Crowd Funding

Donations crowdfunding has already made a significant impact on the way people support charitable causes. Driven by social media and online platforms, it allows individuals and organizations to access a wider audience of potential donors and has made it easier for people to donate small amounts of money to causes they care about. What does the future hold for donations crowdfunding? To be clear, this article is not about crowdfunding that offers backers a reward of any kind – beyond the warm feeling people get from helping someone else. It is not about crowdfunding to invest in business equity, or to earn interest through lending on a peer-to-peer basis.

Advantages

One of the key advantages of donations crowdfunding is its ability to democratise fundraising. Instead of relying on a small number of wealthy donors, donations crowdfunding allows organisations to use digital technology to tap into the power of the crowd, which can lead to more diverse sources of funding and greater public/citizen engagement.

Another advantage of donations crowdfunding is its ability to create a sense of community around a cause. Donors who contribute to a crowdfunding campaign often feel more connected to the cause and to the other donors who have supported it. This can lead to increased engagement and advocacy for the cause, as well as ongoing support for future fundraising efforts.

One more trend that is likely to continue is the increasing focus on transparency and accountability. Donors want to know exactly where their money is going and how it is being used, and organisations that can demonstrate their impact are likely to be more successful in their fundraising efforts.

Finally, there is likely to be continued growth in niche crowdfunding platforms that cater to specific causes or communities. These platforms can provide a more targeted audience for fundraising efforts and make it easier for donors to find causes they are passionate about. Women represent over 70% of fundraisers and donors in social crowdfunding, and a growing number of platforms cater specifically for this demographic.

What are the most common reasons to ask for donations?

There are many reasons why people may ask for donations, and the reasons can vary widely depending on the individual or organisation. At a personal level, one of the most common reasons people ask for donations is to cover medical expenses. This can include surgery, hospital bills, and ongoing treatment and medicines for chronic illnesses. In addition to medical expenses, people may also ask for donations to support personal emergencies such as job loss, eviction, or unexpected expenses like car repairs.

Many people also ask for donations to support education, whether it’s for a school or a particular project, to support scholarships and grants programmes for students, or on a personal basis when financially-challenged individual students seek support.

On a larger scale, a common reason for donations is to support disaster relief efforts for humanitarian purposes. This can include natural disasters like hurricanes and earthquakes, as well as man-made disasters like terrorist attacks.

Non-profit organisations often rely on donations to fund their programmes and services. This can include organisations that work in areas like animal welfare, human rights, and environmental conservation. Some people may ask for donations to support arts and cultural organisations, such as museums, theatres, and community arts programs. This is often also known as civic crowdfunding.

These are just a few examples of the many reasons why people may ask for donations. Ultimately, the decision to donate is a personal one, and individuals may choose to support causes that are meaningful to them for a variety of reasons.

What market share do the leading donation platforms have?

The donations crowdfunding market is highly competitive and there are many platforms available. Here are some of the most popular platforms and their market share:

GoFundMe is the largest donations crowdfunding platform, with a very dominant market share estimated to have been around 50% in 2020. Its 2022 Giving Report claims the GoFundMe community has raised $25 billion since 2010, for a wide range of causes including medical expenses, education, and disaster relief.

Facebook Fundraisers is a relatively new player in the donations crowdfunding market, but it has already become one of the most popular platforms. It allows individuals and organizations to create fundraising campaigns directly on Facebook, and has an estimated market share of around 20%. 

PayPal Giving Fund is a donations platform that allows donors to give to a wide range of charitable organizations. It has a market share of around 10%.

JustGiving is a donations platform based in the UK that supports a wide range of causes. It has a market share of around 5%.

Whilst Kickstarter is mostly known as a popular crowdfunding platform for creative projects, it also supports charitable causes. It has a market share of around 3%.

It’s worth noting that these market share estimates are based on publicly available data and may not be entirely accurate. Additionally, the donations crowdfunding market is constantly evolving, with new platforms entering the market and existing platforms expanding their offerings.

