If Sir Ronald Cohen despairs something, then it can’t be a trivial problem.
Remember his concerns? “But I also realised as I progressed that the gaps between rich and poor were getting bigger through entrepreneurship. It wasn’t dealing with the issue of those who were left behind.”
When you look at the surge in Impact Investing (slated at a global $300 billion by 2020 as per Global Steering Group on Impact Investment or our country’s purpose-driven finance level going $eight billion by 2025) and then at the sheer absence of strong social entrepreneurs, something doesn’t add up.
Can it be the lack of Venture Capital (VC) interest? Of right interfaces? Of other sources that are seldom tapped? Of scale ladders that other Silicon Valley entrepreneurs have the luxury of?
Crowdera, the Free Online Fundraising Platform for Nonprofits and Individuals, may have asked those questions already. But as a fin-tech company which assists people and organisations to fundraise online for causes, emergencies, and dreams through its mobile-friendly web-based crowd-funding platform – the most important one was, may be, this- There are so many people who do not like to walk around dead bodies or water-logged lanes but, still, would like to contribute for any positive change – and sincerely so – what about them? Everyone has some skill, contribution-level and cause – if only we can leverage it.
So why not bring the power of crowd to social change and make it easy through technology? But after 2300 campaigns raising over 6 Crores ($1.0M) with donors from over 35 countries impacting over 50000 lives (and fund raisers as different as Padmashri Dr.Suneetha Krishnan for Prajwala and Filmmaker Rajat Kapoor) – is it as easy as it sounds?
Founder Chet Jain talks about that and a host of things that an activist craves for while he also confronts a sceptic’s spots – so if you are thinking about impact investing but worried about frauds, the unique ‘too much capital’ problem of this space, hidden financial encumbrances, viability etc. here’s why Jain hopes we are moving to a new narrative.
What gave you this idea? Also, how do you balance viability with the vision that fuelled this concept?
Our purpose was, of course, a philanthropic approach – to build something to give back to the society which is not dependent on dollars. People had come to tune out of donor-dipping conversations and the same model had been chased too blindly, for too long. We started with the premise of a free platform and as we evolved, we embraced new features that customers had started asking for. We realised we had created a new form of value. We have tested monetisation of some features and tested our revenue model last year and are discovering what people are keen to pay for. Now we are ready to create value for our investors. In other words, we want to give free what other organisations like GoFundMe, IndieGoGo etc. are offering.
Is that where technology comes in?
To survive as a business we have developed enterprise-level solutions that provide fundraising-as-a-service. We also host websites on AWS and Crowdera servers. We have often asked this – why does 85 per cent of fund-raising, even in the US, is still offline? What keeps people away from online? What about small and on-ground fund-raisers? We addressed the flaws and the advantages and came with an integrated model. For that, we are leveraging technology to make things easy and seamless – features, dashboards et al. We are just like a software company that way. As an organisation, we choose our clients very wisely though.
You are eyeing a Series A funding next year and just finished some pre-series part?
Yes, and part of that is done. It is a continuous process and we are moving strongly towards the next year goal.
We can’t wish away all the associated hidden costs and issues that this space has been blighted with – guarantees, platform fees, payment processing fees and fraud propensities. How do you navigate all that?
Yes, those are valid concerns; specially when you hear people saying that over 50 per cent of non-profit organisations are fraudulent. As a global platform, we do have a bunch of payment gateways integrated with us. These are renowned and well-experienced players. As a platform we can take only so much responsibility for frauds etc. so we ensure we have good partners – who are strong and compliant enough. We do not disburse money to anyone so the donor directly connects to the beneficiary. We don’t see the money. We also check organisations before on-boarding – social profile, number of volunteers, real ground activity etc.
The vision has to resonate strongly – has to be a cause, or an emergency or a dream. We dig deeper. Is there some strong reason or a strong problem to solve? We ask that and are even okay with copycat models that are trying to solve a real problem by good execution.
Do the GDPR regime and the possibility of fraud or privacy-leaks worry you?
We have strong partners to take care of that. We do not save any customer data like card information except some very-basic donor information and that is exclusively for fund-raisers.
Can this category of entrepreneurs face and handle the too-much-capital syndrome? Specially when Impact Investment is the new meme of sorts?
This is one of the most important questions we need to take head on. We are a live example of sorts – an impact-oriented organisation that can grow as a billion dollar one too. We have to hit the sweet spot for that – make impact but operate like a profit-company. The way we see it – Impact is a by-product of what we do. Just like Google’s search is still free but ad-words is an industry in itself. VCs in India, too, have to find that spot. It’s about the right mix of thought, process and change.
Another model that can work is equity crowd-funding. A syndicate model where angel investors and watch-dogs can come together to blend capital and impact well.
Rest will be easy. Recall how India recovered from the bubble in time. The beauty of India is that we do not always need too much money. What matters is the level of skin in the game. The only part of improvement is that India has become reactive. If only we could be a little more proactive.
Coming to CSR, aren’t there some loose ends in this space?
In Impact investing, awareness is definitely missing so marketing and education have to be taken care of in a strong manner. We have worked with organisations in the US, Canada, Guatemala, and learnt that if we focus on educating people about online fundraising and amplify it in an auto-pilot and sustainable way – things turn different. We want to help every NGO in a sustainable manner. How to reach new donors, how to keep them engaged and emotionally-involved – those questions keep us going. Change is happening and the social sector is truly evolving now – I believe that.
Because of individuals using their power?
Yes, that’s a latent strength we have ignored for long. I always ask – why do we press so much on Corporate Social Responsibility (CSR), what about Individual responsibility?
For example, we have a lean 19-member team and everyone is aligned with some cause that one individually feels close to. I recall how powerful and happy an experience it was when I, as an individual, tried to help a bed-ridden brother of an employee in my own tiny way and saw him getting back on his feet with his self respect intact. Another colleague of ours did something similar with shelters for destitute in Bangalore. You see, all of us, as human beings have the power and the hunger to help. How to make it easy is what we are after.
Good Samaritans in small sizes, but, in a crowd – and hence, powerful, right?
This field is not meant just for high-fliers or people sitting on the top of the pyramid who can speak English and fly for pitches. There is a mid-rung that works hard offline and another lower-rung that does actual work but lacks expertise or hands to hold them with fund-raising. Most start-ups are built for quick sprints and exits – or that’s what I squeezed from my work experience before entering this space. I do not want to go for a sprint. I would go for the marathon.