Why Crowdfunding in India Has Taken To Doing Good
Crowdfunding has emerged as an alternative and in some cases a more effective method of financing ideas and projects. In the west, start-ups have benefited greatly from this model and platforms like Kickstarter and Indiegogo have helped funds brilliant projects, products and ideas, raising millions at a go! Remember the Pebble Watch? Crowdfunding has also enabled new and budding entrepreneurs to take their product to the market and gain initial investment through pre-sales instead of waiting for the initial investment.
However, crowdfunding in India has taken less to startups and entrepreneurial projects and more to doing social good. NGOs, social enterprises and even individuals in need of money have been able to raise lakhs within weeks. Individuals have started campaigns to help NGOs supporting a cause they care about, to help someone they know who can’t afford school fees or even rescue a stray animal and give it a home! The possibilities crowdfunding in India has created for individuals to step up and create an impact have been endless.
Many Indians are even celebrating occasions, like birthdays and anniversaries by fundraising for a cause they care about. While a 25-year-old Mayank raised funds for girl education on his birthday, a 19-year-old Janhavi Patel, raised funds to provide better sanitation facilities in government schools and a 53-year-old Moksha rode from Kashmir to Kanyakumari to help 100 girls pay for a year’s schooling.
Social impact has found a new spell with crowdfunding and it seems to be doing wonders. While in USA and UK, social crowdfunding platforms are doing well too and raising money for social good is commonplace, in India crowdfunding has especially carved itself into the perfect model for creating social impact.
Part of the answer lies in the current crowdfunding norms in India and the rest is made up of the socio-economic problems and lack of government policy.
While SEBI is still contemplating crowdfunding norms, equity crowdfunding is currently illegal. (Online trade of equity is not allowed under the current rules). Thus, most startups and ventures aren’t able to crowdfund investment through this model. Some enterprises have been able to raise money through the rewards-based model, but the number comparatively is very low.
Meanwhile, medical crowdfunding in India has unleashed in full swing. Thousands of patients have raised the full cost of their treatment in days! The lack of any global health coverage plan and the rising costs of treatment have made Indians look for help in other places. To add to that, around 70% don’t have a medical insurance either.
Medical crowdfunding has enabled timely help for cancer treatment, transplants, prenatal care, rare diseases and even accidents and heart attacks. Patients and their families have together dug into their networks through the power of social media and other mediums like email and Whatsapp to even raise money overnight for treatment.
Medical cases are more immediate and urgent and posses a threat to someone’s life, the donors know the immediate consequence and thus are ready to donate. In most cases, the network is well-aware of the patient or someone who knows the patient and thus, the need to help is stronger.
For now, social crowdfunding is working miracles to create impact within various Indian communities, what it does for the other sectors are yet to be seen.