If there is a revolution that marks the beginning of the 21st century, then this must be the connectivity with events, issues and persons all over the world. Connected to this connectivity is “participatory” effect.
After introduction, the notion of participatory democracy, notably thanks to the power of social media and online petitions, a new way of financing has blossomed. Individuals are gradually discovering that they can act by themselves for causes that are dear to them, to bring to the world the change they want to see.
Crowdfunding allows, through the financial participation of individuals who recognize themselves in a project or who want to support one, to participate in the development of a project that may not have been able to see by traditional financing. Beyond former borders, innovative projects have been created, that stand for innovation and change. Projects that wouldn’t be supported by the normal financial system, are now nourished. Crowdfunding is therefore part of the collaborative economy, since it relies on trust
The buzz is going around that crowdfunding creates new possibilities. But what is the success rate and what makes people participate? First of all there are a lot of different sorts of crowdfunding.
Crowdlending: an innovative way of financing personal projects
For a long time, banks were the only ones able to present an offer of financing. Now individuals can obtain peer to peer lending, whether for a cash need, a desire to travel, for a renovation of a house or a big operation that you are unable to finance yourself.
Small business and crowdfunding
Crowdfunding makes a real difference for small business. It also allows companies to federate around them a community of customers, collaborators and suppliers. Especially because small business should present their business model, product or service to the crowd of individuals to convince them to finance them, crowdfunding makes it possible to carry out a prototype of a new product.
Investors can either receive product or services from the business or they can invest in the business’ capital and receive interests in return. Unlike classical ways of financing, crowdfunding allows investors to choose themselves where their money goes. There is a direct connection between the investor and the entrepreneur. They share an goal. Success of the company.
Crowdfunding plays here the game of proximity through savings that are not only responsible and solidarity, but also transparent and close to investors.
How NGOs find a new way of fundraising
It now seems quite inevitable for NGOs to take a closer look at these new fundraising techniques if they want to sustain their budgets. First, because the financing through governments’ helps is less and less substantial. Secondly, because the growth of crowdfunding is increasingly orienting the public towards digital financing of projects, humanitarian or otherwise, which will undoubtedly divert it from the traditional physical collections for which it is solicited by the historical NGOs.
Crowdfunding allows the shortening of the circuit between the financer and the project, which reinforces the feeling of transparency and traceability. Indeed, it responds to the emergence of a concept of proximity in which citizens wish to give more meaning to their financial contributions by following their own sensitivities and limiting intermediaries.
To guarantee its independence, Médecins Sans Frontières (Doctors Without Borders), launched in November 2016 a crowdfunding platform, with the aim of collecting 1 million euros in 60 days. Intended for the youngest, between 18 and 35 years old, it invited them to pledge on the platform independance.msf.fr and it offered a range of rewards for all amounts, including a guitar signed by the Muse group.
A platform for each project
Thus, the only term of crowdfunding encompasses many realities. Different platforms have different functions, and even different philosophies. While all have in common to create a relationship between a project and investors, some are more focused on NGOs and individuals, while others represent a lever for future business.
I myself pledged Boyan Slat to support him in his vision to clean this world from the plastic waste that we are surrounding us with. Please share your thoughts on crowdfunding so we can learn from it. I didn’t do it for the pledge. It gave me a feeling of participating in a solution of a better future.
As the banks are giving almost no interest on money on the bank it stimulates me to look for alternative forms of investment. From personal to solar and sustainable project. The future will tell, where I will invest my money in.
Now that it is all possible, leaves us with the question does it reach the bigger audiences. My question to you, did you ever pledge a crowdfunding campaign? Why did you? Because of the cause, the product, the pledges or to support a personal goal. Why did you get involved, please share your experiences so we can learn from it.
At DUTCH PICTURE INDUSTRY, we are aware that if people work together on a common project, they can collectively make things happen and change the world.
Recent documentaries and movies dismantled the hidden face of finance and banking sector and showed how they truly are. The wolf of Wall Street, the big short, Inside Job unveiled some complex and scary pieces of info about this “big money industry” on which we have no influence but can have so much impact. Speculation, hedge fund managers, private equity fund managers, real estate fund managers, and future and shorts… The industry is often depicted as a dehumanized world in which the only goal is to make more money.
What do I know about banking? Not so much, I hope the bank keeps my money safe but don’t try to understand what is behind this complex system. However, is it okay to know so little about what are banks doing with our money? As an individual always looking for ways to make this place on earth more pleasant and better, I believe that we SHOULD be aware and interested of what our banks are doing.
What if the bank invests in the nuclear arms industry industries or very polluting industries, as many of them do?A recent Belgium’s study revealed that our money placement, were at the top of our carbon footprint with 100 tons of CO2 per year. That is so much more than our consumption and production footprint so we should care about the banks investments. We can make a choice by choosing a bank that doesn’t do this kind of investment. Big improvements have been made in this direction, particularly by the DIVEST movement; an international movement which only goal is to put away investment from polluting and fossil energy corporations through petitions and campaigns. I believe that these kind of initiatives are necessary to build a better world. Finally, changing our behaviors, sharing our beliefs and international movements of this type have all the same common purpose to influence the settled globalized system runs by big corporations.
Luckily some “ethical banks” are emerging; these banks are working according to the same model as the usual ones but with a different guideline: transparency and trustful policies. Their first objective is not to make profit and enrich the elite but invest and support actions and companies with social and environmental purposes; letting their customers aware of the bank’s activities. Then, choosing a more responsible bank can be a way to show that we don´t agree with the current system and would like to make it change. They are more and more present and popular in Europe.
But still they are part of the financial sector and work on the same model. I would like to explore if we can do without them? So what are our possibilities?
Alternatives to the current banking system exist; new currencies are emerging with communitarian monetary systems. A good example is the district of Brixton in London which has its own “Brixton pound” with its own printed bills and coins. I see these initiatives as a clever way to break the globalized consensus settled in the world today coming with a lot of advantages but some undesirable effects too. It reconciles communities, reduces the production circuit and proves that pull ourselves away from the usual national and international bank system is possible. On top of that, they personalized their money appearance and its 10 pounds bill has the face of David Bowie printed on it; which is much more fun than the Queen! Those solutions are more sustainable as the economy doesn’t only profit to the elite but encourage local economy and small businesses, while limiting environmental impact.
But what to do with your savings? Today, interest rates are so low and economy so fragile that it´s difficult to trust banks for our savings. Savings that we want to make for our children to have an education or to save for a nice holiday. Some people would just take out their money from the bank and hide it under their mattress. But actually, our possibilities are wider today. Crowdfunding platforms and projects like ‘kickstarter’ and ‘kiss kiss bank bank’ for example are a good way to place your money in projects that you believe in. However, you will not be able to send your children to university through crowdfunding invests. So, if you keep looking, there are still other solutions to make profit from your invests… Going in this direction, new crowdfunding platforms like www.oneplanetcrowd.com allows you to invest in some startups and businesses’ projects with the possibility to get good percentage from it in return. Or, invest directly in renewable energy for example seems like a responsible option too to make profit if you’re concerned about the environment and sustainable solutions to fossil fuels and want to slow the bank industry’s power.
So, making businesses, profit, investments, savings without banks is possible; collectivity and sharing have a lot of promises.