Posted on November 8, 2015 By iPledg With 0 comments

Crowd Funding – No Small Change When It Comes to Social Funding

iPledg - Logo - Low-ResolutionMention the word “Entrepreneur” and people immediately think of words like profit, performance, return and dividend. But when it comes to social entrepreneurship, we move into new ground, that of broader cultural, social, and environmental outcomes. Profit may still be associated with such ventures, but profit is a mechanism to sustainability rather than the main focus which instead is aimed toward the greater good. And those supporting such initiatives do so not out of greed (what’s in it for me), but out of a shared passion for the cause or the outcome it will deliver.

Social entrepreneurship operates on a focus shifted from maximising profits for shareholder returns, to the pursuit of solving social problems. Typically there are four key categories of social entrepreneurship:- community-based enterprises, socially responsible enterprises, social services industry professionals, and socio-economic enterprises.

Community-based enterprises bring together a community, and focus its culture and resources to drive toward their desired outcome. Socially responsible enterprises aim to create legacy projects, that offer sustainable development directed mostly on societal gains. Social service industry professionals are those who work specifically in the sector of social services to develop and build on the social capital of their chosen individual, community, or organisation.  Socio-economic enterprises refers to companies with an awareness of their Triple Bottom Line, and direct some of their revenue and profits towards implementing social change, be it empowering change-makers, mentoring, strengthening existing projects and assisting with further capital raising.

The concept is not something new to the social or economic landscape. Back in the mid 1800s, Florence Nightingale demonstrated the concept when she not only documented the need for change in hospitals where high death rates were occurring, she drafted the change plan, and organised numerous fund raisers to source the capital to implement her recommendations. She engaged the nursing community by reassigning tasks to the most capable and passionate supporters of the cause, uniting them and focussing them as a community to deliver a beneficial outcome to the cause about which they felt so strongly.

In recent years, initiatives of a social entrepreneurial nature have been significantly assisted by the reach of the internet and the emergence of crowd funding which, in the words of Wikipedia, allows for “the collective cooperation, attention and trust by people who pool their money and other resources together, usually by the internet, to support efforts initiated by other people or organisations”. In effect, social entrepreneurs are now able to embrace a greater following and raise the required funding through crowd funding.

Once such example was the project Tackling Child Labour on Indian Stone Quarries Through the Construction of Residential Schools. Having identified that children living on stone quarries belonged to one of the most disadvantaged groups in India, the initiators of this project recognised the approval given by the Indian Government to Santulan to develop residential schools, and decided to crowd fund the additional costs needed to cover basic furnishings such as study desks, chairs, beds and linen. In appreciation of the selfless work Santulan does in pursuit of social justice for some of the most marginalised communities in Indian society, this group sought to raise $15,000 on crowd funding platform, iPledg. Their 90 day campaign exceeded their $15,000 target, with the campaign raising $26,790, all of which was allocated to the works of Santulan.

The benefits of social entrepreneurism are obvious, but the devil lurks in the inevitable detail. Whilst most social entrepreneurs are well meaning, their skills may be questionable, especially in the areas of sustainability, engagement, and scaling. In addition, both the skilled and less adept initiator will come up against the policymakers who often do not fully understand social initiatives, which can lead to the project stagnating or stalling completely. Policymakers often do not share the same passion as the social entrepreneur, with their priorities being more around mitigating risk and avoiding political repercussions, so the meeting of the two minds requires some highly skilled massaging of the differing agendas. And once underway, longer term sustainability of projects can be compromised by the entrepreneur confusing “not for profit” with “not profitable”, thus running out of funding requiring to maintain momentum or retain knowledge and resources.

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