The average donation size and amount raised

Data sources unfortunately include many instances where different types of crowdfunding have been bundled together, and reliable figures for donations-only crowdfunding are hard to find. The average donation also can vary widely depending on the campaign and the cause it supports. Data that is even just a year or two old can give a misleading picture given the general public’s response to appeals during Covid, and the more recent global cost of living crisis. There also seem to be more and more natural disaster appeals and humanitarian catastrophes due to extreme weather conditions attributed to the climate crisis.

Similarly, the average amount raised by campaigns can vary widely depending on the scale of any campaign and the cause it supports. Some campaigns may receive just a few hundred dollars, while others may receive hundreds of thousands or even millions of dollars.

What other platforms are for donations only?

There are several other donations-only crowdfunding platforms that focus specifically on charitable causes. Here are a few examples:

DonorsChoose is a crowdfunding platform that connects teachers in the United States with donors who want to support their classroom projects. Donors can browse through hundreds of projects and choose to support the ones they are most passionate about. DonorsChoose charges a 15% fee on donations to cover the cost of operating the platform.

GlobalGiving is a crowdfunding platform that supports grassroots organisations around the world. It allows donors to choose from thousands of projects and organizations working on issues such as education, health, and economic development. GlobalGiving charges a 5% platform fee, plus a 3% payment processing fee.

Ketto is a crowdfunding platform based in India that focuses on social causes, charities, and personal causes. The platform was founded in 2012 by Varun Sheth, Kunal Kapoor, and Zaheer Adenwala, and has since become one of the largest crowdfunding platforms in India. Users can create campaigns for social and charitable causes, as well as personal causes such as medical expenses, education, and creative projects. Ketto provides tools and resources to help campaigners reach a large audience and raise funds quickly and efficiently.

The platform also partners with a number of NGOs and non-profits to support their fundraising efforts, and has helped raise funds for a variety of causes including disaster relief, education, healthcare, and animal welfare. Ketto also places a strong emphasis on transparency and accountability. The platform has a verification process in place to ensure that campaigners are legitimate and that the funds raised are used for their intended purpose. The platform provides regular updates to donors and supporters on the progress of campaigns and the impact of their donations.

AngeLink is an example of a platform designed specifically for women. It is the world’s first social crowdfunding platform powered by women, based in Florida and launched by founder Gerry Poirer. Over 70% of donations campaign organisers are female, and women make up the vast majority of donors – giving small amounts of money to help each other far more often than men.

The AngeLink platform is designed specifically to empower women entrepreneurs and investors. Its mission is to close the gender gap in funding for women-led startups by providing a platform where women entrepreneurs can showcase their businesses to a community of female backers. The platform also provides resources and mentorship opportunities for women entrepreneurs, with the goal of helping them succeed in their ventures. There is a 0% platform fee, though credit card processing fees still apply.

These are just a few examples of the many donations crowdfunding platforms that are available. Depending on the specific cause or project you want to raise money for or support, there may well be other platforms that are better suited to your needs.

Challenges

Despite its many benefits, donations crowdfunding also faces some challenges. One of the biggest challenges is the potential for fraud and abuse. Crowdfunding campaigns are not always vetted, and there have been cases where individuals or organizations have used crowdfunding to raise money for fraudulent or non-existent causes.

The topic is of particular media interest in India, where the share of GDP (gross domestic product) invested in public healthcare is relatively low, and so many people crowdfund to pay medical expenses. 73% of India’s rural population accesses only 25% of the country’s healthcare infrastructure, and 55 million people are pushed into poverty each year due to healthcare costs. The high volume of crowdfunding projects asking for donations attracts scammers who hope to blend in.

Another challenge for maintaining the popularity of donations crowdfunding is the high fees charged by some crowdfunding platforms. While donations crowdfunding is generally more cost effective than traditional fundraising methods, some platforms charge high fees that eat into the funds raised through donor generousity.

A third challenge is dealing with governments that want to restrict donations that finance activities they do not approve of.

Donations crowdfunding platforms with high fees

There are several donation crowdfunding platforms that charge high fees. Here are three examples.

GoFundMe, which is estimated to have a 50% market share of the donation crowdfunding sector, charges some of the highest fees: a 2.9% payment processing fee, plus a $0.30 per donation fee. It also charges a 5% platform fee, which is deducted from the total amount raised.

