Crowdfunding: Not Just for Entrepreneurs
Crowdfunding isn't only in the domain of new businesses and entrepreneurs. Organizations, scholars, researchers, and those wishing to raise social awareness can take advantage of crowdfunding's unique opportunities and connect with audiences far beyond their immediate geographic region.
The recent JOBS Act in the U.S. has made this web-based fundraising model more legitimate than ever. However, like any source of investment, there are advantages and disadvantages to consider. Is crowdfunding right for your organization or project?
The recent JOBS Act in the U.S. has made this web-based fundraising model more legitimate than ever. However, like any source of investment, there are advantages and disadvantages to consider. Is crowdfunding right for your organization or project?
Pros
1. With the streamlined, 'automated' process of online fundraising, organizations and leaders can devote more attention and resources to other aspects of their projects. For instance, those involved in academia can use the time to strengthen or elaborate on their research goals.
2. Crowdfunding introduces opportunities for those who did not have the financial advantage previously. This means that funds go to a more diverse and intelligent group of thinkers and leaders, rather than an exclusive group of for-profit ventures. Educational projects, for example, are given the spotlight thanks to education-focused crowdfunding sites like Funding4Learning.
3. Crowdfunding establishes a solid, engaged audience right from the conception of your project. Rather than attempting to build an audience through cold calling or social media, most services allow your funders to be notified of every update and milestone.
A crowdfunded project to build a community center would already have potential built-in clientele from its peer funders. Additionally, every step of the project - gathering building materials, establishing the framework, all the way to the opening date - is easily communicated to backers.
4. More complex and creative ideas that would not normally be supported through traditional investor channels are given exposure and international awareness. For example, the Invisible Brain Injury Project on FirstFunder works to shed light on and search for cures to post-traumatic stress in army and war veterans.
Cons
1. Spending less time pitching one-on-one to investors means you lose valuable, constructive feedback that can allow you to hone your startup or project. Researchers, charities, and advocacy groups might miss out on key details in their pitch (such as realistic goals, end-dates, etc.) that would make their projects more attractive to backers.
2. The distance between investor and project is widened through crowdfunding, making both sides more susceptible to fraud. Additionally, backers might not have the information necessary to make informed decisions about where their money is going.
3. Crowdfunding might not be in the best interests of those with long-term projects. Backers generally want to see results within a short period of time. For instance, local community programs are a more realistic crowdfunding service than large scale projects such as building infrastructure in underdeveloped nations.
4. While creativity and out-of-the-box thinking is encouraged, projects or causes that are overly complicated or too difficult to explain in a simple paragraph will leave potential funders feeling cold.
For inspiration, read the successful science research grant proposals on Microryza like Crowdcuring the Blues or Analog Genetic Circuits for Interactive Learning. They're concise, clear, and tell you where your money is going.
Crowdfunding Services
Fundageek - Research, education, community support
Funding4Learning - Educational projects
First Funder - Community-based projects
IAmScientist - Academic research
Microryza - Scientific research
PetriDish - Scientific research
Rally.org - Educational, medical, and charitable causes
ZenFunder - Civic causes
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