Category Archives: Innovation

About Crowd Funding

Posting #2 in a series on Resource Development
See # 1, Five Elements of Strategic Resource Development

First, a definition from the Oxford Dictionary: Crowdfunding (a form of crowdsourcing) is the practice of funding a project or venture by raising monetary contributions from a large number of people, today often performed via Internet-mediated registries, but the concept can also be executed through mail-order subscriptions, benefit events, and other methods. i

Wikipedia adds this: Crowdfunding is a form of alternative finance, which has emerged outside of the traditional financial system. ii

This latter definition is sometimes called “Equity Crowd Funding” and investors receive equity in the business or venture they are contributing to. This posting is not about this type of Crowd Funding. Rather I am writing about the most common type of Crowd Funding today which allows anyone to donate their money to anything that gets posted on an Internet-based Crowd Funding website. Recipients of funding can be individuals in need, informal groups, performance artists, individual schools, clubs, inventors, product developers, techno- projects, as well as conventional charities and businesses.

Donors to such initiatives do not, as a general rule, get anything in return. Some may get a charitable receipt, but equity is not particularly part of the arrangement. Actually for many, if not most, of the asks being made on sites like Kickstarter or Go Fund Me, there is no equity to be had. Witness two of the appeals below from Go Fund Me, Canada’s largest Crowd Funding website.

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The first one is about saving a single mother and her four children from losing their place and becoming homeless as of September 3, 2016. I am writing this on September 4th, perhaps too soon to see if the money raised stopped her eviction. I sure hope so. The other one is about Pebbles, a dog with liver problems and other illnesses who needs interventions that Darlene cannot afford.

I am not saying these are not causes to donate to. I use these two examples only to highlight that Crowd Funding is changing the how fundraising is done, about why it is needed, and who does it. There are the more standard types of appeals on these sites from charities and relief funds. For them Crowd Funding may very well be but one more way to generate support.

Unlike Go Fund Me, Kickstarter does provide some accountability on its site by reporting on fundraising results in a variety of ways, although neither site offers any accountability reports or information on impact, other than showcasing “success stories.”

Kickstarter tells us the following about its funding activity iii:

  • Since its inception in 2006, Kickstarter as generated pledges of $2.58 billion and successfully funded 111,500 projects.
  • Kickstarter is an “all or nothing” venture. If you do not raise all of the goal, you get zero. Unsuccessful initiatives were greater than successful; there are 200,000 of them reported by Kickstarter.
  • Most successful fundraising appeals were small ones, just shy of 75% of them. Just over 14 raised between $10,000 and $19,999. The dollar range categories are much wider than the smaller ones. Those raising $20,000 to $99,999 make up about 13.2% of the total successes. Less than 3% generate funds in the $100,000 and up category. If you are wondering if anyone has raised $1 million or more, the answer is yes. Of the 111,500 projects, 189 of them hit the million dollar mark (.0017%).
  • Those appeals that have the highest success rate are by category: Dance, Theatre, Comics, Music, and Art. Of the 15 categories listed, Food is in the bottom five. There is no category listed for Social Service, Human Services, Community Work, and so on.

In the United States there is another site that caught my attention: DonorsChoose.org, which exists solely to raise money from citizens for class room projects in schools around the country. Most of these requests appear to come from teachers looking for money to support something in their classroom that the public school system doesn’t fund. Most requests seem to be in the hundreds of dollars. Of three I dug into, the highest request was for $296.75 to support teaching 15 kids about cosmetic surgery. Other requests seem to be about getting money for things that one could argue should be paid for by the school system. I will stay silent on that topic, at least for this posting.

Whether or not Crowd Funding is a good thing for the market place has no right answer. It depends on how it impacts the community and community systems. In other words, its value is contextual. For the mother and children saved from eviction, the impact is substantive for her family. But as a business – Kick Starter is a business – its implications include diluting overall giving patterns of donors which may – and perhaps are – hurting other more traditional appeals from organizations who are trying to help thousands of single mothers and their children. Perhaps more importantly, sites like Kickstarter and GoFundMe are redefining what help and impact look like; they speak to those who are disillusioned with formal charities or with banks and so on.

For your organization or group, the questions you likely face if you are thinking of including Crowd Funding in your fundraising program include the follow:

  • Will raising money this way impact other revenue sources, whether support from your donors or from more traditional funders, who might see success as Crowd Funding as an indication of your lack of need for their support?
  • Given that, by far, the majority of projects that meet their fundraising goal receive $10,000 or less in funding, will entering this market place suit your needs and will the effort and the exposure be worth it, especially if you are not successful? Remember, at Kickstarter and other similar sites, it’s all or nothing.
  • Ten thousand dollars is a good amount of money and for some small groups it is big money. The key will be putting an ask out there for something that is compelling and likely to motivate a large number of small gifts that more likely or not speak to each donor’s emotions. While I could find no evidence to support this next point, my sense is that these types of appeals must be of a kind that generate impulse giving.

I will leave it to you to form your own judgements on Crowd Funding and to decide if and when it has a role to play in your resource development activities. My intent here is to provide information that may be of help.

