• Seeks to raise funds to make something very specific happen.
• Is all or nothing. If the target is not achieved within the stated time limit, then the venture gets nothing. This is because the task is to raise what is needed to get something done.
• Uses social networking tools to extend contacts from your own to those of your supporters, taking fundraising to the second degree.
• Assembles a crowd of supporters and encourages them to share the journey with the venture, providing an input of ideas, experience, contacts and energy. Supporters are urged to Give More, Find More and Do More.
• Provides attractive returns to supporters as an encouragement to giving support, but also to strengthen their understanding and commitment of the issues being addressed. There is a range of returns depending on the amount given.
Buzzbnk is one of a new generation of crowdfunding platforms and it aims to mobilise funds specifically for social ventures and enterprises. It has these special features:
• Ventures can raise loan finance as well as donations. For charities and social enterprises which are creating a stream of income from their work, a loan may often be more appropriate.
• Returns can be given in cash as well as in “engaging rewards” (product, opportunities, attendance at events, etc.). Cash returns can include a fixed rate of interest or a pre-determined share of future revenues. This offers a chance for supporters to invest rather than simply donate and to share in the success of the venture.
Why crowdfunding is relevant now:
• It is an enterprising solution to raising funds.
• It may be more appropriate for social enterprises, bringing a business mindset to resourcing and managing the social enterprise and building sustainable solutions.
• It brings a new approach. Rather than just taking the money, it creates a sense of co-venturing. The reciprocal obligation is a more complex relationship than just the traditional donor-beneficiary, and can be of great value in the longer term.
• It enables communities to mobilise support for the things they want to see happen, as investors in their own future. If they can raise some of the money for themselves, it makes them more fundable or more investible by others.
• It has the potential to mobilise new money at a time when traditional support is becoming less easily available.
• The energy and commitment that communities and social entrepreneurs can mobilise to assemble a crowd of supporters can be a good predicator of their eventual success.
Michael Norton, OBE, Director of CIVA, co-founder UnLtd, Chairman and Co-founder Buzzbnk