Crowd-funding

Honouring the donor

Institutions channeling donations must have a reasonable low level of administration cost, in order to honor the giver. HR&S proposes 0- 20%, ALL institutions along the line included, as well as company tax. The administration costs shall only cover unavoidable costs including bank fees, transfer of funds fees, and web-site fees.

Thus, collecting and distributing donations CANNOT be a business idea, receiving institution in target countries CANNOT use the funds to cover their own institution’s running costs but only project specific direct  implementation costs, and activities MUST generate evidence based sustainability for the social good they implement. HR&S provides the practical strategies and implementation coordination enabling a sustainable impact.

HR&S proposes international-national social enterprises as the sole method to eradicate extreme poverty. Local business loans and local business coaching can preferably be funded through donations.

Crowd-funding sites

All HR&S crowd-funding activites are managed by Action10. Action10 charges 3% for the administration in Sweden.

Action10 Crowd-funding
Admin costs 3%. Tax exempted association registered in Sweden.
Global Giving
Admin costs 10-15%. Tax exempted foundation registered in USA.
DonorSee
Admin costs 20%.  Corporate limited by guarantee registered in UK. Pays corporate tax 21 %, but some projects have tax exemption.
Alaya for Good
For profit company registered in Switzerland that sell employee activies to company as CSR. A side activity is a crowd-funding platform, where employees and also the company can donate. It may be that private donors do not pay any administration costs, but that this covered by the income from the CSR.

Webinars

Crowdfunding platforms are invited to attend HR&S 10h webinars on Global Development – Evaluation Planning. EUR 1,000 per five participants.

Context & Strategy

Crowdfunding is defined as the process of taking a project or business, in need of investment, and asking a large group of people to supply this investment (Forbes and Schaefer, 2017). This phenomena has exponentially increased in popularity over the last few years and, as a consequence, is now presented as a viable method of funding for designers. Regardless of its new-found popularity, however, statistics show that the vast majority of crowdfunding campaigns dramatically fail with 81% of failed campaigns reaching less than 20% of their funding goal. In order to crowdfund successfully the project creator must present both a product suitable for crowdfunding as well as create a campaign that is suitable for that product (Panchal, 2015). Both the design process and the construction of a successful campaign must be studied to reach overall solutions. Modern crowdfunding can be represented by four distinct models; i) reward-based, investment in exchange for gifts or products, ii) equity-based, investment for a percentage stake, iii) lending-based, peer-to-peer lending and iv) donation-based,  charitable giving (Bock et. al., 2014)

Forbes and Schaefer (2017) proposes that i) project creators should set the lowest possible funding goal for their project. This is because the participants were drawn to campaigns with a higher percentage funded as oppose to a higher amount funded. ii) Project creators should reduce the profit margin on popular reward options to encourage more backers. iii) Tangible reward options were shown to be preferable but “gimmicky” products such as t-shirts and stickers were of low interest to the participants. iv) Videos should be kept short and the product description should be used to address important information such as development timelines, business plans and the use of funds. v) This information should capture the reader’s attention through the use of high quality media content. vi) Overall, project creators need to construct their campaign to convey credibility and create product demand.

Some crowd-funding sites, like Gboal Giving, has a system of compiling what smaller donations will be invested in. This is to support a donor with understanding what her/his donation can be used for.
HR&S states that it is important to understand that this is what a donation CAN be used for but not what it WILL be used for,  because donors cannot drive programmes in such a way. BUT if we see it as examples and encouragement for supporters to know that every piece of support is important.

HR&S assumes that crowdfunders are willing to support the Target Partners but not the HR&S Coaches. Crowdfunders may also not want to invest in computers and internet.
We still need the funds, why HR&S turns to Action10 for support to coaches and Global Giving for support to Target Partners.

References

Forbes, H. and Schaefer, D. (2017), Guidelines for Successful Crowdfunding. Procedia CIRP, 60, 398-403
https://www.sciencedirect.com/science/article/pii/S2212827117301178

Panchal,  J. H. (2015) Using Crowds in Engineering & Design: Towards a Holistic Framework.  Purdue University, The United States of America.

Bock, J. A., Frydrych, D., Kinger T. and Koeck B. (2014) Exploring Entrepreneurial Legitimacy in Reward-Based Crowdfunding. Venture Capital, 16, 247 – 269.

