At first glance, it might seem as though crowdfunding and social enterprise are not an obvious match – there are other, more traditional routes to funding, after all (such as applying for grants).
However, as traditional investors become more wary of investing in something that is seen as high risk, and as government or public funding becomes more difficult to acquire, crowdfunding might just be the game changer that social enterprises are looking for.
Crowdfunding a social enterprise: why it works
1. Crowdfunding puts you in charge
With crowdfunding, you don’t need to worry about silent partners or investors looking over your shoulder – which is even more crucial for an organisation that is driven by a cause. If your financial backing comes from crowdfunding, you’ll have the final word on how your money is spent, who you help, and what to do next. Your vision will never be compromised.
2. Crowdfunding lends itself to uniting behind a cause
For any project to crowdfund successfully, its marketing campaign needs to inspire as many people to get behind the cause as possible. However, if social change is at the root of your venture, it should be much easier for you to find people who share your passion. Tapping into a ready-made audience has both short and long-term benefits: you should be able to amass donations more quickly than other crowdfunding ventures and gain lifelong supporters at the same time.
3. Crowdfunding is fantastic for brand awareness
As a social enterprise, you may not have a huge budget for general brand marketing – but fortunately, crowdfunding is a publicity exercise in itself. As you work hard to get the word out to inspire would-be donors, you will be spreading the message of your brand to a potentially huge audience (and this will only grow as you attract more and more donors). Harness the power of the crowd!
4. Crowdfunding allows you to measure impact easily
Deciding to put your entrepreneurial skills to work for the good of society is an amazing thing; but knowing how to get the most out of your talents, and where to focus your energies, can be difficult. Crowdfunding will allow you to assess how effective your venture will be in terms of solving a particular social problem, and – indeed – how many people are interested in supporting your cause. This initial information will not only be useful when thinking about the future of your enterprise and what direction you’d like to go in, but also if you’re hoping to approach investors further down the line.
Final thought: pick the right platform
There are many crowdfunding platforms to choose from, but not all are created equal – so it pays to do your research. Think about the message your enterprise will convey, and choose a service that fits: for example, what do you want to offer your followers if they donate – some kind of reward? Shares in your company? What fees are you willing to pay your platform for hosting? And do you want a platform that gives you the flexibility to receive all funds raised – whether you reach your target or not – or do you want to go for an ‘all-or-nothing’ model (i.e. setting a target and only receiving funding if you meet or exceed it)? From Crowdfund Campus to Kickstarter, there are so many options: you just need to find the best one for your business!
Crowdfunding campaigns are so much more than money-making exercises: they are valuable teaching tools, both for those running the crowdfunding campaign and the audiences they are trying to reach. Here at Crowdfund Campus, we are proud to support all student and graduate entrepreneurs who want to test their ideas and find new profit sources. To that end, we provide both a simulated experience (called Sandpit) and a live marketplace. For further insight into our unique platform, please give us a call on +44 (0)7545 898120 or drop us a line at firstname.lastname@example.org – we can’t wait to help you make the most of your business idea!