by Brendan Cook
Take a second and consider what the following things have in common:
- A documentary on the decline of the honeybee
- Bamboo bicycle frames
- Mapping green sea turtle routes
- A solar powered backpack
- A rooftop edible garden
If you’re still stumped, these ideas are now budding projects that are currently being funded by amateur donors and investors. The method is called Crowdfunding; think of it as asking friends, family and (frequently) total strangers to give a cause that much-needed financial boost. Crowdfunding enables new projects to take off by connecting with audiences who support their idea, but these funders may not necessarily be dishing out million-dollar grants. Since sustainable ideas tend to mobilize some passionate action, a variety of projects are happening through these nontraditional means.
Many of these sustainable projects require less than $15,000 and in many cases have tens, sometimes hundreds of individual funders for their single cause. Crowdfunding has become a popular way for sustainable projects to get traction and have their stories told, ranging from a whole host of films to small-scale renewable energy systems.
The platforms not only allow for a convenient way to raise funds, but just as importantly connect with an audience and involve them in your cause, something that is difficult to do with few investors. Crowdfunding taps into that urge to give someone a leg up in the world while championing our individual beliefs. Some of the funders bank on a “reward” system, which is a way to increase the amount of money donated or payback a financier’s generosity. A kind donor might receive a DVD of the film he’s supporting or a mention on Twitter. For many of the people and projects, the donation is considered its own reward. Often, most are not expecting any kind of reward. In some instances, extended action in the form of volunteers, media attention, or a like-minded friend rooting for your project can develop after that $25. IndieGoGo, a broad crowdfunding site recognizes this instantly in their advice on starting up a campaign:
“Contributors fund ideas they’re passionate about and support people they trust. Introduce yourself and your background. Describe your project and why it’s important to you. Explain to contributors what you’re hoping to achieve. Keep it concise, yet personal.”
As funding becomes more focused and limited, it requires us to prioritize issues and can hinder creativity. Crowdfunding gives fresh, creative ideas a chance, as long as their creator is able to tell a story. Causes related to sustainability frequently sell themselves, but after looking around on the sites, you may be impressed by the funding results from more “challenging” ideas.
Think your concept is too technical? PetriDish, one of the more focused sites, explains that “Professional researchers use our platform to increase awareness about their work, raise money for new projects and manage relationships with private donors.” Here the money aspect is only part of the equation (although a critical one) but what these sites encourage is ongoing relationships with “donors.” Many continue to update and tell their story of success and challenges through photos, videos, blogs, and other methods.
These crowdfunding sites have caught on so quickly that federal legislation and large-scale capital investors are looking at how Crowdfunding will fit into their future plans and what guidelines will need to be set in place. In a rocky economy, sustainability-oriented startups will be looking for non-traditional ways of raising money when competition increases and funds become scarce. These first time funders not only provide the capital, but the foundation of an audience for their projects. What better way to tell a story than from the beginning?
Brendan Cook is an analyst with Green-e Marketplace and believes many hands can make change. He can be reached at brendan [at] resource-solutions.org