Stay tuned for the next blog posting, About Social Impact Bonds.

i Retrieved from http://www.oxforddictionaries.com/us/definition/american_english/crowdfunding, September 4, 2016

ii Retrieved from https://en.wikipedia.org/wiki/Crowdfunding#cite_note-1, September 4, 2016

iii See https://www.kickstarter.com/help/stats?ref=about_subnav

Continue reading About Crowd Funding

Disruptive Innovation: a Type of Upside Down Thinking

Upside Down Thinking has a relationship with Disruptive Thinking and Disruptive Innovation, but they are not merely different descriptors of the same thing. You can read a previous posting I did a while back on Upside Down Thinking; this posting is about Disruptive Innovation.

Disruptive Innovation has its roots in the private sector. The concept was first articulated by Harvard professor, Clayton Christensen in 1995 who defined it as “an innovation [that] transforms an existing market or sector by introducing simplicity, convenience, accessibility, and affordability where complication and high cost are the status quo. Initially, a disruptive innovation is formed in a niche market that may appear unattractive or inconsequential to industry incumbents, but eventually the new product or idea completely redefines the industry.” [1]

According to Christensen, there are two fundamental aspects of a disruptive innovation. It either provides a low cost alternative aimed at a segment of the market that the dominate players are not focusing on; or it actually creates a brand new market that is also typically a lower cost alternative in the market place

Consider the disruptive innovation that changed how we “rent” movies. Remember Blockbuster? Continue reading Disruptive Innovation: a Type of Upside Down Thinking

Innovation. What is it?

Innovation.

We all love it, want it, speak it, eat it, and it feels good when something we do is affirmed as innovative by others, especially those we admire. Sometimes, though, and perhaps often, when we don’t hear such affirmations, we create our own. We cite our own work as innovative.

However the recognition of our innovative work manifests, the cynic inside of me does wonder from time to time if our desire to be innovative gives birth to claiming innovation in much of the work we do. That cynic inside of me has wondered the same about me on occasion; just mention that to suggest that my inner cynic has no qualms about digging in on me, what I think, and what I do (and don’t).innovation

What it is?

A common definition of innovation is this: a new method, idea, product. I think other words go here, too, like a new service, device, or structure. Feel free to add more.

Synonyms often cited include: change, revolution, departure, introduction, variation, transformation, upheaval, and alteration.

Okay, so far so good. I see innovation having such words point to its meaning. The real challenge for me is understand how it begins, what happens when it happens, and when and how it transitions into something else. Continue reading Innovation. What is it?

Tamarack 2015 Community Impact Summit. Phew!

What a summit it was!

260 people from Canada, the United States, Denmark, Guatemala, Singpore, New Zealand and beyond, working and learning together, inspired by the likes of Al Etmanski (my favorite speaker at the event), Fay Hanleybrown, Stacey Stewart, and Karen Pittman – all of whom gave keynote addresses.

Dozens of workshops were led by Paul Born, Mark Cabaj, Liz Weaver, and other Tamarack learning leaders.

I was honoured to be one of two artists in residence, doing music and spoken word throughout the week and to be able to give two workshops as well.

An incredible highlight for all of us was a visit Thursday night with the Musqueam people who shared with us their rich history and traditions, fed us venison and salmon, and shared as well their songs, drumming, and dance.  The name, “Musquean” means “People of the River Grass.” I also associate their name with the word, “Kindness,” because of their openness and welcoming spirit and the kindness they exhibited to all of us!

 

If you were not there, all of the materials presented can be accessed at the Tamarack CCI  website. The direct link is: http://tamarackcci.ca/node/9196.

The lyrics and spoken word piece I did are also available at this link:
http://tamarackcci.ca/content/mark-holmgren-song-lyrics-and-spoken-word

If you want to be a part of the Tamarack learning community, I encourage you to visit their many websites:

http://www.tamarackcci.ca

http://tamarackcommunity.ca/

http://www.vibrantcommunities.ca

http://www.deepeningcommunity.org/

 

Why Not Free Public Transit? (Updated)

The first posting was in March 2014. Time for an update.
The first posting was in March 2014. Time for an update.

Update Introduction: This is the first time in my long career in the non profit sector that I actually believe a Task Force will make a big difference. I am talking about the Mayor of Edmonton’s Task Force to Eliminate Poverty. Because of Mayor Iveson’s consistent leadership and voice on this matter and because of the integrity he brings to his office, I hope to be walking along side of him and many others to do exactly that: end poverty. I mention this because I am taking a position on free public transporation that is not shared by other bright minds who sit on the task force with me. 

I believe to take a position one must be certain enough of one’s rationale to do so while also being open to being wrong. Maybe I am wrong. But right now, I don’t think anyone is really looking at free public transportation as a real possibility. That’s really my purpose here: to create more interest and momentum in looking into this before we just write it off. 

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What would it take to make public transit a universal benefit to Edmontonians?  The cost of a bus or train ride or a monthly pass has become an obstacle for too many people and families.  If you are making the minimum wage in Alberta, a monthly pass, currently $89.00, is more than a day’s pay.

Reality Check
Imagine if that worker had two kids and a spouse who needed monthly passes. Each adult pays $89.00 and each child pays $69.00 for a grand total of $316.00. At the minimum wage of $9.95 per hour, it would take one of the earners in that family spending a week’s wages for the monthly cost of the family using public transit.

With more than 100,000 people living in poverty in Edmonton and an even larger number living pay check to pay check, we cannot allow public transportation to become a barrier to employment, health care, shopping for basic needs, and participating in community life. Continue reading Why Not Free Public Transit? (Updated)