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A UK FinTech with a social purpose

Crowdfunder.co.uk was founded in 2014 and claims to be the UK’s number one rewards-based crowdfunding platform, also working with corporates to help them leverage their philanthropic investments

In just under six years, Crowdfunder.co.uk has helped raise more than £100 million for charities, businesses and community projects across the UK as well as working with several corporates – including Santander and RBS NatWest – to distribute grants.

At first glance, Crowdfunder.co.uk looks like any other crowdfunding website but there are important differences. The first of these is that the site actively exists to attract what Duncan Parker, charity and philanthropy director of Crowdfunder.co.uk, describes as “projects that matter”. He explained: “People come to us and place their project if it is of social, environmental or political importance. Other projects do slip through the net. We don’t curate them in that way. But the crowd just wouldn’t support them. The crowd that we have is a crowd that cares about things that really matter.”

Duncan Parker, Charity & Philanthropy Director, Crowdfunder.co.uk

The site is a reward-based crowdfunding site, which means that most of the projects will offer some form of incentive for support. “Say you want to create a business that brews beer out of waste bread. And you would part me with my money by offering me some free beer. And because I really care about food waste, I’ll support you and I really like getting beer, say, that might be one of the ways you incentivize people,” said Parker. He cited another example that promised a reward of conducting a Philharmonic Orchestra in return for support to a music development project.

These are projects with a social purpose, and this is not a small business. Since its establishment, Crowdfunder.co.uk has raised £100 million and very shortly will mark its millionth personal investor. It has been successful in another way too: in garnering support from some of the largest corporate entities in the UK to partner their philanthropic efforts.

“It is a way that corporates can engage in philanthropy and engage in their corporate social responsibility agenda,” said Parker. “We have lots of businesses who rather than go direct to charity and to good causes, place their money on our site, then they back businesses or charities that the crowd thinks are a great idea. “So if someone comes up with a wonderful solution to an issue of social investment, the crowd starts supporting it and for every pound that is pledged, the corporate matches it. And their brand is seen next to the issues that they find important.”

Santander, for example, allocated £200,000 worth of funds to the matched funding commitment aimed at social enterprises and community projects that use the platform to raise funding. With those funds fully committed, that means the backed enterprises benefited to the tune of £400,000. Ahead of the UK General Election in December 2019, there was activity on the site from political parties and MPs raising funds but also from people attempting to hold their prospective elected leaders accountable.

A campaign called Led by Donkeys specialized in highlighting each occasion a politician said something incongruent with what they had said in the past. It proved to be a popular project, as Parker observed: “Literally when they launched their campaign, every time you hit refresh, it had gone up by thousands of pounds, because our crowd is really engaged in wanting to see the world being a better place.”

Back Her Business

An initiative supporting female entrepreneurs across the country was established by Royal Bank of Scotland and its NatWest unit in March 2019.

The Back Her Business programme was developed in partnership with Crowdfunder.co.uk and forms part of the bank’s ambition to reduce the entrepreneurial gender gap and inspire and support a further 400,000 female-led businesses across the UK by 2025. Though most of the funding will come from the crowd, the bank will provide a top-up of £1 million a year across the UK and will be offering up to 50% of an individual’s fundraising target, capped at £5,000, for successful projects.

The initiative is not equity crowdfunding. Like all of Crowdfunder. co.uk’s projects it is donation and reward based – for instance, funders will be given a discount towards products or services in return for their donation in some instances. Speaking of the site’s match funding programme, Parker said: “It’s a really great way for brands not only to distribute their philanthropy in an intelligent way by looking at what the crowd thinks is a good idea for the community, but equally for their brand to be recognized within those communities.”

Most of the business projects that come to the site are very early stage start-ups and, as you might expect, tend to be community oriented, covering issues such as homelessness to food, poverty and food waste. “There are two types of communities in our eyes,” said Parker. “RBS NatWest obviously wanted to give back to the communities where it makes a profit, to show it cares about those towns and cities. So we are able to distribute in that way, geographically, but we can almost distribute thematically. RBS NatWest wants to tell its communities that it cares about female entrepreneurs – only one in- five businesses in the UK is owned by a woman – and as part of the bank’s corporate social responsibility agenda the site allows the bank to reach people it would never normally find.”

Back Her Business offers financial support but by using the bank’s Entrepreneur Accelerator programme, its Women in Business proposition and its industry experts, the initiative also packages training and coaching, networking opportunities and local events to help concepts reach the market and grow.

Leverage philanthropy

The establishment of Crowdfunder.co.uk was led by the site’s CEO Rob Love, whose career spans the inception of the Big Brother online platform through the ethical food brand River Cottage. Parker explained: “It was really birthed out of wanting to do something with more ethics involved than they’ve been involved in before… what they wanted to do was the stuff of the heart. They realized that they had tapped into something very, very important. And we’ve been really successful at bringing social enterprises and individuals who want to change the world to the site.

“The real focus now over the next few years is really to do the same for charitable organizations, which is why we’re having those conversations with corporates to say, look, if you want to be philanthropic, here’s a really smart way to do it. One, we leverage your money to the power of two or three. So, your impact is greater on the communities or the issues that you want to have an impact on. But also, we can find you really cool projects, things that the crowd think are really good. And [the corporate] gets that social verification, that social proof that not only is this an issue that people care about, but here’s a solution that people think will work and will buy into.” Crowdfunder.co.uk’s creators believe they have a platform that is “very transferable” and there has already been interest in taking the concept into new countries. However, the company’s focus for the next couple of years will remain in the UK. “There’s so much more that we can do in the UK, I think that is our focus for the next year or so,” said Parker.

To hear Duncan Parker in conversation with Robin Amlôt about the background to Crowdfunder.co.uk and its plans for the future, click here.

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