds, it’s hard to raise awareness.  Crowdfunding is changing this problem.  At Indiegogo, we address the awareness and access gaps by enabling anyone, anywhere to raise support for anything.  Social entrepreneurs are using crowdfunding in ways that make their work more efficient and effective than ever before.crowdfunding marketing

Learn rapidly

Jean MacDonald recently ran the
 App Camp for Girls campaign to launch her new nonprofit to teach girls to code.  She set out to raise $50,000 to start the camp in Portland, OR.  When she reached her goal in three days, she acknowledged the significant demand for her work in the market.  She quickly set out to learn more from this demand, asking contributors to suggest in their comments where she should establish her second chapter location.  She ultimately raised more than $100,000 from 1,043 people, ran a Beta version of her camp in Portland, and is gearing up to launch in multiple cities in the summer of 2014.Crowdfunding enables social entrepreneurs to rapidly test, learn and grow their business models in the early days of their development.  Historically, entrepreneurs would create pitch materials for traditional investors, which prompted them to think through their business model and frame it from the perspective of that single point of view – the investor.  Crowdfunding enables entrepreneurs to not only consider that important stakeholder, but also pushes them to consider their other stakeholders from the very start, including clients, beneficiaries, philanthropists and media.
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Support programs

Unrestricted grants may be the ideal form of contribution for social sector organizations, but the power of the “retail model” of philanthropy, in which donors can select to support specific units of social impact, is increasingly clear.  In this model, organizations clearly identify how much impact each unit of contribution supports.  Donors appreciate the added transparency.   Crowdfunding makes this model easier and more fun than ever before, often enabling contributors to directly connect with the beneficiaries of their impact.

Kimberley Bryant founded Black Girls Code to engage more women of color in the digital economy.  She launched the 2012 campaign to cover the costs of teaching computer programming to more than 300 boys and girls from underrepresented communities, in 90 days, in more than 7 cities across the United States.  She raised more than $20,000 from over 434 people.   This year, Kimberley and Black Girls Code took their work to the next level, running the 2013 campaign and raising over $100,000 from more than 1,000 contributors, and bringing programming to more than 2,000 girls in 10 cities and South Africa.   The most claimed contribution was $50 to cover the cost of bringing Black Girls Code programming to one girl that year.  The highest visible contribution was $5,000 to sponsor one of the workshops during the summer and provide 20 students with scholarships.crowdfunding advertising

In a time of tight resources, entrepreneurs and researchers often face a funding gap between their startup “seed” funds and “go to market” capital.  Crowdfunding is a great way to fill that gap by scaling what works to the next level.
Raise growth capital

Maria Springer had launched and run the LivelyHoods program in Kenya to support youth economic opportunities.  Her first location was highly successful, and she was ready to expand the program to a second location in Kenya.  She created the LivelyHoods campaign Indiegogo to raise the $25,000 needed to do that.  Maria used the theme of going “beyond bandaids” as her campaign theme, in much the same vein that her program is more than a bandaid solution for urban poverty.  At the start of her campaign, she put 25 bandaids on her face and peeled one off every time she raised another thousand dollars.  It took her 25 days to do it, but she successfully raised $27,074 from 251 people during her campaign.  Her second shop is now up and running.kickstarter marketing

Build a movement

Crowdfunding is valuable not only for supporting programming, but also can move forward a new approach or perspective in the world.  When done right, it can be a fantastic form of advocacy.

Simon Griffiths founded the company Who Gives a Crap to make the world aware of the global sanitation crisis we face today, where 2.4 billion people do not have access to toilets.  To this end, Simon created a toilet paper line that contributes 50% of profits to sanitation efforts in the developing world.   To get his first bulk order, he needed to raise at least $50,000, so he created aThe Who Gives a Crap campaign to share the challenges in global sanitation and the value his company would bring to the space.  He also live-streamed himself sitting on a toilet until he raised the funds he needed.  His creative approach to incenting urgency in his campaign, quite literally sitting on a toilet, not only helped him to ultimately raise $66,000 but also spread his important message of awareness to 9,000+ campaign viewers worldwide.

Engage philanthropists and investors

The value of crowdfunding is not limited to those looking for funds.  Philanthropists and investors are taking note as well.  Increasingly, venture capital firms look to a company’s crowdfunding efforts as proof of demand for their product or service, as well as proof of the team’s capacity to perform.  Accelerator networks are using partner pages, where campaigns coming out of their portfolio are grouped together, to showcase the innovation in their community and boost the credibility of campaigns by their social entrepreneurs.  They are also using crowdfunding to boost the sustainability of their investments.  The Community Capital Fund, for example, contributes the first few thousand dollars in every portfolio company’s crowdfunding campaign in order to help it mobilize the interest of the crowd in reaching its goals.kickstarter project

It is clear that crowdfunding is an ever more valuable tool in the social entrepreneur toolbox.   In an era of increased individualism, from personalized music to education to health, it is inspiring to see crowdfunding support an era of togetherness in social innovation.   At Indiegogo, we’ve been honored to work with social entrepreneurs like the folks at ieCrowd over the past year.  We couldn’t help but compile a 
brief video of their stories.  Are you next?In ieCrowd’s case, they knew the technology to deter mosquitoes worked, and they needed to test it in the country where it would make the most difference — Uganda, on a continent where somebody dies from malaria, a mosquito-borne disease, every minute of every day.  In order to raise the funds needed to take this next step, ieCrowd created the Kite campaign, in which contributors could claim Kite patches for themselves and send patches to people in Uganda.   ieCrowd set out to raise $75,000, and ultimately raised more than $500,000 from the crowd, enabling them to field test their work with 3,000 families in Uganda.

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