A few years ago, Amit Onkar, a fashion technology student from Chennai, met with a terrible accident. A truck hit him when he was crossing a road, leaving him with severe brain haemorrhage. Doctors at the Columbia Asia Hospital, Bengaluru, where he was rushed, told his relatives that his survival chances were minimal unless an emergency surgery was done on him, which would cost a whopping Rs 20 lakh.
Amit’s middle class family didn’t have such a hefty sum. It was then the boy’s close friend Albin Jose thought of raising some money through crowdfunding. Albin quickly ran a campaign on a crowdfunding portal Ketto, detailing Amit’s plight. Within a few days, the campaign got backing from 800 donors and raised about Rs 10 lakh. “That’s what happens when the crowd comes together to do some good,” says Albin with a smile of satisfaction.
Albin is not alone. Many individuals and NGOs are now taking the crowdfunding route for fundraising, especially for medical treatment, education of underprivileged children, women’s empowerment or for community development projects. “As a concept, crowdfunding has started getting acceptance in India over the last two years. And this has kickstarted a new wave in philanthropy,” says Ishita Anand, CEO, BitGiving, a Delhi-based crowdfunding platform.
Crowdfunding sources relatively smaller sums of money from general public, instead of relying on heavy contributions from a few high net-worth individuals (HNI) or a huge grant from an agency. Actually, the concept is not new; in olden times people used to gather in villages and towns to collect money to help each other. Now, with the advent of modern technology, mainly the internet and its online platforms, the idea of crowdfunding is witnessing a revolution.
Now the online platform acts as a mediator between the contributor and the receiver. “A lot of potential is out there in people whose ticket size ranges from Rs 100 to 10,000, not just the HNIs. Crowdfunding taps these donors,” says Ishita. More than a dozen crowdfunding platforms such as Milaap, Ketto, FundDreamsIndia, BitGiving and LetzChange are available in India currently for social causes. “The beauty is that just by sitting at your home or office, and with the help of your social media contacts, you can raise huge sums,” says Rahul Chovva, CEO and Director of LetzChange.
According to Crowdfunding Research firm Massolution, globally, the industry has grown from $6.1 billion in 2013 to $34 billion in 2015. Of this, a huge amount goes to charity funding. A report by the World Bank says that the industry will touch $93 billion by 2025. Market experts say that crowdfunding is growing more than 100 per cent (year-on-year) in India. A report from Charity Aid Foundation (CAF) India says that 20 per cent of all giving in the country will occur online within two years and 50 per cent within 10 years.
“Crowdfunding for philanthropy is very common in western countries. However, the concept is just emerging in India. Post demonetisation and with the digital India initiatives of the Government, there is a huge surge in digital payment platforms. This is reflecting in online donations to charities as well,” says Chovva.
Today, the majority of the crowdfunding contributors are youngsters. “Online crowdfunding platforms are attracting the younger generation to charity. Almost 90 per cent of our donors are in the age group of 20–35 years,” says Ishita. Donations here are easier to track and the process is transparent. “Our donors usually look at specific projects and donate. The transparent funding system gives both credibility and information
to the donors about their money,” she adds.
Agrees 53-year-old Mukesh Verma, a central government employee from Delhi. Verma has been a regular charity donor for the past 30 years. “I used to donate to a few NGOs around Nizamuddin, which work for uplifting children from backward class, in cash or cheque. A few years ago, one shut down and some of them shifted their office. Some agents then started coming to collect the money. I was not comfortable in giving money to an agent,” says Verma.
Verma’s son, who is associated with many crowdfunding campaigns, introduced him to this online way of charity. “This February, I donated to a campaign for child development on a crowdfunding platform. Though I’m not very good with the computer, the process is transparent, easy and a great time saver. And you get the receipt then and there,” says Verma.
Not only individuals like Verma, NGOs too are now taking this online path of charity. “This is crucial for the survival of NGOs,” says Chovva. Echoing this, Varun Seth, founder of Ketto, says, “We started with a handful of NGOs in 2012. Now we have more than 5,000 onboard. Many more NGOs are opting for crowdfunding because of the positive feedback they have received from the crowd in the form of funds.”
Trust is the key
But despite opportunities, online crowdfunding is not a cakewalk, as trust is the key. “Since it is a virtual concept, the trust is to be carved in people’s mind,” says Seth. This is done through multi-step verification processes and ensuring the campaigns are genuine and convincing. “Content is the key here,” says Albin. “And because of that we got support from so many people. Thanks to all who contributed, Amit is out of danger now,” he adds.
Only 28% for charity
Even though Indians are generous, our donations are more for religious purposes. According to the CAF report, 84 per cent of Indians, irrespective of their social status, donate, but 72 per cent goes to religious funding, and the rest to charity. “This is because we are culturally conditioned to donate to a religious place but not to a charity,” says Chovva.
Steps in crowdfunding
• Develop your story. Crowdfunding is all about stories
• Write your script. Visuals and videos will appeal more
• Submit it on a crowdfunding platform
• Spread it in social media such as Facebook, Twitter, etc
• Find initial contributors, with your close friends and relatives pitching in
• Crunch your numbers
• Do PR outreach