Paul Schulte, Advisor, Banking and Financial Services
August 22nd, 2019
Paul Schulte is the Founder and Managing Editor of Shulte Research based in Singapore. Paul's roles[...]
Category Archives: Online Funding Portals
Raising Capital in a Pandemic World
Medium | Victoria Bennett | March 18, 2020
This week has seen considerable changes in the world, from markets falling, oil prices falling, schools closed, borders closed. We’re moving into a new world order, and this isn’t for a week or two. How can your business stay healthy and grow?
Your company needs to prepare for this new world order. Firstly, look at spending and consider how you can reduce your burn rate? Look at your revenues. What will this ever-changing world do to your revenues? If some taps are turned off, how can you reposition your company to access new revenue streams? Government stimulus funding may help you to access the new revenue streams or pivot.
It’s not all doom and gloom. The 2008–2009 recession founded Uber, AirBnB and Slack, disruptive businesses that took the opportunities in the market. Other companies grew through acquisition and benefited from cheaper assets.
How can you raise the capital to grow and grab the opportunities that the changes with coronavirus bring?
Most outside money, such as Angel Investors or VCs, requires kissing many frogs. You have to meet a large number of people, typically face to face, to build understanding, trust and secure funding.
Last week our company was due to host three investor events. The first one on Tuesday, had over fifty people in Vancouver, the second on Wednesday twenty in Calgary. Then the third back in Vancouver had to be cancelled as the venue went on COVID-19 lockdown. With Social Distancing measures, traditional fundraising needs to be turned on its head.
See: Funding in the Time of Coronavirus
Crowdfunding may be the solution to raise capital from a large number of investors across the whole country without meeting them face to face. The whole process takes place online, from reviewing the offering documents, signing and paying. It can all take place without any face to face interaction. That provides social distance for the investor, the company’s employees and lawyers.
Crowdfunding works best where you can tell a story because people like to back what they believe in, and that is certainly the case for retail investors. For larger investors, they are often looking for deal flow. A crowdfunding platform can provide both. The video gives you a chance to see the team, and to understand their why? The “why” is vital because that motivates companies through the bad times as well as the good.
It is important to tell your story and make it relevant to the current reality, but you need to be authentic too. Next week we are launching an equity crowdfunding campaign for a pain-free needle. The device is pre-dosed and has an enclosed sharp; therefore, it doesn’t require sharps disposal. In the not too distant future, there will be a need to vaccinate a large global population quickly, without fear of pain, or mis-dosing or sharps disposal in developing countries, and at a similar price to a syringe and vial of the drug. PKA SoftTouch, who developed the device, has a story that is natural and resonates in the current landscape.
Breaking through the noise
It is noisy out there; social media feeds are full of COVID-19 advice and emails acknowledging that every company you have ever dealt with has a COVID-19 policy. This too will pass. Advertising spend is already decreasing. With potential drops in revenue, this does make sense, but the companies that responded best after 2008 were the companies that remained in the market and continued to tell their stories. If you are crowdfunding, it will be easier to get your story out, as you will be competing with fewer companies and lower overall marketing spend.
See: Getting In Early: SEC Sees Growth In Equity Crowdfunding
We are social creatures; working from home, we may look to other ways to stay connected. Business channels such as Slack, LinkedIn and Zoom and social channels such as Instagram and Facebook will be our source of connection. These are the main outreach channels for crowdfunding. The increase in working from home means potential investors could have more time without the daily commute and be online more, as well.
A webinar will replace the events cancelled on Thursday and this Tuesday. Potential investors have the opportunity to ask questions and gain trust and understanding so that they can move forward to invest. A face to face launch event scheduled the following week will be live-streamed. This will allow a small group from the company to be present and the larger group of interested investors to meet the team and hear the key information.
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Revolut lets your purchase gold | SoFi hires Amazon exec to lead deposit, card businesses
American Banker | Kevin Wack | March 12, 2020
The latest high-level hire at Social Finance is a former Jeff Bezos deputy who will oversee the San Francisco firm’s deposit, credit card and brokerage units.
Maria Renz, who spent 21 years at Amazon, joined SoFi on Wednesday as an executive vice president and group business unit leader. She reports to CEO Anthony Noto, who joined SoFi in 2018 from Twitter.
The hiring shows how much emphasis SoFi, which has been building out its menu of financial products, is putting on operations and customer experience.
