Crowdfunding: The New Frontier of Corporate Philanthropy
Crowdfunding is the new buzzword in the online universe today and there seem to be more than enough reasons for its soaring popularity. The concept of crowdfunding has taken the world by storm with its unusual and amazing results, but what exactly is crowdfunding and how does it work? Basically, crowdfunding is nothing more than a group of people or crowd coming together to help collect funds by donating money or making contributions which can be to support a cause or a person, distress relief, or even corporate philanthropy. This much is simple to understand and has been seen before, however, it is Internet that has given a whole new dimension to the concept of crowdfunding and changed the rules of this game forever. Internet has pretty much revolutionized the once tedious crowdfunding process, and turned it into an exciting prospect for many.
Crowdfunding owes its origin to another concept, i.e. crowdsourcing where some people get together to raise some money to fund a particular project and crowdfunding is just an extended application of the same concept, just that in the recent times Internet has become a major component of this exercise. Today crowdfunding is commonly used to fund a cause, an entrepreneurial venture, an artistic project or the artist itself, political campaigns, or even scientific research. Upon completion of the venture or project, the investing parties are liable to a share of profits or if the cause is a social one, then it is simply a fund collecting exercise. The Internet has played a major role in the growth of Crowdfunding concept and there are a large number of online sites today which provide platforms for crowdfunding exercises.
Moreover, the success of these sites has been stupendous and this has raised the interest in crowdfunding to an extent that it has become a major venture today.
Crowdfunding can be used for both non profit and profit ventures and even by individuals in distress or those who are in urgent need of help. This has made it all the more attractive for people with all sorts of objectives to venture into Crowdfunding to raise funds.
However, the present scenario is a witnessing a huge increment in the use of crowdfunding for social causes and of these the most prominent one is that of Corporate philanthropy. Corporate Philanthropy has witnessed a steady rise since the increased interest about Corporate Social Responsibility among the professionals and consumers of many organizations worldwide. This renewed interest is the result of an increased understanding of the fact that the corporate world needs to give back to the society or community to which it belongs. Moreover, it has also been asserted that it is playing a role in affecting the consumer attitude today. In fact, a recent study has confirmed that an increasing number of customers are becoming aware of the social endeavors undertaken by a corporate and are more likely to opt for brands or companies who spend a larger amount of funds on their social ventures.
Crowdfunding seems to be the best solution for corporate philanthropy ventures since most such companies who want to give funds for social welfare are often meddled about where to put their money so that it can be actually used. Similarly, on the flip side it is commonly observed that those needy of help or organizations trying to raise funds are also not able to establish direct contact with the corporate or organization willing to help. This used to be a tedious situation earlier but since the advent of internet and the phenomenal rise of social media platforms which provides instant access to all such opportunities for both the parties, it has ceased to be so. In fact, crowdfunding through internet has become an attractive prospect for seekers and givers alike.
Internet and social media are bridging the gap between the different divisions such as non profit organizations, members of the society and organizations or foundations etc. to raise funds for projects or causes of social interest. This has led many to speculate the reasons for the success of online fundraising ventures and there are many merits of the online platform responsible.
The primary reason in this regard is that the Internet provides a ready made interface for Crowdfunding platforms to gather individuals and organizations together, and that too at a pace which was never possible before reducing the tedium and effort considerably, doing the work which needed months to be completed within days. Moreover, online fundraising is much more transparent and many companies today provide complete statistics and figures concerning donations and contributions they made toward social causes. This provides impetus to their business prospects within a short span and enhances their reputation.
The increasing accessibility of crowdfunding which is leaping from computers to mobiles and tablet phones has made possible a real time connection between both the donors and recipients. This has shortened the time span of processes from months or years to days. Moreover, since internet is a powerful search tool, both individuals and organizations can find projects and causes worthy of their support while fundraisers can find prospective donors easily.
In essence, crowdfunding platforms on internet have provided a great platform for corporate organizations and individuals who wish to finance a project that is close to their heart or one they think will benefit their community, and has in the process created a new frontier of corporate philanthropy.