Crowd-funding sites

FundRazr

FundRazr is a free crowdfunding and online fundraising platform first released in 2009. FundRazr operates internationally in 35+ counties with the largest markets being United States, Canada, United Kingdom and Australia. It allows users to run a wide-range of crowdfunding campaigns by creating fundraising pages and sharing it via social media, messaging apps, email and more to raise money for 100+ types of causes such as nonprofit, medical care, education, community help, poverty alleviation, arts, memorials, and animal rescue causes. FundRazr also powers more than 4000 nonprofits, charities and social enterprises with an advanced fundraising toolset for free.

History FundRazr was founded in 2008 by Daryl Hatton. The head office is located in Vancouver, British Columbia, Canada. The platform was initially a Facebook app that allowed users to crowdfund money over Facebook.It has since developed into a full online fundraising tool set. FundRazr was the first crowdfunding platform to provide a collaborative community payment model, wherein funds are deposited directly to a company or cause.

Business model for the user of the platform FundRazr uses the donation/perks crowdfunding model available for organizations, charities and personal causes with two pricing options: free (0% platform fee), standard (5% for advanced functionality) and pro (fee recovery models). A fee is not charged if no fund is raised. FundRazr allows users to create a campaign page for their cause. The page can then be shared through social media, email or embedded onto a third-party website to solicit donations from supporters. Supporters contribute to a cause through comments, shares, likes, and donations, which are all visible on Facebook. FundRazr is in partnership with PayPal which allow users to deposit and withdraw funding. On 20 August 2013, FundRazr introduced “Crowdfunding as a Service” technology, which allows web publishers and companies to run crowdfunding service on their site. FundRazr subsequently announced its first official PoweredBy partner, HealthLine in 2013. As of 2013, illness, medical and health-related causes represent 58% of money raised. Memorials/tributes represents another 12%.  As of July 2018, FundRazr had raised over $116 million from over 140,000 campaigns.

DonorSee

www.donorsee.com
For profit in USA. The United States imposes a tax on the profits of US resident corporations at a rate of 21 percent. DonorSee take a flat rate of all donation 20%, Stripe included, and as a for-profit in US I understand that DonorSee pays 21% in company tax. In addition DonorSee have some projects on their web-site that is tax-exempted for US donors. As they are a for-profit in the U.S.they do not have to infrom about how their money is spent.

DonorSee is a humanitarian crowdfunding platform that is intended to allow donors to quickly and easily help people in the world’s poorest countries. The platform lets donors see how their money makes an impact through raw video updates. The company is based in Fairfax Station, Virginia.

History The company was founded in March 2016 by Gret Glyer, in response to what he saw as poor management of aid money by large aid organisations. Glyer raised $150,000 in seed funding to build the platform on web, iOS and Android. On  January 26, 2017, the Peace Corps issued a ban preventing their volunteers from using DonorSee. Glyer subsequently initiated a Change.org petition asking that President Trump intervene and lift the ban. Glyer’s goal for 2017 is to reach $75 million in revenue. On March 14, 2018, DonorSee announced that they would be imposing a maximum donation level of $450 on future projects posted on their platform.On June 3, 2019, Glyer launched a Kickstarter campaign to fund the publishing of a book If the Poor Were Next Door, which will detail his experiences with severe poverty which led him to create DonorSee.
Business model DonorSee allows aid workers to build a donor base by posting a feed of projects specific to the country they are serving.[12] During this process, members post a picture or video of the potential recipient and a story explaining how the money will be used, along with the amount of money needed.[13] They also have the option to say which country the project is in, and whether or not they want to raise money on a monthly basis. After posting, people can then donate to these projects using a debit or credit card, which is processed by Stripe. Stripe charges a fee averaging 6.25% per donation and DonorSee takes an additional fee averaging 13.75%. After the project is funded, aid workers are expected to post visual follow up, which often includes the donor’s name in the video. While DonorSee is not a 501(c)(3) organization, certain projects are still 100% tax-deductible. Additionally, DonorSee has implemented an extensive vetting process, through which they claim to reject over 90% of submitted projects.

