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Q&A with Phillip Fisher: Crowdfunding's impact

posted Oct 27, 2014, 12:16 AM by J Shaw   [ updated Oct 27, 2014, 12:16 AM ]
The RiseDetroit Challenge on crowdfunding websiteCrowdRise, which runs through Oct. 30, is giving local nonprofits a platform to raise money and compete for challenge grants.

Phillip Fisher, founder of impact investing fund Mission Throttle L3C, and an investor in CrowdRise, spoke with Crain's reporter Sherri Welch on the concept of crowdfunding, how the idea for the RiseDetroit Challenge developed and how it could benefit charities in the future. Answers have been edited for length and clarity.

What is crowdfunding and why is it important to philanthropy?

Crowdfunding is a one-stop place for people to bring support and help organizations. There are different crowdfunding sites, including CrowdRise and Benevolent. As you've witnessed recently with the Ice Bucket Challenge, both donors and impact organizations are eager to participate in fun ways to raise funds. What we're hoping is that the RiseDetroit Challenge will be fun for not just agencies but, more importantly, for donors. Every one of us has a natural instinct to help others. This allows a fun way of doing that where it's convenient and can challenge others to get involved. 

What spurs donors to give on CrowdRise or any crowdfunding platform?

I think we're going through an evolution of being very comfortable with Web-based platforms. This evolution provides us the ability to save time, create efficiencies and have better impact in our giving strategies. Donors can connect with agencies they haven't before. They can understand better what services agencies are providing. Agencies can put online a video of what they do. 

There's a transactional cost that goes to CrowdRise, but it's still creating efficiencies?

When you think about impact organizations and fund development. There's a cost that's part of capturing a donation, tied to hiring people. This is a very efficient way of capturing donations. 

How did the RiseDetroit Challenge come together?

Robert Wolfe runs CrowdRise along with actor Ed Norton. I'm an investor. We were talking about corporate challenges where corporations put up a prize and select a beneficiary agency and either give a prize or match. I suggested maybe we should do a geographical challenge where agencies within a certain geography could challenge each other for a prize. I'd throw in some prize money and maybe encourage others. And my mother, Marjorie Fisher, threw in some money, too, because she's so passionate about Detroit. We came up with $100,000 for agencies in Southeast Michigan. This was about a year and a half ago. We were waiting for the right time to do it. When Detroit Homecoming came up, (Crain's Publisher) Mary Kramer just latched onto it and decided to help promote it during the time when all these people were in town. This was a wonderful platform to be able to send people to if they wanted to contribute to social change in Southeast Michigan.

Is this sort of geographical challenge a new approach for CrowdRise?

It's not just a new approach for CrowdRise, but it stimulates people in different geographies to think about how they can support their regions by putting together a challenge to support 501(c)(3)s in those geographies. I think it's going pretty well. There's opportunity to scale it to other regions. 

What can a nonprofit take from this?

Raising money is the direct objective, but indirectly I think it helps create a philanthropic culture within their agencies where they can reach out to their stakeholders and cultivate stronger relationships. It's outreach to both existing and new donors and cultivating the ability to trigger a donation that could be persistent over time.

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