This document summarizes a report by Nesta on crowdfunding opportunities and challenges for charities, community groups, and social entrepreneurs. It finds that while awareness of crowdfunding is high, few organizations actually use it, largely due to lack of skills, knowledge, and capacity. Donation-based crowdfunding is most commonly used to fund events, campaigns, community spaces, and equipment. While crowdfunding provides opportunities to mobilize volunteers and fund projects that otherwise couldn't be funded, challenges include difficulty funding large projects and potential to disadvantage those without digital skills. The report recommends organizations try crowdfunding, partner with platforms, and funders provide support to build skills and integrate crowdfund

1. CROWDFUNDING GOOD CAUSES
Opportunities and challenges for charities,
community groups and social entrepreneurs
Crowdfunding Good Causes
June 6th, Nesta
#Crowd4Good
Jonathan Bone
jonathan.bone@nesta.org.uk
@JonoBone
Peter Baeck
Peter.baeck@nesta.org.uk
@PeterBaeck
Download the report:
www.nesta.org.uk/crowdfunding-good-causes

3. CROWDFUNDING GOOD CAUSES
Opportunities and challenges for charities,
community groups and social entrepreneurs
BACKGROUND
• Little research looking at
crowdfunding good causes
to date
• Market studies show
growing but small market
• Evidence of opportunities
for non financial and
financial benefits

4. AIMS OF THE REPORT
Characteristics of crowdfunding for good
causes, opportunities and challenges
What is keeping community and voluntary
organisations from using crowdfunding
How can we make the most out of
crowdfunding for good causes
What we did
• Review of existing
literature (not much)
• Interviews with some of
the leading platforms
focusing on good
causes
• Survey of 450+ CVS
organisations

5. WHAT IS IT
Crowdfunding is a way of
financing projects, businesses and
loans through small contributions
from a large number of sources,
rather than large amounts from a
few. Contributions are made
directly or through a light–touch
platform rather than through
banks, charities or stock exchanges

6. DIFFERENT MODELS
Donation-based: People donate money towards a project. Except for seeing the
feeling of seeing the project go ahead, receive no financial return or product.
Average campaign size - £714.
Equity based: Enables the crowd to invest for equity, or profit/revenue sharing in
businesses or projects, with the hope of a financial return if the business exits.
Average campaign size - £523,978
Community Shares: Similar to standard equity except they can only be sold by
cooperatives and community benefit societies and although investors may sometimes
earn interest , they cannot go up in value. Average campaign size - £309,342
Lending based: People seeking a loan apply through the platform, with members of
the crowd taking small chunks of the overall loan. Profit is made when loan is repaid
with interest. Average campaign size - £76,280
Reward-based: People contribute to projects and receive a non–financial reward or
product in return. Average campaign size - £6,326.
£%

7. DIFFERENT MODELS
Donation-based: People donate money towards a project. Except for seeing the
feeling of seeing the project go ahead, receive no financial return or product.
Average campaign size - £714.
Community Shares: Similar to standard equity except they can only be sold by
cooperatives and community benefit societies and although investors may sometimes
earn interest , they cannot go up in value. Average campaign size - £309,342
Reward-based: People contribute to projects and receive a non–financial reward or
product in return. Average campaign size - £6,326.

8. EVENTS AND
ACTIVITES
NewVIc Ability Counts Football
Squad - £630 to get to the
nationals
CAMPAIGNS AND
MOVEMENTS
Keep streets live raised £3,285 from
133 backers to go towards paying legal and
campaigning costs
GARDENS PLAYGROUNDS
AND GREENSPACES
Global Garden, Global Kitchen raised
£10,894, from 110 Backers to set up a
community garden and kitchen
BUILDINGS,
RESTORATIONS AND
INFRASTRUCTURE
PortPatrick community Benefit
Society - £103,000 from 363
backers to save harbour
EQUIPMENT
AND TOOLS
Help a Heart campaign
raised £1,808 and £1,107
in 2 campaigns to buy
defibrillators for a local
community.

9. OPPORTUNITIES
Mobilising volunteers and other non
financial contributions
Helping fund projects that would
otherwise not get funded
Transparency on who and what gets
funded
Increased experimentation
Marketing and awareness raising
64% of
donation
fundraisers
unlikely to
have received
finance
elsewhere
90% of those
donating
subsequently
promoted it to
their social
network
25% offered to
volunteer with
the project
they supported
Around 75% stated
the money they
donated would
otherwise be given
to charity

10. CHALLLENGES
Crowdfunding is hard and there are
limits on the size of what can be funded
Negative impact on diversity, equality
and participation
Balancing one off support through
crowdfunding against need for long
term finance
Replacing government funding
Potential conflict between the crowd’s
and the organisation’s priorities
Risks favouring
those who are
digitally savvy
with money to
fund projects
Community
Shares
requires a
change of legal
status
Average
donation and
rewards
campaign =<
£10K
Equivalent to
small grants
Often requires
months of
work for
relatively small
amounts of
money

11. What are the main barriers
keeping charities,
community groups and
social entrepreneurs from
using crowdfunding?
How can these be
addressed?
Survey of 452 charities, community
groups and social entrepreneurs to
understand their perception
awareness and usage of
crowdfunding
?

12. High awareness
but little use of
crowdfunding 74%
aware of but
hadn’t used it
11%
Have never
heard off it
15%
had used it

13. Why aren’t organisations using crowdfunding?

14. The biggest barriers to using crowdfunding are
skills, knowledge and capacity

15. Why aren’t organisations using crowdfunding?

16. What factors would make organisations
use crowdfunding?

17. Organisations would use crowdfunding
if they could fund core costs

18. Factors that would make organisations
use crowdfunding

19. Perceived Suitability of the different
crowdfunding models to fundraising needs
Community shares was
least well known
model but seen as 3rd
most suitable
Equal awareness of
donation and rewards,
but rewards is seen as
less suitable

20. Perceived Suitability of the different
crowdfunding models to fundraising needs
Community shares was
least well known
model but seen as 3rd
most suitable
Equal awareness of
donation and rewards,
but rewards is seen as
less suitable

21. Perceived Suitability of the different
crowdfunding models to fundraising needs
Community shares was
least well known
model but seen as 3rd
most suitable
Equal awareness of
donation and rewards,
but rewards is seen as
less suitable

22. How does crowdfunding compare to
other forms of funding

23. How does crowdfunding compare to
other forms of funding

24. How does crowdfunding compare to
other forms of funding

25. Recommendations
• Try and set up at least one crowdfunding campaign
• Join up fundraising and campaign teams to run their
crowdfunding campaigns
• Curate a group of projects on a pre-existing platform or
develop a customised crowdfunding platform
For charities, community groups and social entrepreneurs…

26. Recommendations
Funders, investors and other supporters of community and
voluntary sector organisations should…
• Invest in building crowdfunding knowledge, skills and capacity building.
• Integrate crowdfunding into existing funding schemes through match
funding
• Support transition from crowdfunding projects to developing sustainable
organisations
• Set up referral schemes from grant funders and social investors
• Test and measure effect of crowdfunding

27. CROWDFUNDING GOOD CAUSES
Opportunities and challenges for charities,
community groups and social entrepreneurs
Panel Discussion
Karl Wilding, Director of Public Policy and Volunteering,
NCVO
Julia Groves, Partner and Head of Crowdfunding,
Downing LLP and Director, UK Crowdfunding
Association
Ben Warren, Investment Associate, Big Society Capital
Chair: Peter Baeck, Head of Collaborative Economy
Research, Nesta
#Crowd4Good
Download the report:
www.nesta.org.uk/crowdfunding-good-causes