Why should pet retailers care about crowdfunding? Crowdfunding is unique in that it allows everyone to get behind very specific initiatives not for financial purposes, but for a cause. This year, the global crowdfunding industry is set to once again double in size, generating nearly $35 billion in revenue, according to Massolution’s 2015 Crowdfunding Industry Report.
In 2013, LoveAnimals.org was created and launched to support the animal sector with the mission to create an engaging way for consumers to donate. LoveAnimals.org is the only animal focused nonprofit platform that charges no fee and does not retain a percentage of the funds raised by the campaigns. Today, LoveAnimals.org has facilitated more than $1 million in donations to more than 550 campaigns run by animal nonprofits across America.
Crowdfunding is when many people give small contributions to bring an idea or project to life. Online platforms focused on crowdfunding have expanded upon this notion by creating a forum where ideas can rapidly gain momentum and funding as contributors share that idea through social media.
Crowdfunding campaign types can be grouped into two categories, those with no financial return and those with financial return. This article will focus on campaigns with no financial return, also called philanthropic crowdfunding, where nonprofits run a specific campaign and small donors pool their resources to bring the campaign to life. In return, the donor is part of a movement for change. For example, while the average nonprofit crowdfunding campaign raises $3,000, during the heat of summer a campaign to help a shelter fix its broken AC system raised $39,000 through LoveAnimals.org in just 24 hours across 637 donors. This demonstrates that consumers have an interest in donating and represents an opportunity to engage customers in corporate philanthropy. While this is not widely used within the pet industry, it signifies an untapped resource to differentiate your brand.
How to Use Crowdfunding
Today, consumers donate an average of “4.7 percent of their total income to charitable institutions” according to the Mosaic Blog article “The Shifting Paradigm of Philanthropic Crowdfunding” by Loni Coelho. Based on a 2014 study published by Cone Communications, 64 percent of consumers hold corporations to the same standard of charitable giving, stating that they believe brands should be actively involved in solving environmental and social problems.
While most companies are already involved in social giving, only 36 percent of U.S. consumers believe that brands are working hard enough to be part of the solution. This underscores that few brands are getting recognition for their efforts.
Crowdfunding is revolutionary. It not only promotes the corporate social responsibility initiatives of a company, but it puts control into the hands of small donors. Using crowdfunding technology, the company defines the parameters of philanthropic giving and the customers decide which cause or project gets funded with their purchase. Suddenly consumers can decide exactly what project their money supports—even if they only have $10 to give. As an active participant in the company’s CSR programs, the customer is left with the knowledge that the company is meeting the requirements for social good.
The result: a happy and loyal customer.
Where Is Crowdfunding Headed?
“Funding for causes … is serious business” as the crowdfunding industry is projected to yet again double, according to Heesun Wee’s article “Millennials Want to Donate to Charities, Save the World. Really.” With the age of the Internet and smartphones, people “naturally feel comfortable with technology and online payment systems.”
As of a 2014 Pew Research Center study, 74 percent of online adults utilize social media. Without a doubt, many of your customers have either seen someone within their social network promote, are personally following or have contributed to a crowdfunding campaign.
Engaging consumers in the pet sector through social media and encouraging them to donate to a cause of their choice is an untapped opportunity. Now is the time to establish your company as an industry leader while pushing the bar for positive, sustainable change.
To get involved, join PISC by visiting http://petsustainability.org or go to LoveAnimals.org. LoveAnimals.org is launching a new way for the pet industry to participate in crowdfunding with an easy-to-use customized version of its technology that will allow companies to engage customers in deciding what projects to fund.