Mary Kom successfully raised money through crowd funding for her boxing training institute.
“Groups, and even crowds, can be wiser than most and sometimes even all of their members; if they aggregate information.” James Surowiecki,says in his book, The Wisdom of Crowds.
This quote aptly describes what India is witnessing. We are in the midst of a social revolution facilitated by digital networking. The digital network impacts the political, social and economical fabric of the country by influencing the crowd. It provides a platform for like-minded people to discuss their passions and contribute to the cause. The effect is more pronounced in the case of politics. This should percolate to the other spheres of society. A lot of projects could be supported by crowd funding, without waiting for government money.
Recession triggered the change...
Anyone who has taken part in Swach Bharat Abhyan (Clean India) knows about the paucity of dustbins in their localities and its impact on cleanliness. However, expecting the local authorities to increase the dustbins overnight is expecting too much. Hence, it would be helpful if the locals independently fund this need. The cost of the dustbins would not be more than Rs. 20 per individual if there are around 200 interested donors. That is crowd - funding for you.
Crowd-funding, which came into existence, post the 2008 liquidity crunch, has gained popularity among start ups, small businesses and voluntary organisations raising money in the United States.
Like-minded people join together
Community crowd-funding is a boon for ideas which are not commercially viable but are important for the group of interested, passionate people. This is relevant as socially productive ideas fail due to lack of funding for being unprofitable. The implementation of these projects would have a multiplier effect on the growth of the economy.
Hypothetically, if Just Dial asks willing individuals to contribute Rupee 1 for every enquiry they make, so as to raise funds for dustbins in their areas, the problem of dustbins could soon be solved.
Community crowd-funding is not all about money, it is also about getting the masses hooked on to new ideas.
Sports and films have taken lead…
Traditionally film industry has been able to use crowd-funding. Shyam Benegal in the late 1970s funded his first movie Manthan through Rupee 1 invested by members of Gujarat Milk Cooperatives. For movie producers it also makes marketing sense to engage targeted viewers to finance production of the movie.
Geet Sethi, the promoter of Olympic Gold Quest, believes there is a need to bridge the gap between the funding provided by government and the funding required for training. Organisations such as India for Sports are acting as medium for raising crowd funds. With sports leagues becoming popular in almost all sports, funds flow would increase for these games.
There are also some business ideas with social benefits such as Biosense Technologies, a developer of urine analysis application. This Mumbai-based company was able to raise approximately half a million dollars through crowd-funding. There are around 150 projects that have already been funded in India.
The road ahead...
Projects, which have social relevance, can also be funded through this source. Case in point is local literacy programmes, which raise the standard of living of the people of a particular community. With increase in employment in service sector among the rural masses, funding would be relatively easier for development work in rural areas too.
The demographic changes in India are heavily loaded in favour of crowd-funding. The working population is young and hence disposable incomes for projects that are viewed gainful by the wise crowd are higher. According to the annual report 2012-13 of Infosys, the average age of its employee is approximately 27.5 years, which is ten years younger to the average Microsoft employee housed in the US.
The social revolution is meaningless without community crowd-funding, which is catching up in India. A movement, which does not have funding capabilities, is like a toothless tiger. Hence, individuals should join hands to become groups and groups become a crowd to fund ideas for the greater interest of the society.