About
In 2013, Gret Glyer headed to Malawi as an aid worker, where he funded and built over a hundred homes and a girls school. While crowdfunding for a few school projects, he posted updates on YouTube. To his surprise, people enjoyed it: They could actually see where their money was going towards.But he was frustrated that there wasn’t an easy way to fund projects without going through the slow, costly bureaucracy of traditional charities. So he started a for-profit company.Fairfax, Va.-based DonorSee is the for-profit. The app allows users—mostly foreign aid workers—to post the pictures and stories of people in need. Those on the app can donate to the posts they choose; Often in nominal amounts. Original posters are then encouraged to post video updates showing how the money is being spent or reactions from the recipients. The for-profit status, interestingly, is also important to DonorSee’s success. Nonprofit classification was originally intended to alleviate the financial pressures on charities by giving them tax-exemptions, so more money could be used for the intended cause. Glyer and others argue that the crossing-the-t’s-and-dotting-the-i’s required of nonprofits syphons too much money to the costs of running a large organization without the pressure to maximize profits that keeps spending in check. Eventually, he says, large charities become more concerned with their own interests and less concerned with the people they’re supposed to be helping. By classifying themselves as a for-profit company, Glyer says, they’re able to operate leaner than a traditional nonprofit. Most importantly, the team is able to operate at hyper-speed compared to large charities, transferring money to recipients in days, instead of months. To Glyer, that’s vital. He often tells the story of a young Malawian girl who was bitten by a crocodile. She couldn’t wait the estimated month for money to find its way down from a traditional charity, but an aid worker posted on DonorSee and had the money to get her help the next day. “I have a 501(c)3 [nonprofit], it’s not that I was too lazy,” Glyer states, talking about a separate nonprofit he set up while in Malawi. The profits? DonorSee takes a flat fee on all donations which, according to the website, is to “keep the lights on” for the roughly 10-person team. Additionally, the company’s financial transactions are handled by Stripe, which takes a certain percent as well. It’s not that I was too lazy. According to DonorSee, other charities’ administrative costs can be upwards of 40 percent, so they consider the roughly 20% percent transaction fees a selling point. Unlike nonprofits, though, DonorSee won’t have to disclose its spending, and some people are more comfortable with that than others.  In DonorSee’s model, the assurance given by nonprofit status is replaced by a direct response from people who receive the donations. It suggests that donors don’t need audits and board reviews when they can actually see where the money is going. (DonorSee, donor do?) The other potential problem is the ability for anyone to post asking for money—maybe a Nigerian prince with a picture off Google Images. Glyer says they’re prepared for scammers with built-in measures to avoid abuse, though. The most reliable way, Glyer says, if you don’t personally know an aid worker, is to donate to Staff Picks—projects posted by aid workers that DonorSee confirms are the real deal. Otherwise, users can choose aid workers with a significant following, with many past projects and video updates. Like a Facebook account, as a user’s profile grows, it becomes more difficult to fake.

Kwanda

kwanda.co
https://find-and-update.company-information.service.gov.uk/company/12378728

KWANDA LTD, Company number 12378728

  • Registered office address: International House, 64 Nile Street, London, United Kingdom, N1 7SR
  • Company type: Private company limited by guarantee without share capital.
  • Incorporated on: 27 December 2019
  • Accounts: First accounts made up to 31 December 2020
  • Nature of business (SIC): 88990 – Other social work activities without accommodation not elsewhere classified
  • 1 officer: Role: CRAIG, Jermaine Adeniyi, Director, Nationality: British, Country of residence:United Kingdom, Occupation:Company Director

Kwanda pays salaries, software fees, corporate tax bank fees etc of maybe EUR 100,000 per year?

 

Alaya for Good

In 2018 the Co-Founders André Abreu, Guillaume Granelli, Niklas Van Neyghem and the Founding Partners Pierre-Jacques Dauvert and Magino Marveaux-Cochet create the digital platform Alaya. Their mission? To help connect companies and importantly, their people to nonprofit organisations and make it easy to do good, at work. Alaya announces a new round of investment of 2 million CHF with a group of venture funds and experienced business angels. The funds will reinforce its international expansion into the UK, Germany, Singapore, and Spain, and support the widening of its product offering.

Alaya is a social engagement platform that allows thousands of individuals, brands and companies to do their part and act upon the social and environmental challenges of this century while building a positive culture at work.
Investors Alaya has two investors;BackBone Ventures and investiere.Read more at CB Insights: https://www.cbinsights.com/company/alaya 

Mission To enable companies to build a purpose-driven culture and engage employees to make a meaningful impact.
Performance
https://www.cbinsights.com/company/alaya-reviews
Address Chemin de la Crétaux 4 Renens, 1196 Switzerland
Crowdfunidng platform Alya publishes our campaigns. Only the employees of or client companies can see the fundraising campaigns. Donations are administrated by raisenow/stripe to the bank account of Action10.

 

 

HR&S Institutional Capacity

Crowd-funding & Prospect Research

What Prospect Research Tells

HR&S uses prospect research to learn more about potential donors. The information from a prospect screening will tell HR&S a donor’s: i) Past giving to HR&S non-profit programme or frequent crowd-funding donations sites ii) Basic information like name, address, and marital status.