Kickstarter is better known as a crowdfunding platform for creative projects, and it charges relatively high fees compared to other donations-only platforms. It charges a 5% platform fee, plus a 3-5% payment processing fee, depending on the location of the donor.

Indiegogo is a popular crowdfunding platform that is better known as a quasi-sales channel for finished products, though it does carry donations-only projects. It charges a 5% platform fee for successful campaigns, plus a 3-5% payment processing fee, depending on the location of the donor.

It’s important to note that while these platforms charge fees, they also offer a range of services to help campaigns succeed, such as payment processing, marketing tools, and customer support. Ultimately, the decision of which platform to use will depend on a number of factors, including the specific needs of the campaign and the target audience, and the extent of a social media-literate support team that any project leader may have access to promote the campaign.

Government interference

It is not unknown for governments to restrict, or interfere with, donation crowdfunding activities through edicts and constricting regulations. Here are two examples of trying to deny financial support to groups that do not follow government policy.

Chinese authorities are assembling legislation that will require all donation crowdfunding projects to be submitted for approval before they can run. The number of crowdfunding initiatives in Hong Kong soared during the 2019 protests, notably the 612 Humanitarian Relief Fund, which provided financial support for those injured or arrested during the unrest. Many successful personal crowdfunding projects were used by demonstrators in Hong Kong to pay their subsequent fines.

A campaign organised to support truckers in Canada who did not support the government’s compulsory vaccination scheme during Covid raised millions of dollars on GoFundMe. The Canadian government pressured the platform to end the campaign, and not hand over the money. GoFundMe says most of the money was returned to original donors. Over $7 million of the money raised in a follow-up campaign on the US GiveSendGo platform remains largely unaccounted for.

Overall, donations crowdfunding is likely to continue to play an important role in charitable giving in the years to come. As technology continues to evolve, we can expect to see new innovations and platforms that make it even easier for people to support a wider range of causes they care about.

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What Does The Future Hold For Donations Crowdfunding? Republished from Source https://crowdsourcingweek.com/blog/future-for-donations-crowdfunding/ via https://crowdsourcingweek.com/feed/

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What ethical considerations should businesses keep in mind when using crowdsourcing?

Much is written about the benefits of crowdsourcing for businesses. They include access to people with specialist skills at only the times they are needed, and indeed any extra pairs of hands that are needed temporarily to meet heightened demand. Also, outsourcing of mundane tasks through platforms such as Mechanical Turk. Entire businesses have been built on the back of workers in the gig-economy, including the legions of people who deliver our online shopping to our homes, or drive us to places in their own vehicles. Employers would do well to remember that when using crowdsourcing to complete tasks or solve problems, there are some ethical crowdsourcing considerations to bear in mind.

Businesses often talk of using gig-workers as helping them find a personal work/life balance, letting them fit work patterns around other responsibilities and interests. For better-educated people, and qualified professionals, that may be the case. However, nearer the other end of the scale are many workers whose greatest aspiration is to be recognised as a  regular employee, with payment for some time off and when they are sick, with medical insurance (particularly in US), employment rights and even pension contributions.  For many of them, gig-work is taken on a needs-must basis, juggling numerous income streams with working hour opportunities handed out corresponding to various measures such as customer review ratings, and the ability to work long shifts with minimal washroom visits.

Piece-work, in which a worker is paid a fixed piece rate for each unit produced or action performed, regardless of time taken, is often outside on any minimum wage legislation. Whilst the gig-economy can provide income opportunities to a more diversified workforce, African gig workers, for example, grapple with concerns including depressed earnings, the absence of benefits and job security, and insufficient safeguards against occupational hazards

Here are six factors to keep in mind if you have a business that employs crowds of gig-workers, or use crowdsourcing to gather ideas or problem solutions.

Fair compensation

The crowd should be compensated fairly for their contributions. Businesses should ensure that the compensation offered is commensurate with the work required and the value of the contributions. If recruitment and payment is through an agency, are payments divided equitably between the agent and the gig-workers?

