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February 07, 2015
BW | Business World
Shailesh Menon

Online crowd-funding platforms bring donors and causes together and make it a win-win for all

Capital CauseSix-year-old Srushti Agarwal jumps with joy when her mother Maya squeezes a sponge on to her palms to spell ‘WATER’. Srushti makes a cheerful attempt to repeat the word, and then quickly turns away to play with her school friends who, like her, are children with special needs.

“These kids are very talented… We need to help them lead a good life,” says 85-year-old Yashu Mehta. At a little over five feet, and wearing a permanent smile that is kind and reassuring, Mehta is the quintessential schoolteacher. For her, joint pains matter less than the well-being of her students.

Mehta, who has served as the head of the special education department at Shreemati Nathibai Damodar Thackersey (SNDT) Women’s University, currently runs the National Society for Equal Opportunities for the Handicapped’s (NASEOH) Falguni Learning Centre for Special Children.

“Many of these children come from impoverished backgrounds. All they need is some support, and I think we should give it to them,” says Mehta. Helping Mehta and NASEOH in their work is GiveIndia, an online donation platform.

“Funding has always been a problem. It is mostly a hand-to-mouth existence for us. The online donation initiative is supporting our cause, without adding much to costs. We manage to collect Rs 10-15 lakh through online donations every year,” says Yogendra Shetty, director general, NASEOH, which conducts vocational skill development programmes for differently abled people. It conducts training across 12 areas and has over 150 students on its rolls.

Giving's a habitIncreasingly, non-governmental organisations such as NASEOH and Ekam Project are tying up with online donation platforms such as Wishberry, HopeMonkey, Ketto, GiveIndia and United Way, among others, to raise funds. This marks a clear departure from the past when NGOs only approached high net worth individuals and philanthropists for funding their projects. Crowd funding is the new mantra for these do-gooders.

Crowd-funding Social Causes
Crowd funding, simply put, is a way to raise small amounts from the general public for a definite purpose. The donations are meant for ‘good causes’; that means donors are not supposed to expect any returns or rewards for their good deeds.

Crowd financing uses social media technologies to reach out to prospective donors.

Sandeep Desai of Shloka Missionaries, however, does not rely on technology. Desai — an ex-professor of S.P. Jain Institute of Management & Research, a business school — reaches out to people in Mumbai’s local trains for donations. Shloka Missionaries is engaged in building schools in Maharashtra’s interiors.

“This is hard work, but at the end of the day, I am a happy man. I’m able to do something for society,” says Desai. He collects around Rs 900-1,200 a day from local train commuters. He also has donors wiring funds to support his cause.
Giving's a habit
Not many volunteers have Desai’s grit and determination. They prefer reaching out to potential donors through social networking sites and online donation platforms. This, in a way, has opened the doors of opportunity for over a dozen online and offline donation platforms.

Facilitating For A Fee
Donation platforms operate like merchant bankers. They help NGOs raise funds from the public for a fee, which could range between 10 and 15 per cent of the amount raised. Some platforms also charge ‘listing fees’ to put up ‘causes’ on their websites.

“The floods in Uttarakhand and Cyclone Phailin rang up a lot of funds last year. Apart from natural disasters, causes such as education, health and poverty eradication attract a lot of donors,” says Varun Sheth, CEO of Ketto, a social crowd-funding platform.

Started a year ago, Ketto has partnered with over 120 NGOs. Amongst its marquee fundraisings is the Rs 10 lakh-plus it raised for luger Shiva Kesavan, who represented India in the Winter Olympics at Sochi, Russia.

“It is easy to raise funds for health and education projects in the range of Rs 5-10 lakh. But fund-raising is an expensive proposition,” says Sheth. Ketto charges a fee of 10 per cent (of funds raised) for its services.

Donation platforms — also known as aggregators — raise funds from general donors and philanthropists. They also tie up with companies, so employees can directly donate through the ‘payroll-giving programme’ to any cause they support. To mobilise funds for bigger causes, they hold charity and fundraising events.

“We have raised funds across mediums. Our ‘payroll-giving programme’ is quite popular. We have also tied up with high-traffic websites,” says Jai Bhujwala, vice-president, Online Giving, GiveIndia. It has raised over Rs 225 crore in the past 13 years. GiveIndia charges 6.5 per cent for its services.

tithiys-sharma Bang For The Buck
The role of aggregators is not limited to raising funds. Modern-day donors expect reports on NGOs they support. Donation platforms such as GiveIndia and Ketto perform due diligence before partnering with NGOs. They also audit their activities, and send out impact reports to donors.

“Donation platforms bring in a lot of professionalism. Apart from fund-raising, they help us in conducting impact audits,” says Ameeta Chatterjee of Ekam Project, which provides healthcare services to underprivileged children.

Charity Begins At Home
According to a report by Charities Aids Foundation (CAF), India sees more donations (in a month) than anywhere else in the world. The US and China have the second and third largest number of donors, respectively.

“Philanthropy is the future,” says Tithiya Sharma, CEO of HopeMonkey, a fund-raising platform dedicated to a variety of causes.

“We are not into big-ticket philanthropy. We focus on people who want to donate Rs 100 for a cause. And to tell the truth, there are enough people who are inclined to charity in India,” says Sharma. HopeMonkey charges 10-15 per cent of the corpus raised for NGO through events.

Echoing Sharma, Jayanti Shukla of United Way says, “Indians believe in giving, but they want to know how their money is used. If only we manage to show the impact, we will be able to bring in more donors. Impact audits are good as they ensure more accountability among NGOs and aggregators.” United Way’s levy is 5-10 per cent of the money raised.

According to some crowd-funding agencies, Indians donate around $6 billion every year. Of this, 40 per cent goes to political parties or religious groups, while education and health attracts close to $3 billion annually. This, in a way, highlights the fact that there is a disproportionate concentration in philanthropic effort in India.

In the US, 40 per cent of charity funds flow into areas such as art, culture, environment and animal welfare.

Beyond Charity
It is not only social causes that attract donations from the general public. Movies, music, technology, business ideas and creative engineering, among others, get financial assistance from enthusiasts in respective fields.

In 2010, Bollywood director Onir raised over Rs 1 crore to partly fund his film, I Am, which was on child abuse and same-sex relationships. Short film maker Harish Iyer also collected money from the public to fund his 20-minute documentary film Amen.

“Technology is another area that can see more crowd funding over the next few years,” says Rinkesh Shah, CEO, Ignite Intent, a general crowd-funding platform. It is currently raising funds for an electric racing car project, a robot plan, an online grocery portal and a stray cats/kittens care project. “We try to reward donors by giving them merchandise, event passes and even experiences like, say, a ride in a newly developed car,” says Shah. Ignite Intent charges a listing fee of Rs 1,000 and takes a 6.5 per cent cut of funds mobilised.

Philanthropy apart, crowd funding encourages people to start something on their own. It helps creators retain full ownership of their work, and be self-sustaining. And, as far as donors are concerned, it affords them the joy of participating in the creation of something they want to see in the world.