Why Crowdfunding Transcends Charity as We Know It

The baby is growing up.

After more than a decade, modern crowdfunding is fast becoming an effective and dynamic method to raise funds—and rally the masses. And while it is still some years away from total global domination, we can’t deny it: If we’re not running a crowdfunding campaign or giving to a crowdfunding campaign, we’re talking about it.

As we enter the teenage years of modern crowdfunding, it’s important to understand that for those who do it right, it’s much more than a glorified “donate” button, an extension of your website, or digitizing correspondence. Modern crowdfunding transcends anything we’ve done in the past, and its potential to transform the world is much, much greater than the sum of its parts.

Why People Give

To understand how, we have to first understand the two main reasons why people are motivated to give, and the limitations they present.

The first reason is empathy. Most of us are hardwired with some degree of respect and gratitude for the planet, and compassion and appreciation for its inhabitants—human, animal, vegetable or mineral. This empathy, this kindness, this need to care for our environment and for others, is what drives us to give of our blood, sweat and tears. As the popular definition of philanthropy goes, it is “the voluntary contribution for the common good.”

Here’s the problem.

What happens on a day when we are not feeling kind? When we are stressed, overworked, underpaid or simply suffering from a major “Ebenezer Scrooge” moment? We all have times when there’s so much going on, when we can barely get ourselves and our families through the mess, let alone find the energy to rescue an orphaned sea otter.

What do we do when empathy fails?

The second reason people give is the uniquely human need to create. Deep down in the human primal instinct (intentionally hardwired into us by our own source, some would say) is an insatiable drive to improve the condition of the planet—be it on an individual, communal or societal level. And for those of us who find ourselves moved to create change, how much we give matters—the more we give, the greater the impact, the more we feel human.

The problem arises when we believe we don’t have the means to actually create significant results for larger issues. How can someone like me, living paycheck to paycheck, possibly have what it takes to provide solutions for climate change, animal rights and human trafficking? We begin to doubt the value of our “small” donations. After all, $25 can buy dinner for our families, but how much of a tangible effect will it make for hungry children on another continent?

Even the affluent are not immune. They know they can make an impact, but their efforts are often frustrated by a lack of results. The gaping need can seem even greater than the support they can supply. And with this increasing lack of results, comes a growing level of discouragement. Why would I be compelled to give more next year, when this year’s gift did not achieve its desired impact?

What kind of future are we building when we rely on two unreliable motivating factors? How do we push past two percent GDP of funds going towards charity and arrive at five, six or even seven percent? How do we turn that $390 billion into a trillion?

Crowdfunding Is the Answer

Enter Crowdfunding.

The answer is two different ingredients, both not intuitively aligned with charitable giving, but which are the key to its future. These ingredients are the underlying force that allowed a mother of a child who has a medical condition and no insurance to rally thousands in support within a few days to fund a critical procedure. This is the same force which has inspired countless students to do a 24-hour dance-a-thon to raise millions of dollars for their universities. The forces I refer to are a sense of belonging and collective impact—two motivating factors that shine when we give collectively vis-a-vis crowdfunding.

These feelings of belonging and collective impact are not constrained by the same boundaries of kindness and individual impact.

Why?

It’s an innate human need and craving to belong. And when given the chance to feel a sense of belonging, we will always take it—especially in today’s fractured society. We sit by our computers, smartphones and other nifty devices, looking to connect.

When you as an individual (with the little that you may have) are joined together with hundreds of other individuals as brothers and sisters linking arms and working together to solve a problem, to help a family and to help the community, you are feeding that craving to belong and joining a community of like-hearted souls.

Secondly, giving together provides tangible, collective impact, so that even a struggling parent on a limited budget can give, confident in the fact that their $25 acquires greater momentum by the cumulative power of the crowd. It’s that simple. A little bit from a lot of people adds up. My lunch money can now make the difference between procedure or no procedure for a young child.

When every individual experiences how their gift motivates other givers (both small and large)—something magical happens. We realize that we don’t have to be the kindest, the richest, the most “spiritual” or the most wonderful creature to have walked this earth …We just need to know that we can be the impact we’ve always dreamed of being, without having to sacrifice anything of who we already are.

So, crowdfunding is not just about automating and consolidating your charitable gifts…when done right crowdfunding breeds motivational forces that have the power to transcend charity as we know it.

To put it poetically, these two components have the ability to breathe renewed life into the joy of giving. To put it plainly, without these two components, charitable giving will simply never reach its true potential.