See: Can Fintech Make the World More Inclusive?
Renz has no previous experience in financial services, but she does have an extensive background in consumer-facing businesses that have operational complexities. She joined Seattle-based Amazon in 1999, rising through the e-commerce giant’s ranks and eventually leading a team of 80,000 employees who provide customer service around the globe.
The three SoFi business-unit leaders who now report to Renz all have backgrounds in the financial services industry. Eugenia Gibbons, who heads SoFi Money, the company’s cash management account, is a former BBVA executive.
John Gardner, who leads SoFi’s investment, insurance and advisory unit, was previously a co-founder of the personal finance software firm LearnVest and chief operating officer at Cabezon Capital Management.
And Naga Parvatharajan, who heads SoFi’s credit card unit, formerly worked in Goldman Sachs’ consumer banking division. SoFi’s foray into the credit card business is expected to launch later this year in partnership with Mastercard.
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TechCrunch | Romain Dillet | March 12, 2020
Fintech startup Revolut has introduced a new trading feature for premium users. Starting today, Premium and Metal users can access gold exposure from the app.
Revolut works with a gold services partner (London Bullion Market Association) so that money you spend on gold exposure is backed by real gold held by this partner. In other words, you’re not going to receive gold coins in the mail. You can just invest money based on the price of gold.
The startup has been building a financial hub and already lets you purchase cryptocurrencies and buy public shares. Gold is part of a new feature called Commodities.
See: The 5 Debates That Will Shape Fintech In The 2020s
There are multiple ways to invest in gold. You can purchase gold exposure directly at market price, set a limit price to auto-exchange gold when it reaches a certain price or get cashback in gold for Metal customers.
At any time, you can convert your gold investment back into fiat currencies or cryptocurrencies. If you spend money with your Revolut card and you only have gold, Revolut will use your gold exposure automatically. You can also transfer gold exposure to another Revolut user.
According to the company’s website, Revolut charges a 0.25% markup when you trade gold during the week and a 1% markup from Saturday at midnight to Monday at midnight U.K. time.
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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3 Ways Digital Assets Will Reshape The World
Exponential | Sunny Durante | March 9, 2020
A straightforward explanation of what digital assets are and a few ways they will directly impact your life
Digital assets are poised to revolutionize the way people operate and exchange value in the world. Adoption of distributed ledger technology, which is the platform digital assets are built upon, has provided the infrastructure for this new asset-class to bring much-needed innovations to the world of finance and beyond.
In their simplest form, digital assets are units of value or ownership stored on a distributed ledger. Stock shares, equity, property, and nearly any other unit of value imaginable can be stored and represented on these ledgers. They also enable fractionalization, so you can own a small percentage of a larger item.
See: Early-stage Investing – The Public gets a Seat at the Table
The number of applications for digital assets is vast and steadily expanding, yet few people truly understand how this exciting and innovative technology will impact their lives. In this article, we look at three areas where digital assets will make a direct noticeable change to people’s lives and our financial system.
Democratizing Access To Investments For All
Traditionally, private capital markets have been exclusive, disorganized, and disconnected from the majority of investors. The best-performing investments from the past decade have also come through private capital markets, but have only been available to accredited investors. These are wealthy individuals typically classified as having a net worth of at least $1 million, not including the value of a primary home, or households where the combined income has been $300K or more for a few consecutive years. In the United States, this only accounts for 9.86% of all households. The other 90.14% are classified as retail investors and are, by law, not allowed to participate in these deals — which we see as a form of financial exclusion.
Even if you are an accredited investor, the process of making informed decisions in private markets can be difficult. Unlike publicly-traded asset markets (i.e. stock markets), you likely won’t find a neat and organized list of all investable companies with all the details necessary to make a proper evaluation.
Looking at the larger global market, the percentage of investors that can legally participate in private equity fundraising is much smaller. Most private markets tend to be most accessible to domestic investors and less so, or even completely inaccessible for international investors. For example, if you are a citizen of the US and want to invest in a specific company based in the UK or Germany, it’s highly impractical to via private markets. Even public markets have limited options. The only common exceptions are if the company is large enough to list publicly on a US stock exchange or if you are willing to select that company’s stock along with a basket of other shares via a national ETF such as NYSEARCA: EWU or NYSEARCA: EWG.
