When my Co-founder Mark Courtney and I set out to build 121Giving, our intent was to build a crowdfunding platform that would eliminate inefficient fundraising practices, while giving nonprofit organizations a powerful tool to enlist support from cause-minded companies and make it incredibly easy for individual donors to support their campaigns with complete transparency into where their funds were going. We looked at how for-profit companies were using technology, including online crowdfunding, to improve operational efficiencies and built those practices into our product with the goal of bringing together companies, charities and consumers to help solve today’s social issues.
An early supporter of ours – and a crowdfunding pioneer, Dr. Richard Swart (who’s the Crowdfunding and Alternative Finance Researcher and Scholar-in-Residence in the Institute for Business and Social Impact at the University of California, Berkeley), invited us to contribute a chapter about crowdfunding in his book, Crowdfunding: The Corporate Era, co-authored by two other crowdfunding experts Dan Marom and Kevin Berg Grell.
Our contribution to the book examines the evolution of Corporate Social Responsibility (CSR) and proposes new ways of thinking for nonprofit and for-profit businesses alike – ways that challenge executives to engage consumers and donors, drive brand loyalty and bolster long-term business models.
Without doing a spoiler alert, here’s a brief summary of what you can expect to learn about:
Compelling Corporations (and) Consumers to Take Action: How New Approaches to Crowdfunding are Changing the Face of CSR and Emotional Loyalty.
The allure of crowdfunding is that it transcends its own primary mechanism of raising capital for entrepreneurs. It’s a robust vehicle for sales, marketing, and a host of functions essential to any business’ survival – and an alternative pathway to raising finance when traditional routes don’t or won’t work.
The book examines how innovative multinational corporations use crowdfunding to fuel their operations, and it spells out how businesses of just about any size can benefit, including nonprofits and social enterprises.
Consumers demand responsibility, transparency
Studies show that the majority of consumers want to do business with companies that are serious about social responsibility and who demonstrate their commitment in day-to-day operations. As a result, experts predict that major brands will soon spend more money on cause marketing (and their CSR efforts), than on their own advertising campaigns.
We suggest that companies launch longer-term initiatives. Why? Because short-term plans tend to leave customers without options for giving to causes they care about and skeptical of the authenticity of future philanthropic intentions. These campaigns are also much harder to measure.
There’s also a disconnect between crowdfunding and company responsibility. To get on board, several strategies can help companies capitalize on the evolution of crowdfunding as a way to create emotional loyalty with customers.
All of this new thinking is in response to a seismic shift in how and why donors give: Consumers want to see a transparent and consistent commitment from companies they support with their checkbooks, and will favor those that take bottom-line risks in their CSR initiatives.
In other words, companies that meet consumer demand, by operationalizing their good and engaging customers in giving with them to important causes, are being rewarded with both emotional and financial loyalty.
The book brings a fresh perspective to what’s possible through crowdfunding – and we’re thrilled to be a part of this movement. You can get a copy of Crowdfunding: The Corporate Era through Amazon.com or contact us directly at info@121Giving.com if you want to learn more about what we’re doing at 121Giving.