Informed consent

The crowd should be fully informed about the project and what their contributions will be used for. Businesses should provide clear and transparent information about the scope of the project, the intended use of the contributions, and any potential risks or limitations involved.

Respect for privacy

Businesses should take appropriate measures to protect the privacy of the crowd. This includes ensuring that any personal data collected is handled in accordance with applicable data protection laws and regulations.

Intellectual property rights

Businesses should respect the intellectual property rights of the crowd. This means ensuring that the contributions are not used beyond the scope of the project without the permission of the contributor, and that any intellectual property rights associated with the contributions are appropriately attributed and protected.

Quality control

Businesses should ensure that the quality of the crowd’s contributions meets the required standards. This includes implementing processes to verify the accuracy and completeness of the contributions, and providing feedback to the crowd to improve the quality of future contributions.

Transparency and accountability

Businesses should be transparent about their use of crowdsourcing and accountable for the impact of their actions on the crowd and society at large. This includes being open about their motivations and goals, and addressing any concerns or complaints raised by the crowd.

By keeping these ethical considerations in mind, businesses can ensure that their use of crowdsourcing is fair, respectful, and beneficial for all parties involved.

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Ethical Crowdsourcing Republished from Source https://crowdsourcingweek.com/blog/ethical-crowdsourcing/ via https://crowdsourcingweek.com/feed/

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For people my age, Han Solo telling Luke Skywalker “Great, kid! Don’t get cocky!” after Luke shot down a ship for the first time is a seminal movie moment. As a kid, I didn’t even know what “cocky” meant! But I knew the line was hilarious. I repeated it over and over again — no doubt annoying everyone around me.

I really wish some bank executives had listened to Han Solo. If they had, we might not have had the bank runs we saw over the past several days. And we wouldn’t be worried about crypto’s banking problem.

One of the ironies of the crypto industry is that it needs banking partners. Think about it. Crypto is designed to disrupt money and banking as we know it. But to operate right now, crypto companies need banks. Crypto exchanges need banks to hold onto the cash their customers deposit to buy and sell crypto. Crypto startups need banks to handle payroll, rent, vendors and the many other services needed to run a business. Crypto venture capitalists need banks to hold onto their money so they can invest it. But because the U.S. government has been telling banks to avoid the crypto sector, only a few banks have chosen to work with the crypto sector. Silvergate and Signature were two of those banks. Both banks (along with Silicon Valley Bank) got a little cocky. And now they’re paying the price.

Silvergate was making tons of money being a crypto bank. In fact, it was making so much money banking the crypto sector that it didn’t bother to diversify its client base. Oops. Here’s how the Silvergate bank run played out. First, it took much of the money that had been deposited and parked it in traditionally safe investments like Treasury notes, mortgage-backed securities, and municipal bonds. The goal was to generate some income off of the money that it was just holding onto. There’s nothing wrong with that. And these investments are generally not risky. 

But then the Federal Reserve started raising interest rates to fight off inflation and Silvergate’s assets dropped in value. Uh-oh. Then the FTX debacle combined with a crypto bear market and a tech recession prompted Silvergate customers to withdraw money. And they kept withdrawing. And all of sudden, Silvergate didn’t have enough cash or assets (even if it sold them) to cover the withdrawals. 

If Silvergate had a wide range of clients, the FTX debacle and crypto markets wouldn’t have prompted a bank run. Insurance companies, retail stores and small businesses had no reason to run out and withdraw their money. But because it hadn’t diversified its customer base enough — AND it hadn’t figured out how to manage the Fed rate hikes — a bank run ensued. 

The same thing happened to Silicon Valley Bank (SVB). Most of SVB’s clients were in the tech industry. The tech industry is getting hammered. If SVB had diversified its client base, there likely wouldn’t have been a bank run. But SVB got cocky. It was living the big life as the tech industry boomed. And it didn’t de-risk its customer base.

Signature’s crypto risk was much smaller than Silvergate’s. It had a diverse client base. But the government still closed it because of the potential of “systemic risk.” In many ways, Signature is a victim of circumstances. People became worried about smaller regional banks. That triggered withdrawals. The government didn’t want another bank to go under. That combined with Signature’s small crypto business — which the government is not happy about — prompted the closure.

