Posted On: 2020-11-03 10:10:06
What is crowdfunding?
Crowdfunding is a means of raising money with the help of a large number of people, usually, these people are public or individuals, who can donate, invest in projects, causes or help towards something or someone in need.
Traditionally, supporting a business, project or enterprise involved inviting a few people for large sums of money. Crowdfunding switches this idea around, using the platform to talk and present their idea to thousands – if not millions – of potential funders and donors. Some best fundraising platforms integrate social media with the cause to gain more crowds that can raise more money for the particular cause. Social media, alongside traditional networks of friends, family and work acquaintances, will work as a perk to raise money.
It is the best way to raise money online for any medical emergencies, social cause or charity. India being the second largest population of 135.26 crores, has a terrifying number of more 800 million people who are considered as poor. These people face difficulties not only with their bills but also in their day to day life activities. Underprivileged kids are being dropped out of school because of no financial support for fees, books and all the necessary items. Poor people completely depend on their daily income to make their homes run without any food shortage, electricity and basic necessities. In such cases, if even one of the family members needs money for medical expenses, it becomes impossible for the family to collect the amount to save the person affected. Here, Crowdfunding can help the family to raise money and save the affected person.
Crowdfunding platforms also help by giving the entrepreneur a single platform to create, develop, present and share your pitch to resources, this method dramatically streamlines the traditional model.
With crowdfunding, it’s much easier for any individual or organization to get the opportunity and to support the needy, in front of numerous interested crowds and give them more ways to help grow your business, support lives or help someone with their dream.
Crowdfunding for the non-profits helps to raise money for the NGOs who are dedicated to working for the benefits of the others who are in need and have no means to survive.
How does crowdfunding work?
Visit a crowdfunding website, there should be an overview available of the projects being pitched. Registration with the website would be the step one in order to see the pitches or to start a fundraiser or to invest in a project.
Some crowdfunding websites charge a certain minimum fee but mostly the registrations are done for free.
If you find a project that is of interest, then look for more details for the same. The business, individual or social enterprise that’s looking to raise money should mention the following:
- How much money the campaign wants to raise.
- How much money has been raised so far.
- The share in the business offered (if relevant)
- What will the money be used for?
- How long the pitch is open for (the timeline for that pitch ).
- What you will receive in return for investing (such as shares in the company), if applicable.
- In case of a campaign related to a social cause, it might be a case of helping an individual or an organisation in need without any returns on the amount donated.
For raising a campaign:
- Collect all the needful information needed (Such as certificates, related document work )
- Create a convincing pitch and at the end cause mention the same.
- Once the campaign is published share with groups and communities and collect more funds.
- Understand the withdrawal procedure and keep updating the investors on the project in case it is a business enterprise and in case of a social cause, the donors may be updated on the impact of the donation utilisation.
What are the risks associated with crowdfunding?
Crowdfunding is still a new concept and investing in young businesses and ideas can be very risky. The concept of the web into the funding process makes it riskier. Here are some few risks associated with it:
- The business you invest in might go to failure.
- Launching the crowdfunding campaign too early.
- The returns are never guaranteed.
- Underestimating the work and time required to manage a fundraising campaign.
- It may be hard to sell the shares.
- Not understanding the terms and conditions before launching a campaign
- The crowdfunding platform itself may go bust.
The above is only applicable in the case of business enterprise but not applicable for social causes.
How to have successful crowdfunding?
- Have at least a small network of interested and excited friends and family willing to help get the party started by giving and urging others to give.
- Use social media presence in highlighting the cause and collecting more funds.
- If you're giving out something in return for money, make sure the returns are great.
- Present a serious business plan with proper diagrams and an explanation of why the money will take your business to the next level and in case of a social cause, explain how the money would be utilised to help the beneficiaries.
- If you are helping someone through the campaign, provide detailed certificates, pictures that will make the story more convincing and authentic.
- Include a video story and keep it short and compact, with a call to action.
- Be prepared to essentially live online, staying active on media sites, a pitch that campaigns in such a way where the crowd is interested in the cause.
Benefits of Online crowdfunding
- By initiating an online crowdfunding campaign, you present your idea in the best way which will benefit your cause. Without the fear of standing on stage and presenting your idea and spoiling your presentation of the best idea, you can present it online without the fear.
- Social Media can be used for marketing and building a reach in the community gaining more funders towards the cause.
- There are no obstacles or tests or barriers that will stop your idea from reaching out to the public or creating a difference. You yourself can validate the idea and present the best.
- One of the best things about online crowdfunding is its ability to organise and streamline your fundraising efforts.
- It is a fast way to raise money with no upfront fees.
- Sharing your idea, plans or cause, can often get feedback and expert guidance on how to improve it.
- It is a great way to examine the public's reaction to your product/ idea / cause.
- If people are interested to invest or donate, it is a good sign that your idea could work well in the market or is a good cause to follow.
- Investors/ Donors can track your progress - this may help you to promote your brand/ cause through their networks.
- It's an alternative finance option if you have struggled to get bank loans or traditional funding
- It helps in saving the lives of the underprivileged who are unable to fund themselves in the moment of crisis.
Filaantro’s Journey, so far.
Filaantro is a crowdfunding website that ensures people’s exceptional ideas and donations requirement for a genuine and noble cause to be fulfilled and can lead to the betterment of humankind. It is an initiative to make this world one community, where everyone can grow along with one and all by helping each other. Filaantro has completed more than 100 partnerships and won the trust of the individuals and social enterprises within a very short span of time.
Filaantro believes and accepts one's ideas, reasons, goals and helps in achieving the same. Anybody looking for crowdfunding can easily create an online campaign on Filaantro which takes only a few minutes.
Filaantro is working on many causes and is trying to create a positive change in the world. Some of the topics for causes includes:
- Education
- Medical
- Technology
- Women
- Human rights
- Social entrepreneurship
- Rural Development
- Arts & media
Many more topics will be included in the future. Crowdfunding presents and gives an extra edge for the people to the people by the people.
Together we create, together we grow.
Author : Lubdha Dhanopia
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