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CF4Dev MOOC 2015: Myths and realities of crowdfunding

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Welcome to Activity 3 of Module 1.

Published in: Education
  • ironically the first myth is a myth, it was only the base of the statue of liberty that was paid for with crowdfunding, not one ounce of the actual statue -- that was all paid for by our French friends
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  • Myth 3 surprised me because most of the time in development work some solution comes up and most people think that it would be the only solution. So taking note of this in CF is very appropriate. there are other solutions too. Things work in various combinations especially in development work.
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  • Myth 7 I thought there are only a few CFP. Is there a global directory for the 452 CFP
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  • These myths give a broad perspective of Crowdfunding. The word funding has an effect of limiting the perspective to just fund raising, raising capital and anything around money. In development work there are times we need volunteer spokespeople and ambassadors for our causes who will use their reputation and popularity to draw resources cash included.
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  • @Claire Limbwambwa Eye opening indeed These myths set our perspective of crowdfunding right and broadens our perspective
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CF4Dev MOOC 2015: Myths and realities of crowdfunding

  1. 1. Myths and Realities of Crowdfunding May 2015
  2. 2. Myth #1 Myth: Crowdfunding is a new phenomena. Reality: The Statue of Liberty, erected in 1879, is considered to be one of the first documented crowdfunding projects. Of course, the internet and other ICTs have revolutionized and amplified its reach and scope.
  3. 3. Myth #2 Myth: Crowdfunding is only about raising money. Reality: Crowdfunding can help to raise awareness about an issue, as well as foster volunteer support. Crowdfunding can also serve as an excellent opportunity to test the popularity of a project in a cost-effective way, and to gain feedback to improve the project. Funding isn’t everything.
  4. 4. Myth #3 Myth: Crowdfunding is a fundraising panacea. Reality: Crowdfunding is an important addition to the current set of fundraising and resource mobilization tools available to both non-profit and for profit organizations and causes.
  5. 5. Myth #4 Myth: Most campaigns are successful. Reality: Depending on the CFP and your campaign, only about 9 to 30 percent of projects reach their goal. Of roughly 60,000 unsuccessful projects on Kickstarter, nearly 40,000 failed to reach even 20 percent of their goal. Crowdfunding is a powerful tool but it also takes a lot of experience and know-how to get it right especially if it is your first campaign.
  6. 6. Myth #5 Myth: Crowdfunding only works for raising funds for creative projects and commercial products. Reality: Business and entrepreneurship is the most popular crowdfunding category, raising $6.7 billion in 2014. It’s followed by the category of social causes, which raised an impressive $3.06 billion in 2014.
  7. 7. Myth #6 Myth: Crowdfunding is necessarily risky because it means all-or- nothing in terms of the funds raised. Reality: Some Crowdfunding Platforms (CFPs) offer alternative models such as the flexible or hybrid models, which enable the campaign to receive all funds contributed even if the set goal is not reached. There are of course benefits and drawbacks of each model!
  8. 8. Myth #7 Myth: There are only a select number of CFPs out there, including Kickstarter and Indiegogo. Reality: As of April 2012, 452 CFPs were operating globally. GoFundMe has now surpassed Kickstarter as the largest donation/reward based CFP.
  9. 9. Myth #8 Myth: The most popular types of crowdfunding are donation and reward-based. Reality: Lending-based is the most popular type of crowdfunding, raising $11.08 billion in 2014.
  10. 10. Myth #9 Myth: People are tired of being asked for donations through crowdfunding! Reality: In 2014, donation-based crowdfunding grew by 45%, emphasizing ongoing receptivity to crowdfunding campaigns!
  11. 11. Myth #10 Myth: It is not necessary to offer supporters any reward in non- profit crowdfunding, as their contributions are motivated solely by charity and not self-interest. Reality: While motivations for giving in non-profit crowdfunding differ from other sectors, it is still important to offer contributors an incentive. Author Beth Kanter emphasizes the need for non- profits engaging in crowdfunding to offer impact-based rewards tied directly to the contributor's motivations for giving.
  12. 12. Myth #11 Myth: Crowdfunding is solely the domain of the global North. Reality: North-America continues to lead the world in crowdfunding. However, Asia has risen as an important region for crowdfunding , slightly surpassing Europe in 2014 with crowdfunding volumes of $3.4 billion.
  13. 13. Myth #12 Myth: Crowdfunding is a passing fad. Reality: According to the 2015 Massolution Global Industry Report, CFPs raised $16.2 billion in 2014, signifying a $6.1 billion increase from 2013 levels. The report forecasts that global crowdfunding will reach $34.4 Billion in 2015. It appears crowdfunding is here to stay!
  14. 14. Sources Crowdfunding. What’s in it for development aid? 2015 Massolution Global Industry Report Indiegogo. Insights for 2012.

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