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“It is in giving that we receive” said Francis of Assisi. The joy of giving is the essence of philanthropy and crowdfunding has been influential in promoting philanthropy among citizens. The term crowdfunding was first coined in the year 2006 when Michael Sullivan, an entrepreneur was looking for patrons to help fund his video-blog project. However, crowdfunding as a concept dates to the days of Reliance industries founder, Dhirubhai Ambani. His small yet growing textile business was crowdfunded by communities across Gujarat. Ever since then, crowdfunding as a platform has gained momentum and is now popular among start-ups and small entrepreneurs.
Crowdfunding is the practice of funding a project or venture by raising small amounts of money from the masses, typically via the Internet. Initially, fundraising was a traditional offline way of raising funds, for instance, musicians would publicly ask their fans to fund a new album or tour. The arrival of crowdfunding became the extension of fundraising with the ‘online’ aspect and the social media support of campaign sharing. Projects differ widely, from art initiatives to technological gadgets to humanitarian causes. There have been several instances when civilians joined hands to mend the disasters that were brought upon by natural disasters. The petrifying earthquake that hit Nepal in 2015, not only caused massive destruction but left the people in a state of hopelessness. However, the hope rekindled when thousands of people volunteered to donated relief in the form of food, first aid necessities, clothing, shelter and ration.
Crowdfunding is slowly becoming an alternative funding channel for the film industry. This shift is also contributed by the admiration of Indie films in India. Independent (Indie) films like “I AM”, “Placebo” and “Greater elephant” were crowdfunded as the innovative stories appealed to the society.
Crowdfunding has become an increasingly popular alternative to regular financing since now the internet has grown into a global family and every member is connected to the other at virtually no cost. The vision of crowdfunding is to harness the power of the crowd to fund small ventures, projects that are unlikely to get funded by traditional means. Aditya Iyer raised $14,000 for his book, “The Great Indian Obsession”, which talks about India’s obsession with engineering and how India produces more engineers annually than the population of Iceland. The internet found the content highly relatable and was willing to be a part of its journey and growth.
Public-spiritedness is the essence of crowdfunding and it gives you an opportunity to invest in an idea that fascinates you to an extent that you are prepared to bear the risk that comes with it. It is a promising field for financing high-risk innovative projects. It is an effective platform for start-ups to raise money needed for the development of their brainchild. The investors may also include ordinary citizens who wish to support this idea and contribute to its implementation. In return the investors might get access to the first version of product along with bragging rights! Fundraisers are the catalysts of change. “Shashan” -The political board game, edible cutlery, sports competition for the under privileged are few among the scores of crowdfunded products and services backed by fundraisers.
Another reason for the growth of crowdfunding as a source of finance is Corporate social responsibility. Ccompanies are now looking to fund their social initiatives by means of crowdfunding, in this way they strategize to grow their brand image while also giving back to the society. Crowdfunding a CSR project is not just used to raise funds but also to create awareness about the cause and to build an audience for it.
Shaadi.com introduced a CSR project for the widows of URI martyrs under the banner of “Shaadi Cares” The aim was to empower the wives of those 18 “Shaheed Jawans” who were also the sole bread earners of their respective families. They aspired to support these women to move forward with a strong backing! They were successful in raising Rs.18,88,060 via crowdfunding for these women. Crowdfunding such social initiatives is a win-win situation since it not only gives corporates social branding but also provides the social cause with a bigger stage to voice their quest and ask for help! Crowdfunding these campaigns also allows more people to feel connected to the brand because they know where and how the funds will be used.
India, a youth-driven nation, is at a seam of enthusing times and is constantly evolving. Under a proper regulatory environment, crowdfunding has the potential to help catalyze existing efforts to create entrepreneurial cultures and ecosystems while also creating a larger platform for supporting a good cause. Impact Guru, Rang de, Kickstarter, Wishberry, Ketto are few among the many platforms in India which have steered the crowdfunding to become a 300-crore industry in India. Crowdfunding, in its spirit, is a means to promote philanthropy and the growing industry is likely to create a generation of united, munificent, open-hearted members of the global society.
According to the Statista reports,