Summary Report on Crowdfunding in Social Enterprises in Europe - by Michael Ward - Comparative Research Network
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Success. Summary Report on Crowdfunding in Social Enterprises in Europe Crowdfunding in Ireland by Michael Ward
Atuhor Micahel Ward
Report Italy Guglielmo Apolloni, Andrea
Veronelli & Claudia Cellamare
Our
Report UK John Willcock & Jen Milner
Report Poland Pola Kamińska
Report Ireland Amy Keeley & Michael Ward
Partner
Report Greece Maria Lianou
Report Germany Nathan Bonnisseau & Tara
Bernoville
ship.
Design Martin Barthel
Comparative Research Network e.V.,
ERASMUS + PARNTERHIP SUCCESS Germany
Supporting Critical Funding for European
Social Economy and the 3rd Sector Plan A, Germany
2020-1-DE02-KA202-007404 Stowarzyszenie Na Drodze Ekspresji,
Poland
Published by Comparative Research Network
e.V., 2021 Mullingar Employment Action Group,
Ireland
Disclaimer
The report was edited and published in the Institute of Entrepreneurship Development:
frame of the Erasmus+ Strategic Partnership iED, Greece
SUCCESS. Erasmus Plus is financed by the
European Union. The European Commission RLN U.K. , United Kingdom
support to produce this publication does not
constitute an endorsement of the contents School Raising, Italy
which reflects the views only of the authors,
and the Commission cannot be held
responsible for any use which may be made
of the information contained therein. The
external links in the ebook are being
provided as a convenience and for
informational purposes only; they do not
constitute an endorsement or an approval by
the project partners of any of the products,
services or opinions of the corporation or
organization or individual. The project team
bears no responsibility for the accuracy,
legality, or content of the external site or for
that of subsequent links. Contact the
external site for answers to questions
regarding its content.
The Basics
and publish the necessary laws,
Crowdfunding is not currently
regulations, and provisions to give
regulated in Ireland. Although
effect to the directive by 10 May
the European Parliament has
2021, and to apply those measures
Crowdfunding is
agreed new rules to boost such
from 10 November 2021.
platforms while also
(https://www.philiplee.ie/the-
safeguarding backers.
regulation-of-crowdfunding-in- increasingly
popular as an
ireland-an-update/)
The new rules are intended to
provide a single set of rules on
services, allowing platforms to
Crowdfunding is increasingly
popular as an alternative financing
alternative
financing tool for
apply for an EU passport based
tool for start-ups as well as for more
on a single set of rules and
established small and medium
promote cross-border
crowdfunding activity.
enterprises. start-ups as well
as for more
For start-ups and certain types of
small businesses, crowdfunding is
Due to the continued growth and
development of crowdfunding
seen as a low-risk way of raising
funds without having to part with
established small
and medium
across Europe over the past
equity.
number of years the following
pieces of legislation have been
brought into effect to provide
Some start-ups have found that enterprises.
crowdfunding is a stepping stone
that much needed unified
to other capital. Increasingly, angel
framework for the regulation of
investors and venture capitalists
the sector across Europe:
back promoters who have been
·Regulation (EU) 2020/1503 (the
successful in crowdfunding
“Regulation”); and
campaigns, but crowdfunding has
·Directive (EU) 202004/1504 (the
its drawbacks. Failure rates are high
“MiFID IIAmending Directive”).
– the majority of crowdfunding
The Regulation will apply from 10
projects fail to reach the
November 2021, with member
fundraising goals.
states being required to adopt
Page 3
5Start-ups also find
crowdfunding is a time-burner.
that Social Enterprises/ without.
Success is often down to the 3rd Sector The sector contributes much more
amount of time spent preparing the than this big financial and voluntary
campaign and then promoting and The third sector in Ireland contribution. The non-financial
managing it. Entrepreneurs need to encompasses voluntary work, contributions of the community and
put a lot of information about a community based work, non-profits, voluntary approach includes: the
product or service into the public social enterprises and charities. energy, endeavour, and commitment
domain. This carries risks – your When we talk about the third sector of all involved; the pride and sense of
competitors will know what you’re in Ireland we often use the term belonging the best organisations
doing and you may be forced to non-profit also. It is apparent that inspire; and all the other additional
defend yourself from online critics. there is not much knowledge of this resources contributed (like premises,
sector and its work outside of the equipment etc.) – none of which
Challenges to Crowdfunding sector itself. would otherwise be available to the
state. Our very social-fabric and
·It’s currently unregulated. Ireland’s community, voluntary and vibrant community life, which we
·Still a relatively new topic that charity sector makes a very prize as one of our greatest national
has not been fully used/accepted substantial contribution to society assets, is driven by the community
as a main source of alternative in general. groups, clubs, voluntary
funding by SME’s or third sector. organisations, charities, associations
·No real training being offered on and social enterprises that exist in all
Many of Ireland’s charities are part-
the subject. parts of the country.