See: Architecting a New World: Investment Crowdfunding and Digital Assets
Digital assets and digital ledger technology will break down these barriers and create a truly global system where anyone can invest in any company anywhere on the planet 24/7/365 for very low cost– all with the click of a few buttons.
This marks a massive tangible leap forward for financial inclusion and an end to slow and complicated private market investment processes. We already see this with digital currency exchanges, so why shouldn’t this level of accessibility be the standard for all other forms of investment?
Unlocking The Value Of Illiquid Assets
Illiquid assets are any assets that can’t be bought, sold, or transferred easily. Most assets in the world are currently illiquid. A classic example would be real estate. Buying or selling a piece of real estate involves a lengthy, complicated, and expensive process that typically requires many external parties, like realtors, lawyers, and title companies to complete.
Aside from being difficult to transfer, all the inherent value of the asset, along with your capital investment, is locked-up in an all-or-nothing ownership model. While it might feel good to see the value of your investment going up, that increase only lives on paper. You don’t actually get to enjoy that up-side or utilize that gain toward another investment until you sell or refinance the property.
Digital securities are poised to disrupt this restrictive model by enabling fractionalization. With fractionalization, there is no longer a need for lengthy paperwork, complex fee structures, or all-or-nothing ownership. Investors will be able to break the larger asset into smaller components and sell off as many of those pieces as they desire — thus unlocking value previously trapped within the asset and freeing up your capital to be reinvested elsewhere.
See: Bank of Canada Speech: Money and Payments in the Digital Age
This isn’t a completely new concept, we’re all familiar with this idea as it relates to stock markets and publicly traded companies. That said, the overwhelming majority of assets in the world follow the old model, with all their value locked-in until a sale frees up the trapped value.
Soon, as the trend towards digital assets continues to build momentum, you will have the option to enjoy any upside to your investment almost immediately or raise capital against an asset when you really need it. Imagine being able to quickly cash-out your gain in an investment so you could apply it to a new opportunity that just came across you desk or a professional sports team having a tough economic year was able to raise capital by selling small fractions of their franchise to devoted fans who would be delighted to own a portion of the team they love.
This feature not only improves mobility for investors but can also have a massive positive impact on society. Let’s use the example of a residential apartment building struggling financially. Currently, they have three options: A) sell the property and take a potential loss B) refinance the building, likely on poor terms or C) raise the rent for the tenants, who may not be able to afford the increase and be forced to move.
Fractionalization through digital assets would create an option D) where the building owner can easily sell a fraction of the building’s equity to investors who have the funds and see the long-term value. This would create a win-win-win situation where the owner’s immediate financial need is solved, the new investor gets a stake in a promising property, and the building residents remain able to stay in their current homes.
See: Fearless: How Technology Helps Conquer our Fear of the Unknown
While this is just one of many scenarios, it clearly shows the ability of digital assets to not only support investors with capital mobility, but it’s potential to create real positive impact for entire communities.
Cutting Out Middlemen & Value Extractors
One of the few things most people universally agree upon is that they don’t like paying excess fees — yet our current financial system is rife with them. Let’s imagine you want to wire money from your Canadian bank account to your US bank account. To start, there is a fee to have a checking account in the first place. The exchange rate you’re quoted isn’t the actual exchange rate, but one padded with multiple convenience fees. Then, there is a wire transfer fee to actually send the money. A fee to receive the wire on the other end, and the potential for additional unexpected and unexplained fees if the bank uses any intermediary financial institutions to facilitate the transaction. All of those fees just to move your money.
Trading is no different. Charles Schwab, Fidelity, and TD Ameritrade all charge $49.95 or more to execute a single fund trade. Broker-assisted trades from these companies come with a fee of $25 or higher. Some firms even charge a redemption fee if you sell a mutual fund within 60 to 90 days after opening.
This is madness. A clear example of a legacy financial system seemingly designed to reward unnecessary middlemen and institutions aimed at extracting value rather than providing it. Up until now, we were forced to endure this as banks and other large financial institutions were the gatekeepers. They set the rules we all had to play by, and very few appealing alternative solutions existed — but now, with the advent of digital securities, the winds of change are blowing.
