There has been a rise in Tech for Good companies that are looking to raise funds through crowdfunding. We look at what is driving this trend.
This article is sponsored by Donr - a Tech for Good organisation specialising in mobile giving technology, as well as tailored solutions for the charity industry.
Raising money is one of the requirements of a successful organisation, especially one with ambition and exciting growth plans. Organisations typically raise money when they know what they offer is successful and well-liked. Raising money helps you to achieve your aims. With the additional money, you can hire more people and get new products and services launched sooner. Once an organisation has established that it has a strategy that would benefit from further investment the question then is which route to take to get that investment. We have all heard stories about businesses that have raised millions from venture capitalists (VCs), but whilst that looks exciting, it is not always the best approach. Sometimes too much money means an aggressive VC wants a large return on their investment as soon as possible, which can change the dynamics of the business and what it stands for. What is needed is just enough money. Enough that a business can grow and take leaps forward, but not so much that they start to aggressively chase profits to match their new valuation and expectations. This is where crowdfunding comes in. It allows businesses to receive investment whilst staying true to the community that the business is part of.
For people who want to get involved, most crowdfunding platforms allow for investments for as little as £10, promoting the involvement as much as the investment. There is also a financial and tax benefit for most investors that back a company through crowdfunding, as most of the businesses raising money qualify for the government SEIS or EIS schemes, which provides an incentive for investors to back smaller businesses. If you do want to get involved in a crowdfunding campaign - and there are a lot of options, not just Tech for Good businesses, including everything from microbreweries to football clubs - then you will need to spend some time reviewing the documents that the organisation presents. Making an investment is then a straightforward process to do, using your credit or debit card.
Every crowdfunding campaign is about the investors as much as it is about the company they are investing in. The great thing about crowdfunding is that everyone that invests becomes an owner of the business. The investors are part of the success and growth of the business and can share in the future accomplishments. There are a number of well-known crowdfunding platforms, including Kickstarter and Indiegogo, that link organisations seeking investment with a potential investor base. There are also more specialised platforms for niche markets, such as Causes, which focuses on Nonprofit fundraising. Donr is a Tech for Good enterprise that has helped over 1,450 charities raise £500,000 in the first year from launch. One of BusinessCloud’s 100 FinTech Disrupters of 2019, Donr work to help digitise charity fundraising - with a specific focus on helping charities to access and use mobile giving technology.
It is estimated that just 9% of all payments will be made using cash by 2028. The commercial sector is adapting with innovative solutions, charities are at risk of being left behind. Donr have identified 3 problems facing the charity sector’s efforts to innovate and adapt to digital fundraising principles:
In order to develop the products and services that they believe will help charities digitise fundraising, Donr have been working with crowdfunding platform Crowdcube to secure funding. They hope to introduce a number of new products in 2020, including Charity Lotteries, Individual giving pages, a corporate giving solution, and the ability to purchase merchandise via SMS. They have a funding target of £280,000 in order to secure the funds to introduce these products. Within the Tech for Good sector, there is already a very strong community, which is maybe why crowdfunding is growing. Crowdfunding works so well because it allows businesses to reward the people that believe in them and to make them a part of their future. To find out more about Donr’s crowdfunding campaign [click here].