funded by the state to provide
·The amount of learning involved
health, social and community
in crowdfunding and how time (REF: https://www.wheel.ie/policy-
services, and they form a critical
consuming a campaign can be. and-research/about-our-sector)
part of Ireland’s social infrastructure,
·There can be a barrier for people
supporting people and
who have a poor digital skillset. Despite a huge variance in the size,
·Lack of awareness of what the communities the length and structure and composition of
third sector is among general breadth of the country. organisations within the sector, they
public. Organisations in the sector make share a few things in common.
available assets and facilities that 1)They are primarily run by volunteers
our health, community and social i.e. on their boards or committees
services could simply not function
Page 4
I2)They all do work for the public crreland, Companies Registration Share of 3rd Sector at GDP is
benefit i.e. no gain or benefit is given Office, Charities Regulator, Insignificant.
to owners or shareholders. Department of Education and Skills
There are almost 10,000 registered and Revenue Commissioners. ·Transaction value in the
charities and a further 20,000+ Non-profit - Ireland’s non-profit Crowdfunding segment is projected
organisations in Ireland’s wider sector has 32,841 organisations. to reach €1.64m in 2021. (0.00045%
nonprofit sector. The sector has About 9,854 non-profits are GDP / 0.0025% GNP)
combined annual turnover of over incorporated as companies, 3,948
€14.5bn, employs over 190,000 staff, are primary or secondary schools, ·Transaction value is expected to
benefits from the voluntary work of 787 more are incorporated as show an annual growth rate (CAGR
over 50,000 volunteer board friendly societies, cooperatives, 2021-2025) of 4.13% resulting in a
members/directors and the work of industrial societies, political parties projected total amount of €1.96m by
over half a million “operational” 2025.
or charter bodies. The rest –
volunteers, (valued by the Central
including thousands of local,
Statistics Office at around €2bn per ·The average funding per campaign
religious or sports organisations –
year). (as of 2018) in the Crowdfunding segment
are unincorporated associations.
amounts to €6447 in 2021.
Employees - The Non-profit Sector
The Benefacts Analysis 2020 report
in Ireland has at least 165,075 paid
into Irelands non-profit sector shows The Image below is taken from a 2018
the following findings: employees. This number doesn’t report into the third sector in Ireland.
·32,841 Organisations include teachers – who are paid It shows how the sector was spilt up
·165,075 Employees directly by Government – or unpaid into the different areas such as
·86,481 Directors/charity trustees volunteers. education, housing, arts, culture &
·€14.2bn Turnover media and sports. This gives an
·€5.9bn State funding Funding - At €5.9bn, Government insight into the impact the third
was the biggest single source of sector has on communities and
This is the fourth annual non-profit funding to the Non-profit Sector in society as a whole.
Sector analysis prepared by 2018. This was 8% of all current ·
Benefacts, using currently available Government spending that year –
data derived from more than 40 but the profile varies a lot from
sources. These sources being Public sector to sector.
Participants Networks across I
Ref:
https://www.benefacts.ie/insights/re
ports/2020/
Page 5
Challenges to the 3rd sector Policies and
Ireland’s charities and community Strategies
and voluntary organsiations make a
big contribution to our national life, No specific designation is given to
but they could do so much more if social enterprises. Charitable
we had an environment that fully organisations in Ireland are
supported their work. regulated by the Charities Act 2009.
The main provisions of the Charities
The community, voluntary and Act 2009 came into effect on 16
charitable sector needs Government October 2014. The Act established
to produce a comprehensive the Charities Regulatory Authority
development strategy for the sector as the body to ensure compliance
that includes a sustainable funding with the provisions of the Act. The
model. Government is the single Act reformed the law on charities in
biggest funder of charities in Ireland, Ireland to ensure greater
and increasingly Government
accountability and transparency
funding is awarded through
and to ensure that charitable status
“commissioning” services – so we
is not abused. The Act also aims to
need Government to ensure that
enhance public trust and
commissioning models support the
confidence in charities and create
community, voluntary and
transparency across the charities
charitable approach.
sector.
Charities face governance,
managerial and operational A report from the crowdfunding
challenges just like other types of website GoFundMe about donations
enterprises, and we need to ensure made through it globally in 2019
that the supports that are available shows Ireland was the most
to commercial enterprises are also generous country overall, with the
available to third sector. Third sector US second, Australia third and
also face increasingly intense Canada fourth, based on the
regulatory requirements, and we number of donations per capita.
need Government to review the
regulatory and compliance (REF:
frameworks that organisations face https://www.thirdsector.co.uk/uk-
to ensure they are as streamlined as fifth-generous-nation-says-
possible. gofundme-crowdfunding-
platform/fundraising/article/166852
(REF: https://www.wheel.ie/policy- 9)
and-research/about-our-sector )
The definition of crowdfunding is:
Not protected by the Central
the practice of funding a project or
Bank’s SME Regulations.
venture by raising money from a
Risk that unprotected
large number of people who each
intellectual property could be
contribute a relatively small
copied by others.
