Crowd funding: Involving public in problem solving

28 Sep, 2018 - 00:09 0 Views

eBusiness Weekly

Kudakwashe Mhundwa
Newly appointed Finance and Economic Development Minister Professor Mthuli Moyo has in the recent weeks received a lot of public scrutiny over the launch of a joint crowd funding campaign, meant to raise funds to fight cholera which has since claimed more than 30 lives in Zimbabwe over the past three weeks.

The ‘‘resistance’’ to the idea may be due to a lack of familiarity with the funding model, considering that in the past the public sector was relatively slow in adopting new technological ideas.

New times call for new thinking and the new man in charge of the country`s purse has begun showing the propensity to bring cutting edge ideas to the table. Unfortunately, an idea not previously used by Government had to be meted out in the midst of a crisis.

According to popular crowd funding website www.gofundme.com, “crowdfunding harnesses the power of social networks and the internet to give people the means to raise funds, help others overcome hardship, and meet aspirational goals.

“With crowd funding, you can do everything from helping a friend pay for surgery to fulfilling a student’s dream of attending college, supporting a cause you believe in to helping an entire community recover from disaster.”

In Zimbabwe`s case, the Government opened an EcoCash mobile payment platform allowing citizens dotted across the globe to contribute resources towards the fight against cholera.

The leap of faith by Prof Ncube seems to be paying off with positive responses having been recorded,

EcoCash chief executive officer Natalie Jabangwe said they move to establish the cholera crowd fund received a lot of scrutiny because the country was not used to a digital way of solving things.

Natalie said it was interesting to see the new finance minister talk about crowd funding in relation to cholera, as it is a new concept.

“We are just not used to a digital way of doing things in a crisis and today that crisis fund that everybody threw eggs at has raised $29 million, it’s not so bad at the end of the day.” said Ms Jabangwe

Crowd funding as a method of collating resources has benefits attached to it.

It allows people who are not in the same geographical space to pool funds and resources towards a common goal.

For a country like Zimbabwe with a significant percentage of its population living in the diaspora it serves as a suitable intervention in times of need.

On average Zimbabweans living abroad contribute about $1 billion in remittances annually and this makes them a critical source of funds.

The idea that people come together towards a common public goal shows crowd funding’s potential to unify a nation.

When the results of an effort are announced a community can collectively pride themselves in having collectively responded to a noble cause with positivity.

In the case of the current cholera crisis, Zimbabweans can turn the current medical headache into an opportunity to enhance the spirit of nation building. It gives citizens a sense of ownership.

In cases of public funds, crowdfunding allows a central account to be setup. In their 2013 paper, economic scholars Loreta Valanciene and  Sima Jegeleviciute said; “raising capital through crowd funding platforms is exceptionally accessible” .It is easily accessible in comparison to the traditional fund raising method where people would have to identify government departments and extend their donations. The convenience it brings encourages more benevolence from the public.

Most crowd funding campaigns are run on plastic money and this provides an auditable trail, unlike hard cash which can easily be pilfered or mismanaged.

Like any other idea, crowd funding is not without fault.

Fraudsters use the mechanism as a get rich quick scheme, although the cases are rife in more developed economies. According to an article on crowd funding on www.huffingtonpost.com, outright fraud is occurring on crowd funding sites, such behaviour can violate the Federal Commission Act.

The FTC recently announced a case involving a crowd funding project on the website Kickstarter.com, where a project creator raised funds to develop a board game called The Doom That Came to Atlantic City. The creator had a fundraising goal of $35 000, and succeeded in raising almost $123 000 from more than 1,200 individual backers.

Crowd funding requires absolute transparency and honesty. If it is managed by uncouth individuals, the money may reach the mark and they may fail to announce, especially if the campaign does not have a targeted budget. Despite risks associated with the funding model it has proved to be useful in times of national crisis or even national disasters.

Crowd funding has been instrumental in bringing relief to national disasters and national crises one such example is that of the recent Hurricane Harvey were contributions pour in into different accounts associated with the cause. Campaigns are proliferating on sites like GoFundMe and YouCaring. Some seek money to help individual families whose homes flooded. Others support causes like pet rescue or hot meals.

In the context of Zimbabwe, setting up a similar campaign would not be so bad if public funds are properly managed to support the cause at hand.

Share This:

Sponsored Links