A growing number of organisations are getting their own crowdfunding platform in order to engage and empower their “crowd” of customers, members, citizens etc. This survey shows that over 20 % of European crowdfunding platforms belong to organisations - and that this fraction is growing.
In a world with more offers and shorter attention spans than ever before, a crowdfunding platform is a fantastic way for organisations to offer value to their crowd and keep them wanting to come back for more. At the same time, organisations can use a crowdfunding platform to improve their brand, become more visible on the Web, obtain interesting data on user behaviour and even make money from fees on the platform.
Crowdfunding platforms for different sectors
There are many different ways for organisations to use a crowdfunding platform; it depends on the organisation and its sector. Examples include:
Financial institutions --- Customers fund each other
Cities --- Locals fund parks, playgrounds, local events, culture projects etc.
Large corporations --- Suppliers test new products on the corporation’s customers
Universities --- Alumni fund university startups, research projects, campus projects and individual students
Umbrella organisations --- Member organisations and their members raise money for different projects
Unions and trade associations --- Members support projects within their industry
Cooperatives --- Members support projects from fellow members
Utility companies --- Users fund supplier projects (e.g. solar or wind farms) and receive utility in return
Sports --- Fans and supporters sponsor their clubs and athletes
Entertainment --- Consumbers sponsor television productions or movies
Music --- Fans sponsor concerts, tours, album recordings etc.
NGOs and charities --- Members and non-members support specific projects
In future articles, I will look into some of these sectors and examine concrete examples of how crowdfunding is being used.
Case: Coop Crowdfunding
Coop is a large Danish co-operative of supermarkets with sister organisations in many other European countries. In April 2017 they launched Coop Crowdfunding - a crowdfunding platform where food projects can get funding from Coop’s 1.7 million members. For example, the Danish wine producer, Dyrehøj Vingaard, received DKK 129,850 to buy equipment for the production of a new line of sparkling wines. In return, backers received wines, ciders, liquor, a wine tasting event or a tour of the estate, depending on the size of their contribution. I personally bought a combined tour and wine tasting and turned it into a small family excursion. It was great: we even got a free schnapps tasting on top of everything else, and I was very happy that I didn’t have to be the one driving home that day.
Coop Crowdfunding is mostly used for reward projects, where backers receive products in return for their money, but it also has loan projects where backers get their money back with interest.
For food producers Coop Crowdfunding is great news as it is not only a new source of funding, but also a way to get access to Coop’s customers and sell new products before they have even been produced. For Coop’s members the platform is also great as it gives them access to a lot of exciting food products that cannot be found on the shelves of any supermarket. It is a fun and meaningful way to contribute to the Danish food scene.
Finally, Coop is proud to be able to say that they are helping Danish food projects become reality. It's great PR. I certainly haven’t heard them complain about the 500+ press mentions the platform has had since its launch...
Crowdfunding platform as a service
With over 1,200 stores, 38,000 employees and an annual turnover of almost €7 billion, Coop is one of Denmark’s largest companies. Their IT department is 20 times the size of Smallbrooks, but nonetheless they asked Smallbrooks to build Coop Crowdfunding for them. After all, there is no reason to re-invent the wheel…
Smallbrooks offers "crowdfunding platform as a service", which makes it fast, easy and affordable for everyone to get their own crowdfunding platform. Our system is extremely flexible and therefore particularly useful for organisations, because they need a system that can adapt to their existing crowd (of users, customers, members etc.), context (language, country, currency, rules and regulations etc.) and IT systems.