Repost from IBM Social Business Insights blog: Crowdfunding: Harnessing the power of social networking to raise money (Part 3 of 3)

IBM Social Business Insights Blog logo
IBM Redbooks thought leader logoEarlier this year I started blogging for the IBM Social Business Insights blog as part of a team of IBM Redbook Thought Leaders. I'll be reposting those blog posts here on my personal blog. Crowdfunding: Harnessing the power of social networking to raise money (Part 3 of 3)  was originally published on June 29, 2012, and is owned by IBM.
I recommend checking out the IBM Social Business Insights blog for some compelling and though-provoking content. 


Crowdfunding: Harnessing the power of social networking to raise money (Part 3 of 3) 

Part 1 and Part 2 of this Crowdfunding blog series look at some successful crowdfunding platforms for creative projects in the United States and the rest of the world. Part 3 looks at two additional crowdfunding uses: microlending and charitable causes.

Crowdfunding for microlending

Investopedia defines microfinance as: A type of banking service that is provided to unemployed or low-income individuals or groups who would otherwise have no other means of gaining financial services. Ultimately, the goal of microfinance is to give low income people an opportunity to become self-sufficient by providing a means of saving money, borrowing money and insurance.
Man teaching a boy to fishMicrofinancing is based on the old adage, “Give a man a fish and you feed him for a day.  Teach a man to fish and you feed him for a lifetime. Crowdfunding has simplified microfinancing by using social networking to more easily connect the lenders and the borrowers.

One of the most well known crowdfunding microlenders on the scene, Kiva, summarizes its purpose as: “We are a non-profit organization with a mission to connect people through lending to alleviate poverty. Leveraging the internet and a worldwide network of microfinance institutions, Kiva lets individuals lend as little as $25 to help create opportunity around the world.”

And their statistics are impressive. As recently reported by, “Kiva has released its annual report for 2011 indicating that its loans to microfinance institutions increased from USD 71 million in 2010 to USD 89.5 million in 2011. The number of individual lenders who fund these loans increased from approximately 371,000 in 2010 to 457,000 in 2011. Kiva reported 26 new field partners who joined its network in 2011.” also states, “Since its inception in 2005, Kiva has loaned a total of USD 313 million, which came from approximately 765,000 lenders and was disbursed via field partners to 782,000 borrowers.  The average loan repayment rate is reported to be 98.9 percent.”

As with the other crowdfunding ventures, if the full amount, in this case a loan, isn’t fully funded, it does not happen. I’m helping finance two separate entrepreneurs with Kiva, and it’s a gratifying experience that I’ll continue funding. My first loan was part of a total $3,000 loan to a woman in Armenia, who wanted to purchase cows and develop her business, which will help her get more income and cover her family’s daily costs, plus one day start her own family.  She has paid back 34% of this loan on a 24 month payback schedule.

The amount I have invested in Kiva is small, but I enjoy getting updates on the two entrepreneurs I’m helping.

Crowdfunding for charitable causes

Although crowdfunding for creative projects is fun and exciting, crowdfunding for charitable causes is near and dear to my heart. As a concept, it’s been around longer than the other variations of crowdfunding. Organizations such as Lymphoma & Leukemia’s Team in Training (TNT) and Avon Walk for Breast Cancer create fundraising pages on their websites for their participants, who turn to their social networks to raise money for these charities. TNT, for instance, has raised over $1.2 billion to fund lifesaving cancer research.

Other sites such as Just Giving, a British fundraising website, enable charities to create fundraising pages on the Just Giving site, instead of having to host their own pages and handle the donation taking and distribution of funds.  Using Just Giving’s website, 21 million people have helped raise £1 billion for charity since its inception in 2000.


I’ve shared a few examples of crowdfunding, but you can see it’s clearly a growing trend. I’m always a little shocked by those who think that social networking is a fad that will fade away in the next two or three years. It’s clearly a paradigm shift in our communications with each other, and will continue to evolve as our mobile devices become faster and even more ubiquitous.

Using Graphics to Explain Social Media

We've always been a very visual society. And with the implementation of Web 2.0 technologies and the proliferation of social media channels — digital images and graphics are everywhere — perfect for the visual learners among us.

 If you're not familiar with this learning model (one of many), Wikipedia briefly describes Neil Fleming's VAK (or VARK) model that divides learners into three types:
  1. Visual learners who think in pictures and learn best with visual aids (infographics would work well)
  2. Auditory learners who learn through listening (these are the podcast and book on CD people)
  3. Tactile learners who learn through doing and touch (those who need to experience it themselves to learn, enjoyed science lab immensely)
I'm definitely a visual learner, and it doesn't matter if there are words or images — it's still all visual. For instance, I've always been one of those people who is inspired by quotations (that's the point, right?) that resonate at different phases in my life. And I keep a file of relevant quotations for the Facebook pages I manage, and I enjoy sharing the ones I find on my own Facebook page. But lately, I've noticed the words alone are no longer enough — they're always included on or with an image. (There's a potential  argument here about too much of a good thing diluting value, but I'll leave that for another time.)

So recently, this graphic came across my Facebook news feed, and amused me to no end (so of course I had to share it).

FACEBOOK: I like cupcakes; Twitter: I'm eating a #cupcake.; Foursquare: I'm here with a cupcake.; Instagram: Here's a pic of my cupcake.; YouTube: Look at me eating a cupcake.; Last FM: Now listening to "Cupcakes".; Pinterest: This is a beautiful cupcake. Myspace: The name of my band is "Cupcakes".; LinkedIn: My skills include eating cupcakes.

And it reminded me of one I saw a few months ago. (I guess food and a sprinkling of snark cross most if not all social, ethnic, and gender boundaries, so it makes for a good example.)

