CrowdFund17: a pioneering donation crowdfunding platform for SDG impact
A call for action for impact entrepreneurs and philanthropists to join our crowdfunding platform and be part of our ecosystem for change.
In the working paper “Funding the UN Sustainable Development Goals: Lessons from Donation-Based Crowdfunding Platforms”, Dr Marc J Ventresca of the Said Business School, University of Oxford, and Michele Scataglini of INSTA Associates presented the idea to use crowdfunding platforms as an instrument for channelling global philanthropy towards the UN SDGs. The paper also summarized the practical steps that agencies or entrepreneurs can take to build such type of platform.
Now Progress2Impact Ltd. founded by Michele Scataglini and Antonio Potenza, has put these lessons into action and built the platform “CrowdFund17”.
In this article we present the strategy of the platform and how we are testing its application with a group of pioneering impact entrepreneurs who have agreed to be pioneers in this pioneering project.
What is the strategy of CrowdFund17?
As crowdfunding platform our strategy is to connect impact entrepreneurs with a global community of donors, by building an ecosystem that enables this process. We explain this in more detail below.
(1) Crowdfunding campaigns of impact entrepreneurs, focused on SDGs and tech
We have identified a common problem for early stage impact ventures in accessing the financial resources usable for building a product or service prototype and getting the initial traction that prepares them for becoming financially sustainable or raising a first round of finance.
For this reason, CrowdFund17 will focus on enabling crowdfunding campaigns of early stage impact entrepreneurs. More specifically it will host projects that address one or more SDGs and have some element of technology with the potential to scale and provide a material contribution to SDG targets.
The funding target for these types of projects is in the range of $30K but is always weighted in consideration of the project ambition (top-down) and feasibility of raising the amounts (bottom-up).
(2) Donations from family offices, foundations, impact investors and public institutions
It is a good practice for crowdfunding platforms and crowdfunding organizations to have a strategy in place on how the donations will be attracted, and then to execute on that strategy.
Based on the experience of incumbent platforms, 30% of funding targets are generally raised via the first level network of the campaign owner. For the remaining 70% our strategy focuses on public match-funding and larger donations.
Regarding match funding, there’s several government bodies that earmark financial resources to crowdfunded projects aligned with their strategies. For a handful of campaigns focused on energy investment in developing countries we have secured match funding via Energy4Impact, acting on behalf of UK Department for International Development (DFID).
We have also been discussing with family Offices and Foundations interested in the impact world. We understand that for these organizations, donating non-material amounts (e.g. <$10K) in impact projects with the potential to scale, may be a way to identify a robust deal flow pipeline.
(3) Building an enabling ecosystem
We see our mission not limited to being a crowdfunding technology provider, but rather being embedded in a systems-building keychain where our up-stream partners (incubators, accelerators, impact hubs, launchpads etc.) give technical assistance to impact ventures and prepare them for onboarding onto our platform. Our down-stream partners (family offices, foundations, but also VC/PE Funds) provide access to additional funding for the scale/growth phase of the enterprises depending on their respective funding needs.
(4) Curation, curation, curation
We aim at presenting to the donors of CrowdFund17 a list of curated and exciting project opportunities. This translates into several value-added activities that the platform performs:
· Project Identification: we take a proactive approach in identifying the campaigns that are listed on our platform. We do this through our personal networks and the ecosystems we build.
· Project curation: we work closely with the beneficiary organizations to define their project scope, support them in the accurate selection of the relevant SDG Goals and Indicators and in defining the project outputs aligned with the policy framework.
· Due diligence: we couple the checks performed via our payment gateway Stripe, by requesting additional minimum set of documents to the crowdfunding organizations. These include, among others, company registration certificates, balance sheet, possible grant awards. We treat all these documents with maximum confidentiality and sign NDAs.
· Milestone bases payments: unlike most crowdfunding platforms that distribute the funds automatically to campaign owners, our funds are distributed manually via the payment gateway. Funds are distributed when the project provides a ‘light’ progress report to show that the milestones set in the project campaign are achieved.
(5) A transparent business model
We charge an 8% transaction fee on the donated amounts. This fee covers the operational expenses of the platform and contributes towards the curation activity performed by the platform team. These fees add to the charges applied by the payment gateway that are in the range of 2%. This means that the crowdfunding organizations receive approximately 90% of the funds raised.
Who are our pioneering impact entrepreneurs?
We are working with a handful of impact entrepreneurs to finalize their crowdfunding campaigns, which tackle a mix of development challenges through innovative services and business models.
These include addressing health and wellbeing through mobile applications, a blended finance platform for combating energy poverty and a fintech solution for financial inclusion. The table below presents a sample of the framework that we will use for monitoring their contribution towards the SDG and their associated indicators.
What is our call for action?
In our next blog we will provide you the link to the crowdfunding campaigns. Meanwhile we invite you to Join our ecosystem. By working together today we can create a measurable progress towards the SDGs, which will become impact tomorrow:
· If you are an impact entrepreneur focused on the SDGs and want to raise funds on CrowdFund17, we would love to hear from you. We are particularly interested in projects with a tech component and for administrative reasons capable of operating a bank account in an EU country.
· Equally, if you are a family office, foundation, venture philanthropist, please get in touch with us. We are interested in establishing long-term partnerships. We can curate a portfolio of campaigns that can become for you larger investable opportunities in the future. In return we ask you to support these projects with a donation today so that they can show you what they can achieve.
· Finally, if you are a public body and operate a match-funding scheme or are interested in establishing one for projects aligned with your policy goals, we are eager to hear from you and discuss how we can work together towards impact.
About the authors
This article was prepared by Michele Scataglini and Antonio Potenza, founders of CrowdFund17. Both Michele and Antonio are experienced entrepreneurs alumni of the Said Business School, University of Oxford. Below a brief bio and contact details of the team.
Michele Scataglini — michele@crowdfund17.com.
After a career of almost 20 years in consultancy, including 10 years at EY leading government innovation, Michele manages a portfolio of activities and businesses that speak to his aim of driving positive change in the world, including CrowdFund17, INSTA Associates and Executive Education.
Antonio Potenza — antonio@crowdfund17.com.
Antonio is an impact investor and is supporting the development of the platform strategy as well as the identification of crowdfunding projects aligned with the platform strategy. Antonio is also the founder of the Impact Fund Proodos Capital a strategic partner of CrowdFund17.
James Howard — Tech advisor.
After 17 years leading a FinTech incubated by UBS and having completed his Oxford Said MBA, James has shifted to advising leaders in Financial Services, Healthcare, Retail, Social Impact and Education on improving and creating companies. He applies his expertise to the organisational, social and technical mindsets required to make the most of emerging technologies.
