How Crowdfunding Sites Could Be Better

71bd37e48549f2a7ffc0ca517f7b63eb

By Raymund Flandez Austin, Tex.

As mass fundraising sites like Kickstarter and Indiegogo, have become increasingly popular, charities are at once embracing them and worrying about what that means for the future of giving.

The market is growing: In 2013, crowdfunding, as the process is called, raised to $3-billion. By 2025, it’s projected to balloon to $93-billion. Just recently, Kickstarter hit $1-billion in projects that have been funded by individuals. (The company takes 5 percent of every transaction.)

In a panel at the SXSW Interactive festival titled, “Ethics and the Future of Crowdfunding for Communities,” Miriam Kagan, a senior principal at Kimbia, and David Neff, a digital strategist at PricewaterhouseCoopers and co-founder of Lights. Camera. Help., explored the tricky issues prompted by the rise of the new fundraising approach.

They said that for many big, established nonprofits, the largest concern is that individuals who don’t have formal ties to an organization may be the ones pitching an idea on the crowdfunding sites. As a result, Ms. Kagan says, charities don’t have a chance to train volunteers about the mission of the organization and what it wants to communicate to donors.

Another challenge: Charities typically don’t know who gives to them through crowdfunding sites so they can’t build a relationship to encourage people to give more. In some cases, the crowdfunding sites won’t say, and in others they charge for the information.

But the money and exposure are often helpful, so charities know they need to work with the sites.

With that in mind, Mr. Neff and Ms. Kagan, with help from session attendees, came up with guidelines they would ask crowdfunding sites to follow:

• Require solicitors to say how much overhead they are putting into cost estimates for projects.

• Disclose the fees that sites collect and state how much of the money actually goes to the intended organization.

• Include regular updates on each fundraising project to show how the effort is going.

• Provide information about what supporters can do beyond giving cash, like volunteering.

• Spell out what happens if a project doesn’t meet its goal. Do donors get their money back? Do the nonprofits keep it?

• Describe in detail what contributors are getting in exchange for their money.

• Post detailed information about the relationship between the nonprofit and the individuals who are raising money.

Soure :

http://philanthropy.com/article/SXSW-Update-How-Crowdfunding/145257/

Tags: , , ,

HEADLINE NEWS

U.S. News & World ReportNo Cash for Hate, Say Mainstream Crowdfunding FirmsU.S. News & World ReportThe block on mainstream crowdfunding is just the latest blow to far-right activists operating online. In the last 24 hours, neo-Nazi website the Daily Stormer had its domain regi [...]

FortuneUncensored Social Network Gab Raises $1 Million in Crowdfunding CampaignFortuneA crowdfunding campaign for Gab, a Twitter-like social network that touts its commitment to freedom of speech, surpassed $1 million yesterday. The company claims it is politically neutral and committ [...]

Baltimore SunHarford still opposes crowdfunding sites for school donationsBaltimore SunRaising money through online crowdfunding sites is an ideal way for teachers to find the funds to purchase classroom materials and should be restored, the head of the Harford County teachers' u [...]

League: Warriors legend Monty Betham drops crowdfunding bidNew Zealand HeraldFormer Warriors Monty Betham has pulled the pin on his quest to launch a crowdfunding campaign to buy the Warriors. With Warriors owner Eric Watson locked in negotiations to sell, Betham made a plea to league [...]

Crain's Cleveland Business'Smaller' gifts can go long way for Clinic's crowdfunding platformCrain's Cleveland BusinessFor an institution accustomed to securing multimillion-dollar donations, Cleveland Clinic's latest fundraising effort has some relatively [...]

GeekZing Smart Light Passes Crowdfunding Goal With Flying Colors ...GeekAt age 31, I still prefer to keep a light on in the hallway, illuminating my way to the bathroom in the middle of the night. (God forbid I step on the creeping cat—or ...and more » [...]

ForbesWhat Works In Equity Crowdfunding -- Insights From ResearchForbesAs we have recently celebrated the fourth anniversary of the signing of the JOBS Act into law, it is a good time to take stock of the effect that the legislature had on equity crowdfunding in the United States. It [...]

Deccan ChronicleHow to make crowdfunding work?Deccan ChronicleVarun, based on his experience, also says, that people new to crowdfunding should not be complacent with their campaigning — “I've seen a lot of people, who just think that crowdfunding is free money. They have a very [...]

FortuneDreamHost Sets Up Crowdfunding Page to Aid Trump Government FightFortuneThe Los Angeles-based web host DreamHost, which is fighting the Department of Justice over its attempt to seize records of visitors to an anti-Donald Trump website, has launched a crowdfunding campaign to a [...]

DualShockersBounty Battle Rolls out the White Carpet with Successful Crowdfunding CampaignDualShockersWhen we last checked in with the indie-obsessed fighting game, Bounty Battle, it was halfway through its $30,000 crowdfunding goal. Now with 3 days left to go, it's surpassed thi [...]

CFB Finance

Marketwired

  • Crowdfunding
  • Crowdfund
  • Peer to Peer Lending
  • FinTech
  • Reg A+
  • Reg CF
  • Crowdfunding USA

Press Release

Live Crowdfunding .tv

What's Next Step in Regulation A+ JOBS ACTS Title IIII :L Interview : Steve Cinelli with Brian Korn Securities and Crowdfunding/Peer-to-Peer Lending Lawyer, Watch more video library | Conference | Interview | Campaign Showcase | Research | Education |