In 2014, Gnucoop developed the Produzioni dal basso (PDB) web application (www.produzionidalbasso.com), a crowdfunding platform, that allows registered users to propose and fundraise money for their projects. The system is very user-friendly. Anyone can propose a project or decide to support it through different funding methodologies.
Crowdfunding is a collective effort of a group of individuals networking and pooling their resources for a specific project initiated by other people. This is usually done via or with the help of the Internet. Single projects are usually financed through small contributions from a large number of individuals. This is a more casual, yet powerful, approach based on crowd participation as well as an alternative method to specialised grant applications or more formal and traditional fundraising techniques.
Do NGOs use crowdfunding to fund their developing projects?
Most of the projects published on ‘Produzioni dal basso’ are submitted by single individuals or small/local associations. However crowdfunding can also be an interesting tool for NGOs to fundraise money for their projects. Although this way of fundraising is not yet very popular among NGOs, there are some interesting aspects related to the use of crowdfunding by NGOs:
- gaining trust via (financial) transparency. Many crowdfunding platforms show project funding status on daily basis, as well as the number of days that are left to fundraise the remaining balance and the total amount needed per project. This helps to increase transparency and NGOs’ accountability;
- strengthening the connection between donors and beneficiaries. Anybody, from beneficiaries, to supporters, etc…can post comments about the project or engage in a discussion related to the project, via social networks. This would increase donors’ involvement giving them the possibility to play a more active part or role in the realization of the project;
- co-financing: often NGOs need cofinancing to reach project budget; crowdfunding could be a way to fundraise the remaining balance;
- return on involvement: with a crowdfunding campaign it is important to think about what people want in return for their support. In general, three different categories of returns can be identified: social return (good feeling), material return (pre-sales of a product) or financial return. Although charities normally only focus on social return, it can be very interesting for them to look into other type of crowdfunding models, like reward-based crowdfunding (small or special gifts as return) of social loans (a loan with 0% interest).