And whether or not you're familiar with all of these social media channels, you can still get a good feel for how people use them by these tongue-in-cheek examples.

And really, isn't that the point of them?

Repost from IBM Social Business Insights: Crowdfunding: Harnessing the power of social networking to raise money (Part 2 of 3)

IBM Social Business Insights Blog logo
IBM Redbooks thought leader logoEarlier this year I started blogging for the IBM Social Business Insights blog as part of a team of IBM Redbook Thought Leaders. I'll be reposting those blog posts here on my personal blog. Crowdfunding: Harnessing the power of social networking to raise money (Part 2 of 3)  was originally published on June 22, 2012, and is owned by IBM.
I recommend checking out the IBM Social Business Insights blog for some compelling and though-provoking content. 

In  part 1 of this series, I reviewed the concept of crowdfunding, and why the growth of social networking has made crowdfunding easy, possible, and popular. I also reviewed Kickstart, which is the most popular of these types of project-funding platforms.

Ulule logo
Only US residents can create projects in Kickstarter, though anyone in the world can help fund one. For entrepreneurs in the rest of the world, the leading crowdfunding site is Ulule, run by a team from Paris. It’s smaller than Kickstarter, but has a broader set of project categories including:
  • Film and video
  • Music
  • Comics
  • Games
  • Photography
  • Stage
  • Solidarity
  • Technologeek
  • Journalism
  • Design
  • Sports
  • Travel
  • Books
  • Fashion
  • Green
  • Childhood
  • Craftsmanship
  • Fine Arts
  • Politics
Ulule also explains to potential project owners about the reward system, recommending a tiered system that increases in value as the donation increases in value, and that gives donors rewards closely linked to the project such as an invitation to screenings of the movie created, a recording of the concert being financed, or a postcard of the mountain to be climbed.

To assist in crowdfunding, for creative project owners, Ulule has a primer available that describes the need for trust, and about the existence of the three circles of crowdfunding:
  • Friends and family
  • Friends and acquaintances of friends & family
  • Everyone else
Three circles of crowdfunding
Project creators must start in the first circle, or inner circle, and work their way outward, gaining trust and attention as they work through their networks. (Plus, they can’t publish on the site until they have at least five supporters.) The third network is the one with the largest amount of available funds, and the most difficult to crack.

An IBM colleague of mine from Italy, Nicola Palmarini (@nipalm on Twitter), first brought my attention to Ulule when he posted a personal project called The way to l'Olympia: A documentary on barriers between dreams and reality – a wonderful documentary about dreams, disabilities, and accessible travel. His project received 109% of funding and is in its final stages.

About his experience, Nicola said, When I started the project I didn’t have a single cent in my pocket to make it happen. So I just said myself ‘Is there any other way? No? So let’s try.’ This was a first of a kind – I’ve never done such a thing before. And it worked out. We are now finalizing the documentary of bringing Eleonora, a mobility-impaired friend from Nettuno (a small village near Rome), to attend the concert of her favorite band in Paris. She had never crossed the Italian border or flown in a plane before.”

Nicola is willing to share the lessons he learned from his experience:
  • You need a good idea to move people to help you.
  • Communicate, communicate, communicate; if you can use multimedia even better, but never leave your funders alone. 
  • When you set the funding amount, be very careful, it’s a double-edged sword. If you set it too high, then maybe you’ll not be able to reach the goal, that is, all your efforts will be in vain. If you set it too low, then you’ll have to explain that you reached the target but you need more money anyway and ask people for more funding. Not easy at all, trust me. 
  • Build an outer circle strategy; start from your closest friend and then enlarge the list in ring 
  • The kickoff is all you need to boost immediately and raise the temperature of your fundraising from day one. 
  • Now it's your time, good luck!  

Ulule, like Kickstarter, takes a 5% commission on fully funded projects. It’s currently available in English, French, Portuguese, Spanish (beta), Italian (beta), and German (beta).

Stay tuned for the third and final part of this series, where I delve into crowdfunding for microlending and philanthropy.

Great Innovations — Crowdfunding with Innovocracy

I'm a huge fan of crowdfunding, and recently wrote a 3-part series on the IBM Social Business Insights blog that I'm in the process of reposting here on my blog (Part 1). But I'm so impressed with this crowdfunding site,, and at least one of the projects on it, that I wanted to give it a special shout out.

According to the website, the idea behind Innovocracy is bridging the gap between ideas and reality in academic research:

"Both pure and applied research often reveal potential products and services that can have a positive impact on society. But taking that research and developing it into working prototypes or demonstrating a proof of concept can be challenging. In the academic environment finding the funds to build out and test ideas with commercial applications is often a challenge. Yet finding those funds can unlock the potential of the millions of dollars and thousands of hours spent on research programs. Innovocracy was created to bridge the gap between powerful ideas and beneficial applications of those ideas. We offer a funding source that connects people who want to support innovation in academic research and those innovators found on campuses around the world."

The innovation that really caught my attention is the Web-Based Volunteer Support Network for Blind and Low Vision People.

Screenshot of VizWiz in action.
The captioning reads: iPhone: Double tap the screen to take a photo.
Double tap again to post card and start asking question.
The basic concept is a wonderful example of crowdsourcing at its best. VizWiz is an iPhone application that blind people can use to answer visual questions in their everyday lives. Users simply take a picture and speak a question they’d like to know about it, and their questions are answered by people out on the web, usually in under a minute and all for free.

VizWiz logo
It was released to the Apple® App Store a little over a year ago, and has been a booming success with more than 5,000 users asking over 50,000 questions. So successful in fact with both users and potential volunteers that the current setup is unsustainable and the creator, Jeffrey Bigham, PhD, from the University of Rochester, is looking for $5,500 by September 14th to expand the service by creating a web site hub and answering center.