See: How Big Data and Blockchain are enhancing FinTech
Distributed ledger technology enables transactions to be executed quickly, cheaply, and directly. With digital assets, you circumvent traditional gatekeepers and other unnecessary middlemen looking to extract value from your transaction without providing any real benefit. Additionally, this is a truly global technology, meaning it can be accessed anytime from anywhere with zero foreign transaction fees. One anonymous person was even able to instantly transfer $468.5 million worth of digital assets for only $374.98. Sending that same amount using one of today’s lowest-fee traditional solutions would have an estimated fee of over $1.6 million and multiple days of wait time for the funds to land. Obviously, this is an extreme example and investors are typically happy to pay some reasonable fees to ensure the safety of their trades, but it does showcase what’s possible when utilizing this new technology. This same protocol can be applied to transferring mutual funds, stocks, real estate deeds, and numerous other stores of value — cutting costs, time, and unnecessary middlemen along the way.
While we only looked at three examples, the potential use-cases for digital assets are nearly infinite. Digital assets are faster, safer, and far less expensive than traditional solutions. The technology offers greater transparency and it’s distributed immutable nature ensures ultimate protection against tampering and corruption.
While most of the buzz surrounding digital assets remains focused on its high-end financial applications, of which there are many, perhaps its biggest benefit remains largely unsung. The real gift to the world rests in its capacity to promote financial inclusion, leveling the playing field and allowing everyone, everywhere access to the new digital economy.
As support and adoption continue to grow it’s a truly exciting time to witness how digital assets and the technology they’re built on may improve our lives, and hopefully, help repair our world.
For more information, please visit: Exponential
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Canadian securities regulators propose new nationally harmonized crowdfunding rules for comment by May 27
BCSC | Release | Feb 27, 2020
Vancouver – The Canadian Securities Administrators (CSA) is seeking comment on proposed harmonized rules for start-up securities crowdfunding.
Proposed National Instrument 45-110 Start-up Crowdfunding Registration and Prospectus Exemptions would replace and enhance the requirements currently in effect in British Columbia, Alberta, Saskatchewan, Manitoba, Québec, New Brunswick and Nova Scotia.
Enhancements from the current requirements include:
- Increasing to $1 million (from $500,000) the maximum total amount that could be raised by a business under the crowdfunding prospectus exemption per year;
- Increasing to $2,500 (from $1,500) the maximum investment a purchaser can make in an offering, with a higher limit of $5,000 if the purchaser obtains advice from a registered dealer that the investment is suitable for the purchaser;
- Requiring funding portals to annually certify that they have sufficient working capital to continue operations for the following year.
“Small businesses and start-ups need unified regulatory requirements for securities crowdfunding to expand their access to capital,” said Louis Morisset, Chair of the CSA and President and CEO of the Autorité des marchés financiers. “This proposed National Instrument would introduce a single, harmonized set of rules, and increase the thresholds for capital-raising and investing, while still providing appropriate investor protection.”
Since 2015, about 70 distributions of securities have taken place under the existing start-up crowdfunding prospectus exemptions, with an average investment of $734 from each purchaser.
See: NCFA Canada’s response to BCSC Notice 2018/1 ‘Consulting on the Securities Law Framework for Fintech Regulation’
The notice and request for comment can be found on CSA members’ websites. Stakeholders are invited to submit their comments in writing by May 27, 2020.
The CSA, the council of the securities regulators of Canada’s provinces and territories, co-ordinates and harmonizes regulation for the Canadian capital markets.
View the original release --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Securities Exchange Commission’s Advocate for Small Business Capital Formation – Annual Report 2019
SEC | Martha Millar | Jan 8, 2020
Annual 2019 Report to Congress
The Office prepares an annual report to Congress summarizing its activities in supporting small businesses and their investors during the immediately preceding fiscal year. The report provides statistical information and analyses of the issues on which the Office has worked, information on steps that the Office has taken to improve small business services, and a summary of the most serious issues encountered by small businesses and their investors, including any unique issues encountered by minority-owned small businesses, women-owned small businesses, and small businesses affected by natural disasters. The FY2019 annual report was delivered on December 19, 2019.
Download the 72 page PDF report --> Now
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Holiday Greetings from Lending Loop! 2019 Year In Review
Lending Loop | Reza Jafer | Dec 17, 2019
2019 at Lending Loop was an exciting and fruitful year as we achieved significant company milestones. We are proud to have enabled 10,000+ Canadian individuals to cumulatively invest over $60M in Canadian small businesses.
