{"id":226,"date":"2017-08-17T10:43:06","date_gmt":"2017-08-17T10:43:06","guid":{"rendered":"https:\/\/idronline.org\/2020\/12\/23\/why-crowd-funding-is-important-for-philanthropy-to-support\/"},"modified":"2025-10-22T13:18:18","modified_gmt":"2025-10-22T07:48:18","slug":"why-crowd-funding-is-important-for-philanthropy-to-support","status":"publish","type":"post","link":"https:\/\/idronline.org\/kn-in\/why-crowd-funding-is-important-for-philanthropy-to-support\/","title":{"rendered":"Why crowdfunding is important for philanthropy to support"},"content":{"rendered":"

Sometime in 2013, Bill Gates said, “Philanthropy should be taking much bigger risks than business [and] if these are easy problems, business and government can come in and solve them.”<\/p>

Think risk<\/h3>

While most philanthropists agree with that sentiment, it does not necessarily reflect in their philosophy of giving nor in the way they manage risk for themselves and their portfolio.<\/p>

There are different kinds of risks involved in grant-making–financial, reputational, and impact. If donors are to see themselves as partners in change, then identifying and mitigating these risks must be central to the conversation.
\nAnd sustainability, resilience, and network-building are all critical and interlinked elements of this conversation.<\/p>

\"What<\/a><\/div>

Think sustainability–a bit differently though<\/h3>

Every donor is concerned with the sustainability and longevity of the work they fund. Likewise, for nonprofits, expanding their donor base is a priority.<\/p>

The traditional approach has been to target a few high value donors rather than build a network of many small donors<\/a>. And understandably so. The effort and capacity required to do the latter is very different from what is required to unlock institutional or philanthropic capital.<\/p>

Nonprofits must actively diversify their funding bases and look beyond ‘large’ ticket sizes.<\/p><\/blockquote>

While this might be seen as a choice or a trade-off, we believe that this is better understood as a continuum that nonprofits ought to progress along and something that philanthropy ought to acknowledge, support and accelerate.<\/p>

Funds from foundations, corporates and high net worth individuals will continue to feature as substantial components of an organisation’s budget. But we also believe that nonprofits must actively diversify their funding bases and look beyond ‘large’ ticket sizes.<\/p>

Advantage crowdfunding<\/h3>

An increasingly popular yet under-utilised model is one that leverages crowdfunding<\/a>.  There are multiple approaches to crowdfunding<\/a> from creating one’s own giving platform as Pratham Books<\/a> did with Donate-A-Book<\/em>, to utilising existing platforms like Bitgiving<\/a> and Ketto<\/a>.<\/p>

\"donate<\/a><\/div>

This idea, of creating a large network of small donors via a platform, is one we think has tremendous possibility and lends value to an organisation beyond just fundraising.<\/p>

\"crowd<\/p>

It de-risks the model
\n<\/strong>A diversified portfolio that balances foundation and crowdfunded support offers nonprofits in your portfolio resilience of two kinds.<\/p>