Signature underestimated how much the government disliked the fact that it had crypto clients — and the rapid spread of the bank runs to a lesser degree. It got a little cocky. And it paid the price.

All of this should serve as a wake-up call to all banks. They can’t afford to get cocky — especially with rates rising and inflation being out of control. They need to actively manage risk and ensure that they’re well capitalized. It’s not a passive activity anymore. And banks need to act accordingly.

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Where Silvergate, SVB and Signature Went Wrong Republished from Source https://earlyinvesting.com/where-silvergate-svb-signature-went-wrong/ via https://earlyinvesting.com/feed/

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The strategic importance of AI technology is growing exponentially across industries and shows no signs of slowing down. Many businesses are exploring and investing in new solutions to stay competitive in the age of AI — from banking using AI to crunch big data, to customer service departments relying on AI to route calls to the correct agent, or the eventual transformation of the automotive industry with self-driving cars that can make the roads safer and less congested. 

According to a recent Accenture Report, “over 1,600 C-suite executives and data-science leaders from the world’s largest organizations found that nearly 75% of companies have already integrated AI into their business strategies and have reworked their cloud plans to achieve AI success.” In other words, if you’re not already invested in AI, you’re falling behind. 

Today’s Advantage…Tomorrow’s Table Stakes

As markets are becoming increasingly competitive, companies are looking for a competitive edge. To that end, AI tools are a great starting point for product development and innovation. 

AI can do many things that we can’t, and every year that list of skill sets increases. AI can process large amounts of data exponentially faster than a human, finding novel patterns we can’t see, and then make reliable decisions based on that data. For example, by analyzing consumer data and identifying market trends, software with AI capabilities like Tableau and Power BI can help uncover opportunities that would otherwise get overlooked. 

“I think this is huge,” said professor Erik Brynjolfsson, director of Stanford University’s Digital Economy Lab. “Most of the U.S. economy is knowledge and information work, and that’s who’s going to be most squarely affected by this,” he said. “ I like to use the word ‘affected,’ not ‘replaced,’ because I think if done right, it’s not going to be AI replacing lawyers (as one example); it’s going to be lawyers working with AI replacing lawyers who don’t work with AI.” 

While embracing AI today can create a competitive advantage, it won’t be long before using AI becomes the new table stakes. As usual, late adopters risk falling behind their competitors in terms of the many benefits AI offers, including cost efficiencies, productivity advantages, novel insights, and product or service quality. 

A Watershed Moment for Efficiency 

AI’s ability to automate tasks and processes that would otherwise depend on human labor, or be impossible, is itself an opportunity for employees to allocate more time for innovation and strategic decision making. For example, in the age of AI, personal assistants such as Alexa, Google Assistant, or Cortana, save time in countless ways. While the feature sets vary, most allow for internet searches, media playback, message dictation, scheduling, and alarms, all by voice command. 

Then there are the many AI notetakers that instantly transcribe and summarize meetings with nearly 100% accuracy. With the chore of note taking eliminated, employees can instead focus on the high-level takeaways and connect ideas that they otherwise wouldn’t have had time to focus on.

One of the applications of AI technology that is truly revolutionary is the recent proliferation of AI powered writing tools such as Notion AI, ChatGPT, and Brightidea Memo AI Writing Assistant, that make blank page syndrome a thing of the past. AI writing tools may not give you a polished final draft, but they can help get you started by quickly writing the first draft of a blog post, job description, meeting agenda, business memo, email, or essay. 

In the age of AI, writing tools are especially handy for companies that innovate by using the lauded Working Backwards Memo Writing Process developed at Amazon for bringing new ideas to market. This is because the Working Backwards process largely consists of writing a painstakingly thorough memo that enables the team to truly understand if the proposed idea is viable, and if so, what the specific constraints and challenges are that could prevent successful execution. With AI writing tools integrated with your idea management software, you can quickly develop a clear outline for your memo that you can then flesh out in collaboration with cross functional partners and stakeholders. 

