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CROWD MODEL FOR SOCIAL CAUSE :CROWDFUNDING FOR VOLUNTEERISM
“NATIONAL PREPAREDNESS MONTH”
YSS – MDEC - JPAM
17 Oct 2015
Multimedia Development Corporation
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CROWD PARTICIPATION FOR SOCIAL GOOD
Crowd participation and contribution for social causes
can be augmented with digital technology
World Giving Index measures:
1. Monetary donations
2. Time allocated for social causes; and
3. Help offered to strangers
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HOW DO MALAYSIAN RAISE FUND FOR SOCIAL CAUSES
• Fundraising Events
• Donation Boxes
• Social Media
• MSM
• Government-Initiated SMS Drive
Traditional Way
Digital Way
Crowd Perspective
• No Validation
• No Transparency
• No Information on
Target Amount Reached
There are cases of fraudulent
donation drive reported, leaving
the big hearted skeptical
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TAPPING THE POWER OF THE CROWD
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Social Crowdfunding Platform
IMPROVING MALAYSIA’S REAL RANKING
Greater Transparency
on fund utilisation &
impact
Tax-
Deductible
Platform
Facilitate NGOs to raise
funding
Trusted crowdfunding
Platform
In the pipeline….
DM Objective: Facilitate community’s contribution towards social cause, via ICT
enabled platforms that support deployment of programs/activities
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SOCIAL CROWDFUNDING
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CROWDFUNDING MODELS
5 basic crowdfunding models but hybrid are forming
• Donations: Crowdfunders donate money to campaign owners and do not expect to
receive a tangible benefit from the transaction
• Rewards: Crowdfunders support campaign owners and receive some kind of reward
in return for their contribution
• Equity: Crowdfunders invest in campaign owners and receive equity or equity-like
shares in return for their investment
• Lending: Crowdfunders lend money to campaign owners and expect the future
repayment of a principal with or without interest
• Royalty: Crowdfunders invest in campaign owners and receive a share of revenue
earned in return for their investment
CROWDFUNDING IS AN ONLINE DISTRIBUTED MODEL FOR
CAPITAL FORMATION
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GLOBAL TREND:
CROWDFUNDING NEARLY TRIPLED IN 2014
A disruptive shift as companies, NGOs & individuals raised USD16.2B in 2014
compared to USD6.1B in 2013, with approximately 20% for Social Causes
Funding for Social Causes is the 2nd
highest after Business
The volume funded for
Social Causes
worldwide rose 2.5 fold
from USD1.22B in 2013
to USD3.05B in 2014
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THE QUICKEST IN GAINING POPULARITY HAS BEEN
DONATION-BASED CROWDFUNDING
Source: Crowdsourcing.org 2012
Donation-based is the most active
crowdfunding segments in 2012
Un-regulated
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CROWDFUNDING IS THE NEW TOOL OF SOCIAL SECTOR
Prevalent examples
of social project
• Disaster relief /
humanitarian
• Food for the poor
• Education
• Restoration of
facilities / infra
serving low
income group
• Fighting Disease
Cases built by NGOs, Community
100% Crowdfunded
X% Crowd funded
Y% CSR
X% Crowd funded
Y% Grant
Combining traditional
funding sources with
crowdfunding
Key Advantages of
Crowdfunding
Lower fund raising cost more fund goes to
the intended cause
Projects validated by
community
Better transparency on
fund utilisation
Greater speed of
delivery …many more
Crowdfunding in general and social crowdfunding is still in
its early stage in Malaysia
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CROWDFUNDING INITIATIVES
FOR
MALAYSIAN NGO
KICKSTARTING
SOCIAL CROWDFUNDING
IN MALAYSIA
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GIVE.MY – THE STRATEGY
12 Education Projects
RM44k Donated in
aprox 1 month
Range RM10 – RM2,500
1,500 Students
Impacted
Supported by Social
Entrepreneur,
Educationist, Internet
Entrepreneur
Building an ecosystem for crowdfunding by focusing on a
community of donors based on their interest, firstly the
education sector
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SUPPORT A LIVE EDUCATION PROJECT :
“FUND A SOCIAL SCIENCE ROOM TO SPARK CHANGE”
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CROWDFUNDING INITIATIVES
FOR
MALAYSIAN NGO
CROWDFUNDING INITIATIVES
FOR
MALAYSIAN NGO
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CROWDFUNDING IS THE NEW TOOL OF SOCIAL SECTOR
Prevalent examples
of social project
• Disaster relief /
humanitarian
• Food for the poor
• Education
• Restoration of
facilities / infra
serving low
income group
• Fighting Disease
Cases built by NGOs, Community
100% Crowdfunded
X% Crowd funded
Y% CSR
X% Crowd funded
Y% Grant
Combining traditional
funding sources with
crowdfunding
Key Advantages of
Crowdfunding
Lower fund raising cost more fund goes to
the intended cause
Projects validated by
community
Better transparency on
fund utilisation
Greater speed of
delivery …many more
Crowdfunding in general and social crowdfunding is still in
its early stage in Malaysia
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Social Crowdfunding Platform
COLLABORATIVE PROGRAM
Greater Transparency
on fund
utilisation & impact
Tax-
Deductible
Platform
Facilitate NGOs to raise
funding
Trusted crowdfunding
Platform
SMS donation as a payment
gateway
Branding for Social
Crowdfunding Platform / NGOs
/ Projects
Policy on % of
CSR funding to be channeled
through crowdfunding
In the pipeline….