 

Crowd-funding Metrics

Justification for tracking

HR&S is measuring a whole host of metrics ranging from return on investment (ROI), crowd-funding metrics to matching gift metrics as well as major gifts metrics.
Measuring crowd-funding metrics will helps HR&S adjust course when something isn’t working like it should be.

What to Track

1. Success Metrics for Prelaunch
  • Lead Generation

    Even before you get started, it’s useful to have a list of email addresses belonging to people who’re most likely to respond. You can calculate the number of emails you need according to your campaign’s goals. Use the following formula to calculate the ideal number of email addresses for a successful launch: (Funding Targets x 30%) / (Conversion Rate x Product Value). Therefore, your early success is determined by the number of immediate hits you get as soon as the campaign goes live. The more leads you have in the early stages, the more successful your campaign is. You can generate leads earlier in the campaign through one or more of these ways:Family and colleagues,Press coverage,Emails to relevant groups/people.
    If you have a dependable group of supportive people around you, count on them to give your campaign a kick. Secondly, you can opt for press coverage. Unfortunately, media outlets hesitate to cover campaigns that haven’t been launched yet. However, if you have a considerable social media following, you can work around this. Lastly, sending emails or getting in touch with relevant personnel can help in the prelaunch phase. For instance, if you’re running a charity campaign, email the philanthropists in your area. Target the posh parts of town and stick to a wealthier audience.

2. During the Campaign

The first two to three days will give you an idea about the future of your project. How well is your project doing as a budding prospect? Is it garnering enough attention? Some experts say that your campaign should achieve up to 25% of the funding goal in the first two days. However, some projects stall after going up to 30%. So, the 25% mark isn’t a guarantee for success.

  • Conversion Rates

The second metric to measure crowdfunding success is conversion rates. Generally, conversion rates up to 10% are considered successful, but you don’t have to chase after a number. Instead, you should only focus on one thing: are the rates going higher? You can do that by analyzing the campaign page and statistics of your social media ads. Plus, JustEarlyBird lets you manage the campaign by showcasing the rewards data in real-time. It shouldn’t come as a surprise to you that rewards are a catalyst for crowdfunding success. People want to feel validated for pledging, and rewards help do that. That’s basically the whole crux of marketing your crowdfunding project. You show the audience a scarcity of rewards and they get a psychological urge to act quickly before the stock runs out. As mentioned above, you need success metrics to determine when and where your campaign needs changes or upgrades. For instance, if the conversion rates are low, go to the JustEarlyBird dashboard. Adjust the rewards – showing a scarcity – and check if that boosts the conversion. Likewise, you can tweak other things along the way, such as the target audience for your Facebook ads. However, you have to be a bit careful while advertising. You shouldn’t be spending more money on the ads than they’re bringing in – as product sales.

3. Post-Campaign Metrics

Once you’ve reached the target amount, the race isn’t over. It has just begun. Now, you can start taking pre-order or selling tickets for your book launch or concert. Indiegogo has a built-in tool for this, called InDemand. It lets you accept pre-orders from your backers. If you did everything right in the earlier steps, this shouldn’t be much of a problem. However, if the conversion rates, cost per acquisition for Facebook ads, and campaign page visits were lower earlier, you should expect the numbers to drop in this step. Suppose you’re making a short film. People may have pledged $10 to support your project, but how many of them are willing to give another $30 to come and watch it? That’s where the real success lies. Your crowdfunding campaign is only successful if the events following it favor your product or service. To ensure long-term support from your backers, you must give them good rewards.

Crowdfunding Calculator

Crowd-funding calculators are essential to successful and strategic fundraising. They are most useful when HR&S has a specific goal in mind and needs to reach that goal in a specified timeframe.A crowd-funding calculator is used to determine how many donations HR&S needs at each giving level. Not every donor is able to give the same amount.  No fundraising methodology is perfect, but a crowd-funding calculator can help HR&S to more accurately pinpoint where the institution needs to focus the fundraising efforts.

Crowd-funding Officer & the team

Qualifications. In general, a crowd-funding officer should have the following qualifications; familiarity with fundraising, good social media skills, determination to solve problems, familiarity with HR&S non-profit programme.

Responsibilities. A major gifts officer spearheads all of the crowd-funding initiatives at HR&S and works closely with fundraisers and the prospect research team. A crowd-funding officer will be responsible for soliciting important donations.

 

Major Gifts and Matching Gifts

Pairing Matching Gifts & Crowd-funding donations

Combine major gifts and matching


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