Streamlining Each Stage of the Innovation Process

There’s a common misconception that innovation is just about jotting ideas down on sticky notes. The reality couldn’t be further from the truth — innovation is a formal discipline and a multi-stage process, from the initial spark of ideation, to idea collection, collaboration with colleagues, evaluation of an idea’s merit, development of the idea into a plan, and then executing on that plan and reporting on results. AI tools can support all of these stages to varying degrees. 

Ideation is the fun part where you can let go of practical concerns and see where your mind takes you in the age of AI. But it takes a lot of ideas to finally find one worth allocating capital and resources to. Fortunately, idea generation can be supported by many of the numerous mind mapping AI tools that not only help you produce more ideas but see connections between them. Once you have plenty of promising ideas they need to be captured and stored for further collaboration, evaluation, and development. With idea management software, input from employee surveys and polls, comments from your social media monitoring, insights from your analytics team, ideas from brainstorms and pitch competitions, cross functional stakeholder requests, and directives from management, can easily be collected and stored in a centralized location where each input can be fairly evaluated. The idea management software can then work with AI personal assistants to easily capture new ideas wherever and whenever they happen. 

After the idea has been captured, the process of evaluating the merit of the idea begins. ProoV is a company that streamlines the proof-of-concept process for enterprises looking to test and evaluate new startup solutions. The company’s AI-based technology analyzes the distributions and trends of the datasets provided and generates new databases that are used within the proof-of-concept environment. This allows companies to test the solutions securely in a production-like environment before reaching production. 

Building a case for the viability of an idea, especially those that are game changing and defy business-as-usual processes, takes extensive research and subject matter expertise. AI can aid this stage of the innovation process by making knowledge more accessible. For example, many researchers in the age of AI have been using it as a tool to more quickly gather and synthesize a large number of research papers, which can greatly speed up the literature review process. 

Brian Uzzi, the Richard L. Thomas Professor of Leadership at the Kellogg School of Management, and his team, used AI to evaluate the text of journal papers to predict whether the conclusions in the papers would be reproducible. According to a Kellogg Insight Article “the AI model was able to predict replicability as accurately as expert prediction markets, which can take as long as a year to complete, in much less time and effort. This could give researchers and journal editors a powerful tool to aid in the review process of scientific work.”

AI can also help more accurately calculate the risk of an R&D project, which can reduce financing cost and allow companies to more efficiently allocate resources. This has huge implications for the pharmaceutical industry. According to PharmaNewsIntelligence “Over the years, drug discovery has become increasingly competitive and expensive, which has driven pharmaceutical companies to look into AI as a new method to reduce research and development costs, while avoiding costly errors.” If successful, these efforts can reduce the cost of developing drugs, while improving patient outcomes.

Crowdsourcing 2.0

Crowdsourcing is another area that has been impacted in the age of AI. While companies see crowdsourcing as a valuable and cost-efficient mechanism, the discipline of crowdsourcing has matured and there’s a growing awareness of its limitations. However, AI has breathed new life into the practice of crowdsourcing by helping to efficiently collect and interpret crowdsourced data. For example, crowdsourcing is increasingly used in health and medical research. In this use case, a group of people is asked to provide data regarding their health, which AI collects and analyzes to support the development of new treatments. The crowd would then either get paid for its data or would provide the data for free to help advance a good cause. 

A real life example of this took place during COVID-19 when an app called How We Feel was used to gather data from its hundreds of thousands of users in order to develop predictive models to help overcome testing capacity limitations and identify disease hotspots. The app also helped doctors, scientists, and policymakers understand what factors were most associated with people who tested positive in that period such as key symptoms, exposure risks, pre-existing medical conditions, and demographic information. 

Improve Your Innovation Outcomes with AI 

Whether you’re looking to generate more and better ideas, enhance efficiency, streamline operations, identify patterns, or de-risk a new initiative, there are numerous AI tools on the market that can help. Innovation in the age of AI can help your company be more productive, more informed, and gain novel insights that would otherwise be inaccessible, incorporating AI into your innovation program is a no-brainer. And, best of all, many powerful AI tools are very affordable. Taking advantage of these tools today positions you and your team for long term growth and success as AI quickly becomes an essential tool in business. 

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