Source: NGOCN July 24, 2015
Recende Center on Fund-raising （瑞森德筹款研究中心） recently published a report on philanthropic crowd-funding, which they claimed to be the first of its kind in China. According to the report, philanthropic crowd-funding, in a broad sense, includes raising funds through internet or social media platforms. The main difference between philanthropic crowd-funding and commercial crowdfunding is that the former aims to solve social problems while the latter only focuses on capital return. But business mindset can be used to design philanthropic crowd-funding products. For example, the target group can be young people who are willing to pay for innovative projects rather than just charity enthusiasts, or the project should concentrate on advertising and the process be more open and accessible.
As to statistics, the report says 164 successful philanthropic crowd-funding projects had raised over 6.69 million through online platforms up until August 2014. The report also points out the problems China’s philanthropic crowd-funding now faces. Firstly, the industry has a relatively low entry level and loose requirements for those who want to start a fundraising project, and many philanthropic crowd-funding platforms lack expertise to supervise and manage crowd-funding projects, which would in turn create trust issues or even serious legal problems. Also, the commonly applied rule of philanthropic crowd-funding – “all or nothing” ( if a campaign cannot reach the target goal, related NGOs will receive none of the money people already committed) – could bring high opportunity costs for NGOs.
In response to the questions and challenges, Recende Center has three suggestions: Firstly, lower the threshold, and encourage more public participation; Secondly, higher requirements for the NGOs involved, including the ability to create more attractive and innovative fund-raising projects and the ability to better use social media; Thirdly, conceptual or visionary projects are more suitable for crowd-fundraising since the influence effect of philanthropic crowd-funding is usually higher than the material return. Considering the current restrictions and risks in philanthropic crowd-funding, Recende Center also stresses that NGOs should be more careful and fully evaluate the situation before acting.