USA Uses It; WHO Needs Help From It; What Is Crowdfunding?

By: Hitesh & Chiara

Published On: February 05, 2021

Crowdfunding has been an integral part of our society, for a long time. A group of people donating a little of what they have, towards a cause bigger than themselves; there’s an inherent sense of humanity and compassion in it. However, as digital crowdfunding becomes more and more important, the legality and safety of crowdfunding has come into focus. As an alternate financing option though, there is perhaps no match for crowdfunding. And now, even governments have begun using it!


1. United Kingdom


The Future Fund here was set up to support small private ventures, which were at risk of closing down due to the pandemic. Equity crowdfunding was also part of this; the government would provide matched funding to a venture, provided private investors had crowdfunded a certain amount or more in such ventures. This has been of special help to ventures which have no financial support or profits but have innovative solutions for the pandemic and resultant crises.

Note: equity crowdfunding is not legal in India



2. United States of America


On the other side of the Atlantic, equity crowdfunding has also had a welcome side-effect: anecdotal evidence has found that crowdfunding has particularly helped women and minorities-led ventures. The government here has also set up a Main Street Co-Investment Fund. Similar to the UK, there will be matching contributions from the government to help keep small businesses running. 

Note: equity crowdfunding is not legal in India


3. Zimbabwe


Facing a cholera outbreak - which claimed the lives of 25 citizens - Zimbabwe launched an emergency crowdfunding campaign. With the help of aid agencies and private corporations, the government was able to raise $29 million. The public health crisis, which could have become worse, was controlled in time.


4. World Economic Forum



One of the world’s leading non-governmental organizations, the World Economic Forum noted the effect of crowdfunding, especially in wildlife conservation. In essence, crowdfunding helped connect the countries who needed such conservation projects and the countries willing to donate. Online fundraising could also finance innovative solutions in the conservation space; The lasting impact of crowdfunding was not in the money though; it was in how it helped spur global conversations about regional conservation issues; otherwise, how else would the rest of the world help save the last remaining orange-bellied parrots remaining in Papua New Guinea?.


5. World Health Organization


These have been unprecedented times; faced with a crisis like no other, the World Health Organization took an unprecedented step: crowdfunding! The COVID Solidarity Response Fund was set up to ensure prevention, detection and timely response to the pandemic and its effects. Donors to the fund included Facebook and FIFA; it reportedly raised $71 million in 10 days. Already, the funds have been deployed in the field: in Ghana, it helped continue the polio immunization drive, but now with sanitizers and masks. In Uttar Pradesh, it helped in contact tracing. In the Philippines, it helped set up surveillance systems for detecting cases. 

  

As you can see, governments and leading intergovernmental organizations have used crowdfunding to help set up businesses, conserve our planet, and save people’s lives. And these are still early days; online fundraising’s potential is truly limitless. In what other ways do you think crowdfunding can be used? Talk to us, and let us know!




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