Why young upstarts should collaborate with crowdfunding platforms

By @chelean on
crowdfunding
Crowdfunding has evolved from merely about raising funds for startups and projects to raise funds for NGOs and their causes. Creative Commons

Crowdfunding is commonly used to raise funds for business ventures, projects or even to raise capital for young upstarts. But it has evolved into something more than that — people can now raise funds for personal reasons, but most importantly, it has become a way to raise money for certain causes.

Crowdfunding for a cause

Several crowdfunding platforms have pivoted from being just a mere platform to a community that connects people and businesses to non-government organisations (NGO) that advocate certain causes.

These crowdfunding platforms allow these NGOs to reach a wider audience in order to reach their funding target. And aside from putting the campaigns into their platforms, these companies also provide marketing and public relations services, whether these services are free or not.

How do upstart companies use crowdfunding platforms to support causes?

People usually here upstart companies use crowdfunding for a different reason — for raising capital. But as crowdfunding business models evolve, they can now be used to boost the corporate social responsibility (CSR) of most companies, particularly upstarts and small- to medium enterprises (SME) that have limited resources for these types of initiatives . Unlike bigger corporations that can fund a whole department dedicated to CSR, upstarts and SMEs can partner up with these crowdfunding platforms and be able to support certain causes.

Advantages of partnering with crowdfunding platforms to young upstarts

1. It does not require a lot of money

Collaborating with crowdfunding platforms as their corporate contributor. This usually does not require a lot of resources as the services made for NGOs and their campaigns come directly from the crowdfunding companies themselves.

Since the contributions are limited, you should make sure that you collaborate with crowdfunding companies that actually create an impact despite the overhead costs. One example of a company that is passionate about solving the challenges of overhead costs is Exponential, Inc. (XPO2). It is a cause-related marketing firm that helps small- to mid-sized NGOs raise fund for their causes. It provides free marketing and PR services so these NGOs will not have to spend a portion of what they collected for these expenses.

2. It is a great way to establish your brand

Nowadays, most people consider being responsible consumers. In the US, consumers usually support companies that make efforts to be socially responsible. These consumers are also open to boycotting companies that do not align with their beliefs as well.

For upstart and smaller companies, it is important to establish your brand in the right way. One example of a successful, socially responsible startup is Bowtie Behavior, which donates 10 percent of every purchase of its product to Alliance Girls’ High School in Kenya.

3. You are able to create an impact on communities that are practically unreachable

As mentioned, companies like XPO2 support small- to mid-sized NGOs. The causes of these NGOs are usually niched, involving specific communities with specific kinds of need. This also means that these causes are often overlooked by bigger organisations, which is why these NGOs need more attention.

4. You can choose the causes they want to support

Crowdfunding platforms usually host several NGOs with various causes — from education, hunger and health to the environment, animal rights, and culture. You can support the campaigns that resonate with your brand. It would be more convenient for you to support these campaigns given that the nature of your business could be related to their needs. As for the branding, having supported causes that are related to your business could help potential customers or clients recognise your brand easily.

Young startups do not have to invest big to establish that they are socially responsible. You should allocate your resources to plans that involve scaling or expansion. But this does not mean you can’t still do good —collaborating with crowdfunding platforms allow you to create impact without spending too much.

IBT Australia does not endorse any product or practice mentioned here. The article is based on press releases sent for consideration.

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