Why is Crowd Funding a viable funding source for the NGO and Social Enterprise Sector?

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Government & Nonprofit

Published on April 5, 2014

Author: MatthewTukaki

Source: slideshare.net

Description

I sit on a number of both public and private sector boards as well as several advisory board in academia. The fact is we all struggle to fund the very important work we do and often the task is made harder as traditional sources of funding (such as government, foundations and international development agencies) becomes harder to source. A number of people, including myself, have turned to Crowd Funding to build their social enterprises - the challenge is, that often people don't plan out what it means to either build a campaign or execute it. They all don't understand how to use social media to engage their existing networks to support the campaign and often build it around the fact that its a great idea - the truth is, the old Hollywood tag line doesn't work - "build it and they will come". To help people unpack this process I have recently written an eBook that takes you through six simple steps.

1. Investing in the crowd, understanding the market
2. Designing the campaign
3. Developing your first crowd funding page
4. Underestimating your financial need
5. Incentivise your investors
6. Harnessing the power of networks and social media

It is worth the download and time investment to unpack some of the content and consider why crowd funding could work for you or your project.

Matthew Tukaki http://www.entrehub.org/#!ebooks/c1bfp
Available on Kindle, iBook, Android and PDF eCopy

What are we covering in this pocket eBook? The questions a lot people and organisations are asking is – how do I engage in the art of crowd funding? For many in the social enterprise, not for profit and non-government space raising money to fund projects or whole organisational business plans can be fairly tough. Crowd funding is fast becoming an alternative and many have already rushed to try and take advantage of it. But just as there are some really great examples of success – there are also many hundreds and thousands of failures. Evidence shows that:  The global crowd funding market has grown 80% to a total of $2.67 billion of funds raised.  Reward based platforms accounted for $1.4 billion or 52% of total funds raised.  The US crowd funding market was $1.6 billion (60%); Europe was $945 million (35%) while the rest of the world accounted for $125 million (5%).  The number of crowd funding platforms (CFP’s) worldwide grew 17% from 452 to around 530. This growth is slowing as the market matures and will start going negative once the industry enters a consolidation phase. Once the industry leaders are established M&A activity starts to increase.  Indigogo is the No.2 CFP with 0.8% of the total crowd fund market (or 1.3% of rewards based market).  30% of crowd funding platforms are generalized or broadly focused in terms of the types of projects hosted.  70% of crowd funding platforms are specialized or tightly focused on specific industries or niche projects.  Kickstarter received over $319 million of pledges from over 2 million backers for over 40,000 projects.  Over 18,000 Kickstarter projects were successfully funded (44%) raising over $270 million in capital  Only 8% of projects with targets of $100,000 or more were successful (large projects are very hard)  Only 17 projects raised $1+ million – that is 0.04% of all projects and 0.09% of all successful projects (most of these were either in Games, Technology or Design) This means that a large percentage do not reach the stated or desired goal. Our pocket eBook is not a comprehensive guide, instead it provides six important and fundamental learning bites to enable you to formulate the strategy, understand the market and developing the first campaign. It shows you how and why you need to harness social networks and why incentivisation can often make the difference. We will be covering: 1. Investing in the crowd, understanding the market 2. Designing the campaign 3. Developing your first crowd funding page 4. Underestimating your financial need 5. Incentivise your investors 6. Harnessing the power of networks and social media

The Authors: Matthew Tukaki and Austin Kim The authors, Matthew Tukaki and Austin Kim, have been involved in many hundreds of start-ups and both have sat on advisory boards both in the public and private sector. Austin is the founding Managing Director of Standfirst Telecommunications and business incubation at Samsung SDS South Korea. Aside from being a respected business leader and owner of one of the Australasian region’s largest social investment business, Matthew is commonly referred to as the go to guy when it comes to social enterprises and non-government organisations solving everything from funding crisis to governance, structure and market need. He was Australia’s first Representative to the United Nations Global Compact and was appointed by the Secretary General to the UNGC’s governing Board in 2013. He is currently a Director of the Board of Australia’s peak mental health body, Suicide Prevention Australia where he chairs the all-important Audit, Finance and Governance sub-committees in addition to sitting on the Advisory Board of Deakin Universities Centre for Sustainable and Responsible Organisations. At the beginning of 2014 he took up the Chairman’s role of the International Advisory Board of Joint Initiative between the United States National Socio- Environmental Synthesis Centre and the United States National Science Foundation’s new Centre for Sustainability Research. Matthew is a rarity in so far he is one of the few people to span the business, government, social enterprise and non-government sectors – we would also throw in academia! Both Matthew and Austin have come together to share their experiences and insights into what works and what doesn’t when it comes to crowd funding for social enterprises, the not for profit and non- government sectors. To find out more go to www.entrehub.org or search “EntreHub” on Facebook to join our group. You can also follow Matthew on Twitter @tukakimatt

To get involved in the conversation visit: www.entrehub.org For MT, MT, SG, AK #getamongstit Copyright 2014 HBU Publications All rights reserved Printed in Australia and New Zealand Published April 4th 2014 04/04/2014 First published in March of 2014 exclusively online through lulu.com and the eBook store of Apple Corporation Published by EntreHub.Org an initiative of the Sustain Group Level 5, 104 Bathurst Street, Sydney NSW 2000 Australia I www.entrehub.org Text Copyright © 2014 by Matthew Tukaki & Austin Kim The moral right of the author has been asserted All rights reserved. No part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form, or by any means (electronic, mechanical, photocopying, recording or otherwise) by any person or entity (including Google, Amazon or a similar organisation) without the prior written consent or permission of the author and or publisher. Any person or entity who does any unauthorised act in relation to this publication may be liable to criminal to public prosecution and civil claims for damages. ISBN: 978-1-291-81648-8

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