How Enhanced Donor Participation In Crowdfunding Efforts Can Make A Better World
This is a guest post from Piyush Jain, CEO and Co-Founder of ImpactGuru.com
When I co-founded Impact Guru in 2014, there was very little awareness in India about what crowdfunding is and how it works. The person raising funds – the campaigner – shares a fundraising cause with potential donors through social media, and large numbers of online donors give to the project, each giving typically small sums of money on crowdfunding platform websites.
Crowdfunding is set to grow in India particularly for healthcare expenses. In India, about 80% of the total population is not covered under any medical insurance scheme according to the National Sample Survey. Out of pocket medical expenses make up about 62% of all healthcare costs in India, as per IRDAI. Insurance doesn’t cover majority of the costs in critical cases like cancer, organ transplants or heart surgeries. Most patients are unable to get treatment due to lack of funds or bear financial debt due to a medical emergency; crowdfunding is an emerging option that comes with no payback. However, most patients aren’t aware that such an option exists. Smartphone penetration hit 300 million users in 2018, with active internet users to reach 635.8 million by 2021. These trends will only accelerate crowdfunding in India.
Hand in hand with the internet revolution and the social media boom, India is also getting richer. Half of the countries households now belong within the middle-class bracket and have higher disposable incomes than ever before. Most are fluently bilingual, speaking English in addition to their mother tongue, and often also Hindi. This segment of relatively young, urban, and tech-savvy people represent most of the online donors. The question to ask now is, how can we involve donors more in the crowdfunding process? How can we enroll more donors? How are we to increase donor participation in crowdfunding efforts?
First, we will have to see how the campaigner is connected with the donor. Does the campaigner have easy Access to the donor? Is the donor a friend, a relative, neighbor, work colleague? Secondly, the donor needs to Believe in the campaign. An unempathetic donor cannot help you take your project ahead. Finally, your donor must have the Capacity to give – enough money to make a contribution to your fundraiser. Together, these are the ABCs of finding donors who can ensure that your crowdfunding goals will come to fruition.
The next most important thing you can do to help draw in donors to your crowdfunding campaign is to understand their motivations for giving and create conditions under which donors find it easy to feel motivated to give. Some people donate from a purely altruistic impulse. Some feel secure in the knowledge that their monetary gift has made a concrete difference in the world. Many give to save on their taxes while making a difference. Some give because doing philanthropy results in having a better reputation in society. Yet others give in order to set an example, to be admired and looked up to. All of these are equally legitimate reasons for giving, and all donations that come from donors who give from varying motives make change equally effectively in the world.
You can acknowledge and appreciate your donors by simply thanking them. Nothing encourages giving more than simple acts of thanking. Some effective ways of thanking donors include sending them shoutouts on social media, writing them personalized emails of gratitude, calling them to say thanks in brief telephone calls.
Also, donors, particularly the middle-class, educated and socially sensitized donor we have in mind, tends to respond better to stories than to statistics. When you write a donor pitch soliciting contributions to a crowdfunding campaign, tell your donor a story highlighting why your cause needs funding. Allow the donor to be moved by the hunger of the people in the story, or the abuse and discrimination they faced, or the fact that they cannot receive treatment for a life threatening illness. This creates scope for the donor to react to the story by making a donation.
Existing donors are often the best source of referring new donors from similar socioeconomic groups. New donors can also effectively be recruited at the New Year (including community and religious New Year’s), birthdays, and anniversaries, when many people want to start a new chapter in their lives with a noble act. Monthly giving schemes and matching fund plans for chosen causes or even specific projects can go a long way in engendering donor participation in crowdfunding endeavors in India, and bring positive change to her people and communities.
Crowdfunding is set to become a long term sustainable solution to address many of our country’s problems. Enhanced donor participation via crowdfunding platforms will help accelerate the progress of our country.
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