Crowdfunding & The Non-Profit Community

 

Organizations such as Social Venture Partners (SVP), a network of 2,300 individual philanthropic investors across the United States, Canada and Japan, make tireless progress toward their mission of making the greatest impact possible on the most deeply entrenched social issues. These individual “do-gooders” are driven by a desire to engage in active philanthropy and are focused on transforming not only society but also themselves and how they embrace philanthropy. A typical SVP member organization is made up of 50 – 100 partners who contribute both financially as well as their time and expertise to work shoulder-to-shoulder with local nonprofits to help strengthen the capacity building components of these organizations so that they can execute on the programs and services that address the most pressing social issues. As an organization, SVP has invested over $4.6 million in almost 525 nonprofits to date.

In today’s challenging economic environment cuts in grants and tax credits have forced nonprofits to seek out creative new sources for funding and expand their network of potential donors and supporters of their mission-critical activities. Enter crowdfunding: an innovative and revolutionary platform to raise capital via the web that is lowering the barriers for small investors and paving the way for individuals to invest in the organizations with whom they have a personal connection. It is a known fact that the decision to invest in small businesses is not just about the concept, but also about the people in whom you are investing. Recent changes in securities laws, under the JOBS Act, will provide opportunities to invest in small businesses and early-stage start ups to would- be investors motivated to fund organizations that they believe in.

And this could mean a whole new platform for investing in nonprofit organizations and community-centric projects. Crowdfunding promotes investing in local businesses where communities of people and existing relationships meet with the common goal of building stronger local economies. This is about connecting people and their communities through typically small donations for organizations who would otherwise have to wait for support from traditional funders such as government, banks and other funding bodies. Crowdfundraising offers an innovative approach to funding nonprofit programs and enables fundraisers to enhance and expand their fundraising reach. Crowdfundraising places the power into the hands of the individual, who, by tapping into their network through myriad social networking platforms, can promote their personal projects. Not only are they raising money but they are also raising awareness exponentially of the causes they believe in.

The nonprofit community is fortunate to have organizations such as SVP who are steadfast in their efforts to partner with socially conscious investors with local projects to strengthen their communities one nonprofit at a time. While traditional fundraising efforts and innovative engaged philanthropy such as SVP’s model are essential, in today’s tough economic environment we can hopefully look toward crowdfund-raising to offer a 21st century alternative that will reach today’s hands-on, highly networked legion of philanthropically-minded young investors who are poised to make this generation’s impact on the most pressing social concerns.

 

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