Building an ecosystem for Crowdfunding : NGOs, Corporations, Crowdfunding
Platform, Government Agencies collaborate to build a community of donors
Suggestions ….
Mobile Enabled
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THE APPROACH : A PILOT PROGRAM
#1 Day Program
Briefing for 7 hours
(50 NGOs per
session)
Program (will be
conducted in 2
session)
Equal to 100 NGOs
Adopt 10
from the list
for
crowdfunding
Give more
training
Invitation to
NGO’s on
this program
Monitor
progress
Awareness PitchIN
workshop
½ Day ½ Day
Hand-holding session
Crowdfunding
pitch
Hybrid = crowdfunding +
corporate funding
Facilitate the funding 2
Crowdfunding Training 1
Proof of work 3
FGD1 FGD2 FGD3
Develop guidelines to
execute, Modules to
fundraise including
basic governance,
communication plans
and tools required
Tools for
execution The Modules
NGOs with good governance &
branding
Funding raised
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BUILDING THE
CROWDFUNDING ECOSYSTEM IN MALAYSIA
CROWDFUNDING INITIATIVES
FOR
MALAYSIAN NGO O
Crowdfunding
Platform PitchIN.my,
SimplyGiving.com,
PeopleGiving.org,
mystartr
Project
Initiator NGOs, Activists,
Volunteers
Donors & /
Supporters : Individual & CSR
Government :
YSS, KPT,
ROS, MDeC
Crowd Funding 101
An alternative method of raising money
for a business, project or idea.
With crowd funding, an entrepreneur or a
project owner can attract a ‘crowd’ of
people to contribute towards an online
funding target.
What is Crowd Funding?
Kickstarter: A Film Project (highest # of backers)
Kickstarter: Pebble Watch
Current World Record!
Pebble Time – USD20,338,986
RM 85000
30 days
RM 87705
345 pitchers
TAPAUFEST
The Biggest Project to be Funded on pitchIN …..
•Highest in MY and SEA.
•First ever festival to be crowdfunded
in SEA and possibly Asia too
The Best Performing Social Community
Project on pitchIN
USD 3000
60 days
USD 3970
75 pitchers
Elements of a
CAMPAIGN
Page
ELEMENTS OF A CAMPAIGN PAGE
Campaigns with
PERSONAL VIDEO raise more than
105%
MORE
than those that don’t
Visitors are
22% MORE LIKELY
to donate to
campaigns that have
RAISED 40% of their goal
$
ELEMENTS OF A CAMPAIGN PAGE
Deadlines create
URGENCY and help
increase
% FUNDED
0
10
20
30
40
50
60
SHARING TOOLS
(conversion rate %)
ELEMENTS OF A CAMPAIGN PAGE
TELL YOUR
STORY
Campaigns
with an average
word count between
300-500
WORDS
raise the most
money
Explain
WHO
WHAT
WHY
Use pictures of people, children,
pets and projects
ELEMENTS OF A CAMPAIGN PAGE
REGULAR
UPDATES
Reward based funding
GREW 524%
43%
of crowdfunding
campaigns offer rewards
Campaigns
with regular
updates raise
126%
more than those
with
NO UPDATES
Stage 1 Stage 2
What are the key
criteria to be
successful in
crowd funding?
Possible Crowd Funding Timelines*
Crowdfunding Timeline
(Weeks)
1 2 3 4 5 6 7 8 9 10 11 12
Information Gathering
Preparation
Apply to Funding Portal
Identify & Work Your Network for Support
Contact Media and Work Social
Campaign
Campaign Live on
Funding Portal
“T *“To Equity Or Not To Equity” – Alixie Cormick
Start Before Launch
• Get your
community
ready
• Build the
excitement
Hit the ground running
• Some projects try to crowd fund far too soon, with little or no build up.
• People’s opinion of any project will be based at least in part by how well it’s been received by others, so if a lot of time has gone by with little or no money raised, then it will be seen as a vote of no confidence..
Prepare Your Crowd!
Do the legwork before you launch
• The crowd funding campaign should be your last push.
• Write a project blog, open Twitter and Facebook accounts and create teaser videos before your project goes LIVE.
• Do as much as you can to get your message out there and keep on updating people. Build momentum leading to it..
Enlist Your Army!
• Evangelists
• Your Interest
Groups
Know your customer/investor
• Get covered. Getting mentioned on the
right press can have a far bigger
impact.
• Focus efforts to reach the people who
are most likely to back your project.
Sell Your Project
Tell a compelling story
• Paint a picture of what it might be, document, tell a story. Let others know.
• Get people to know your project/business.
• Spend some time to do a high quality video.
Be Transparent
• Be open with
budgets/plans
• Don’t hide
information
Be open, honest and realistic
• People will want to know a lot about you and your business.
• Unless you have a pre-existing reputation as a successful entrepreneur, you must expect people to want to know more about you and your story.
• It’s important to remember that in many cases your backers will help out by providing their time or expertise – let them know how they can help.
Set goals
• Set a meaningful and realistic funding
goal, set it too high and you may never
reach it – set it too low and you won’t
create enough excitement or benefit
that much once funded.
Communicate
• Regular Updates
• Reachable
• Respond
Be prepared to work hard
• Not a shortcut to success, nor an easy
ride – it takes hard work. It’s not magic.
• Be prepared to keep promoting the
project to all your contacts, on your
social media accounts and in the media
too.
Summary
• Crowd Funding is a viable option for
entrepreneurs to raise funds, be it for a
project or an idea that needs validation
or a business that wishes to scale.
• A great source for validation with little
risks.
• Success is not guaranteed but
entrepreneurs will definitely learn.
