Fishing for Funds
by No’a Gorlin
The well-known adage “Give a man a fish and you feed him for a day, teach a man to fish and you feed him for a lifetime” has long been a guide for the philanthropic world in general and the Schusterman Philanthropic Network in particular. The essence of philanthropy is to love and assist humanity, not necessarily through endless donations, but through the enhancement of the beneficiaries’ ability to provide for themselves.
With 21st century technology and globalization, there are distinct opportunities for funders to complement traditional philanthropic vehicles with new models of support that enable beneficiaries to become self-sufficient and independent.
At ROI Community, an initiative of the Schusterman Philanthropic Network, we have implemented some of these models with our community of activists and change makers, many of whom are seeking opportunities to scale their ventures.
Several years ago, we started providing ‘micro grants’ to our community members, enabling them to apply for up to $1,000 at a time to cover costs of professional development opportunities. The success of this strategy, as I wrote earlier this year, encouraged us to expand our micro-grants strategy across the Schusterman network, resulting in our recently launched online #MakeItHappen micro-grants initiative.
This year we ventured into crowdfunding, another nontraditional model that enables people to share their causes and raise small amounts of money from a large number of people. The process of crowdfunding basically turns every person into a philanthropist resulting in a greater and broader engagement in the giving process.
Through a partnership with Indiegogo, the fast-growing crowdfunding platform, we developed a designated page on which our members are able to feature their ventures at discounted platform fees. Select projects receive matching funds of up $5,000, thus ensuring that potential donors know that we put our faith and money in our members’ initiatives. We are already witnessing the massive engagement and support for our members’ projects with 16 out of the 23 campaigns on our Partner Page reaching their funding goals (and three still running) thus far with over $294,035 raised.
Our community members’ initial success in this area reflects a crowdfunding market that is showing fast-paced growth, despite the difficult economic climate. An industry report run by Massolutions stated that during 2012, the worldwide crowdfunding volume reached $2.7 billion, raised from over 1.1 million campaigns with 81 percent growth. With thousands of crowdfunding platforms available, some niche and others more broad, the report estimates the crowdfunding market to exceed $5 billion in 2013.
The rise in crowdfunding has helped to democratize philanthropy, taking the decision-making process out of the hands of a few gatekeepers and allowing the masses to decide what causes and projects are worthy of support. One of the most famous examples of crowdfunding was the 2008 Obama campaign, which relied on relatively small investments from many, rather than huge contributions from a few.
In addition, the crowdfunding process acts both as an incubator and as a marketing campaign. Successful crowdfunding allows for initial capital to be raised, awareness to be drawn to the cause, a community of stakeholders to become engaged and emotionally committed and, most importantly, the market to be validated, lowering the risk and increasing the chances of a successful investment.
One example of how our community members are harnessing this trend to their benefit is Waveborn, a company that sells Italian sunglasses at a price well below typical designer brands. For each pair of sunglasses sold, Waveborn provides a person in need with a new pair of prescription eyeglasses or money toward a vision-restoring cataract surgery. Waveborn ran a campaign on the Indiegogo-ROI Community partner page in order to fund the upfront investment needed to design, order and manufacture a shipment of sunglasses in various models and colors. The campaign went viral, raising more than 100 percent above their initial goal. Beyond the additional funds, the campaign also generated an entirely new client base.
Success can be contagious, and even when a campaign reaches its goal, like in the case of the Waveborn campaign, statistics show that people don’t stop giving. The campaigns raise a passion toward a particular venture, which increases participation and pride. These are essential ingredients of any philanthropic venture.
Crowdfunding and micro grants are two models of philanthropy that allow us to empower people to help themselves. As Lynn Schusterman, founder and co-chair of the Charles and Lynn Schusterman Philanthropic Network, recently wrote, they can also help develop and foster a sense of community and sustained engagement with particular causes.
These philanthropic models provide foundations with the ability to take the fish adage one step further by creating the space and momentum for people to teach themselves and those around them to fish, something that will provide the change-makers of tomorrow with their opportunities today.
No’a Gorlin is the Associate Executive Director of ROI Community. ROI is part of the Charles and Lynn Schusterman Philanthropic Network.
cross-posted on YNet News