2019 Highlights:
- Over 400 businesses across Canada accessed $25,000,000+ of capital through Lending Loop
- $4,000,000+ in interest and $14,000,000+ in principal paid to investors, contributing to their financial goals
- Opened the investment platform to Trusts, Foundations, Charities, Partnerships, Corporations and Institutional partners to invest alongside Canadian individuals
- Enhanced Portfolio Analytics allowing investors to have real-time insights into their portfolios
- Launched getloop.ca - Canada's first 100% free business credit score monitoring service for business owners in partnership with Equifax
Our team was proud to receive recognition from Globe & Mail’s Report on Business as the 27th Fastest Growing Company in Canada, acknowledging the success of our ongoing mission to provide innovative financial solutions for small businesses.
If you would like to learn more about the Lending Loop platform, visit www.lendingloop.ca/lenders or contact one of our registered Dealing Representatives at lenders@lendingloop.ca
Till next time, onwards and upwards!
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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What to expect from social fundraising world in 2020
FundRazr | Mira Soullen | Dec 16, 2019
FundRazr is a free enterprise-class crowdfunding platform and the secret sauce behind 160,000 fundraising campaigns in 40+ countries. FundRazr is laser-focused on eliminating the guesswork of raising money online making it effortless and effective.
What to Expect from the Social Fundraising World in 2020
Things are constantly changing in the world of social fundraising, also called “crowdfunding”, but it’s safe to say that 2019 was an especially interesting year. As some more traditional fundraising methods lost relevance, we helped many organizations try out crowdfunding and social media fundraising for the first time, embracing emotive, personalized storytelling and its wide-ranging impacts.
As a result, FundRazr’s community of nonprofits grew their social fundraising confidence and worked to engage Millennials and Gen Z with their causes, inviting them into giving and finding new longterm donors and advocates.
Wow. A year of change, for sure - but now, it’s almost over! What developments can we expect to see in the social fundraising world as we move into 2020?
See: Social equity must be central to urban tech innovations
Businesses and Charities Will Find Better Ways to Collaborate
Commerce and charity working together is nothing new, but it’s a trend that will continue to strengthen. For many nonprofits, finding new longterm sponsors is uncharted territory, and many staffers may feel that it’s out of their wheelhouse. However, developing mutually beneficial sponsor relationships and marketing partnerships are critical goals to work towards. Once you find a business that’s the right fit, they won’t just provide monetary support - they’ll become passionate advocates for your cause!
Furthermore, an economic recession is a very real possibility for 2020 that must be taken into account. By working together, charities and for-profit businesses can mitigate the revenue shortfalls that are part of an economic downturn. This can be a mutually beneficial relationship - consumers may be more likely to spend money at a business where their dollar is doing something good, and people who would not have otherwise donated might be more likely to if they do it together with a sponsor: for example, you can offer Perks of your sponsor’s product, or receive a small percentage of your sponsor’s profits.
Working with sponsors can help you Make Everyday Giving Effortless (MEGE). People want to give easily, and through channels that are convenient to them. Today, that means giving through smartphones, and donations processed immediately so that they can be easily shared on social. Systems to gamify donation or offer fun perks in return apply here, too.
Donors Will Be Encouraged to Give Less, but More Often
When it comes to donations, frequency will be king. It might sound surprising, but ten $50 donations are a lot better than one $500 from the point of view of the fundraiser. These frequent, smaller micro-gifts help cultivate giving habits and emotional involvement in your cause, establishing the donor as part of your community and eventually, a long-term advocate. By giving often, they’re staying in touch, sticking around for updates on where your work’s at and how their gift will help. The more involved your donors are, the better their lifetime value for your organization.
This trend is also ideally suited to micro-projects, and with FundRazr, more campaigns doesn’t mean more time spent running them! Consider making a campaign for each individual project you’re working to complete - for example, each house you’re trying to build in a hurricane-damaged region, every family you want to provide with Christmas dinner, or every animal you need to keep off the street.
See: Online Giving Trends Show Consistent Growth in the US Since Donation Crowdfunding Debuted in 2012
This kind of donation and fundraising is a win-win: it more closely mirrors the actual work your organization is doing, so that your donors feel like they’re “part of the team”. The more engaged donors are with your mission, the happier they’ll be to help.
Segmentation and Sophisticated Storytelling Will Become Even More Important - Personalizing Donor Experience is Everything
If you’re working in the nonprofit sector, it’s because you care about what you do. To fundraise successfully, you need to help potential donors care just as much. Storytelling is the way to engage people, but sophisticated, personalized storytelling is how you will truly engage as many people as possible.
Let’s say you’re running a wildlife rescue. Since you’re an animal nonprofit, you might draw the conclusion that anyone who loves animals could be a potential donor. And you wouldn’t be wrong, exactly - but it’s not that simple. For example, 20% of your donors might be donating because they care about hawks, while another 30% might like foxes, but not care as much about birds. Identifying these donor segments and marketing to them effectively will help you speak to them in a way that will resonate and optimize your revenue potential.
By showing your audience personalized content according to segmentation (showing your bird lovers hawks), you can make sure their impression of your charity is a memorable one.
Ephemeral Content Will Continue to Rise
In social fundraising, ephemeral content means two things: content that only exists for a short time (like Instagram Stories) or content we only pay attention to for a short time (an Instagram post). Clearly, ephemeral content is tailor-made for social media. This type of content lets you reach a wider audience, engage with them, and elicit an emotional reaction - all without too much labour-intensive content production.
Think of ephemeral content as a greeting card for your organization. It’s sent out to many people (Instagram’s hundreds of millions of users), is fun and simple (a nicely designed graphic, not an original video), and it shares a feeling by sharing the work you do. These personal, emotional stories will get the word out about your mission and plant the seed of donation in your audience’s minds. Make a plan to share content like this at least once a day.
Social Activism Will Keep Growing - And You Need to Keep Up
People are more attentive to social causes than ever, and that’s a wonderful thing. Look at the climate justice movement Greta Thunberg is leading - people all over the world are getting involved, and a large part of it is on social media! Whatever your nonprofit’s mission adopting social fundraising tools and techniques will only get more important. In 2020, if your cause doesn’t have an online community cheering it on, it might as well not exist in the real world.
The statistics around online activism are staggering. Roughly half of United States citizens have been civically active on social media in the past year. If you’re wondering what that looks like, some examples are changing your profile picture to support a cause, posting about voting in an election, looking up information on protests or rallies, and using political or social hashtags.
See: Crowdfunding campaign raises $3 million to protect Princess Louisa Inlet property
Many people believe we are living in a watershed moment for social change. People are dissatisfied with the current state of society, and are beginning to create a vision of what else is possible. As charities, if we offer actionable steps towards change, real progress is possible. If you share the impact each donation makes, it inspires people to give more often. It’s an exciting time for nonprofits, but we need to stay up to date with today’s world to take advantage of it.
Revenue Diversification Will be Even More Important
There are still many charities who rely on a single source of income. Whether it’s grants, major donors, or large fundraising events like galas, this is a risky proposition. With economic turmoil happening globally and older fundraising techniques dying out, it’s more important than ever to diversify to ensure cause longevity and survival.
It’s time for all nonprofits to push their comfort zones. It’s critical to try out new ways of revenue generation like crowdfunding. Establishing multiple streams of income will allow you to set up a sustainable charitable model that mitigates all inevitable risks.
The Donor Journey’s End Will be Just as Important as its Beginning
We all know that a compelling, convincing story is important. Introducing potential donors to your cause, crafting a strong ask, and guiding people to the donate page are all essential parts of the donor journey. However, many nonprofits forget about optimizing the end of the journey - the actual donation page!
Unfortunately, we see many nonprofit websites with broken donate buttons or donation pages that aren’t optimized for mobile. When donors finally click ‘donate’ they’re at the peak of their emotional engagement with, and excitement for your cause. The donation page, and the actual act of donating, should carry on this experience - not kill it.
It should be a priority to make sure their donation page is mobile-optimized. Social sharing must be enabled and the page should have a short story reminding donors why they decided to give. If you’re working with FundRazr, use our one-page donation template. It includes all the necessary elements the make sure donation is just like the rest of their experience - positive and inspiring!
Change might be scary, and social fundraising world has seen a lot of change over the past year. But even though 2020 will be bringing more change, it’s a great and exciting time to be a nonprofit - as long as you’re willing to adapt.
Happy Holidays and hope your 2020 will be exciting and positive.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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