Risk of payments not being amount, typically via the internet.
processed promptly by the If we think of fundraising which we
online crowdfunding platform. see a lot of in Ireland for charities
and non-profits as a source of
(REF: crowdfunding then that is very
https://www.arthurcox.com/knowle much integrated into the third
dge/crowdfunding-should-it-be- sector and how they raise money.
regulated-department-of-finance-
begins-industry-consultation/ ) Img source:
https://www.2into3.com/wp-
content/uploads/2020/10/GivingIrel
andReport2020final.pdf
Page 6
In 2018, giving increased 11%, Which other
indicating an acceleration in growth reports/projects/research on
as Ireland’s culture of philanthropy crowdfunding in third sector exist?
develops and fundraising becomes
an increasingly expert field. Benefacts third sector report 2019:
https://www.benefacts.ie/2019/04/17/
benefacts-latest-third-sector-
analysis/
Analysis and insights on the funding
of the not for profit sector 2018:
https://www.2into3.com/wp-
content/uploads/2020/10/GivingIrela
ndReport2020final.pdf
Which bureaucratic/tax rules have to
be considered for crowdfunding?
https://www.charitytaxback.ie/#
By reclaiming tax on your donation,
an authorised charity can increase
the donation value by up to an
additional 45%.
It only takes a couple minutes to
complete the form required to
reclaim the tax.
Page 7
Education and The content includes: Pros and cons
on crowdfunding, different types of
They make a wide range of affordable
unaccredited and accredited training
Training crowdfunding, which platform is available to organisations and
suited to your campaign, how to individuals in the sector and promote
Which other crowdfunding training build a reward system, how to the highest standards in the paid and
exist? create a pitch, creating a campaign unpaid work that is done within the
video, maintaining momentum, organisations in the sector.
CRUCIAL Project – An Erasmus + maximizing social media and after a
funded project. The project was a 2
year long project
campaign ends. Crowdfunding
The course also features some Platforms
A how to set up your own accompanying videos for each
crowdfunding campaign aimed at modules in the course. Which kind of projects do the
anyone interested in crowdfunding. crowdfunding platforms i support?
The crucial course is all available What courses for 3rd Sector
online for free to be used by anyone https://www.idonate.ie/ - the
organisation exist and who is
who wants to learn more about fundraising platform setup in 2011
delivering them?
crowdfunding and can also be used as a free service to assist charities in
in a classroom setting. fundraising. Their aim is to provide
The Wheel provide a great deal of
tools for both charities and
courses online and in person for fundraisers to help them raise vital
The course brings a user through all
the steps you have to go through to people working in social enterprise, funds.
develop a successful campaign. charities and non-profits. The Wheel
are Ireland’s national association of Fundraisers can easily create
How are those trainings performed? community and voluntary fundraising pages through the
What is their content and who is organisations, charities and social iDonate website. The platform
delivering them? enterprises. They are a registered allows family and friends donate to
charity and are unique in their role their chosen charities.
The training mentioned above is as a ‘one-stop-shop’ for anything
independent online learning. It can related to the charity and non-profit iDonate also provides promotional
also be used in a classroom setting sector. tools to help fundraisers promote
with the available downloadable their fundraising pages.
content.
Page 8
IDonate is a donation based via their own social media channels.
crowdfunding site. Users can ask iDonate.ie process all donations in
backers to pledge money to their Euro currency.
cause. The websites has various
projects such as people raising At the start of each month, iDonate
money for their own or a family transfer funds raised in the previous
member’s medical treatment to month directly to each
projects looking for sponsorship for cause/charity.
bike rides, marathons and long
distance walks to raise money for There is no action needed from the
charities. fundraiser for this to happen as the
process is carried out by iDonate,
https://fundit.ie/info/about/ - Fund it the cause/charity can then view
is an all-island crowdfunding detailed reports of the exact
website for Ireland’s creative amount raised as well as all
projects, giving everyone the power donations received.
to help good ideas happen. Fund it
is run by Business to Arts, a not-for- Fees can be covered by the donor,
profit organisation working to the transaction fee (3%) & our site /
support resilience and admin fee (2%) which means your
transformation in the cultural sector cause gets 100% of the donation.
through research, innovation and
partnership. What kind of support and training
do the platforms offer for their user?
Fund it is designed to support
greater individual giving to the All platforms mentioned have a
creative sector and facilitate pre- detailed FAQ pages with the bigger
sales of creative projects. one such as GoFundMe having a
Crowdfunding serves to strengthen YouTube page with how to videos.
the bond between a creator and No real training course exists for this
their audience which offers the platform or for any platform in
potential for wider-ranging, long- Ireland.
term relationships.
https://ie.gofundme.com/ - Global
platform with campaigns in Ireland.
GoFundMe makes it incredibly easy
to raise money online for the things
that matter to you most. Setting up
a fundraising account takes
minutes. People raise money for just
about anything, including medical
expenses, education fees, volunteer
programmes, youth sports, funerals
& memorials, and even animals &
pets. Over $5 billion has been raised
by GoFundMe users.
How are campaigns structured and
run?
I Donate is a donation based
crowdfunding site.
Users can set up a page for their
charity and this can then be shared
Page 9
Crowdfunding The story: .Practice 2 Crowdfunding in NGOs
Practices If the last 12 challenging months
have shown us anything, it is the https://www.idonate.ie/fundraiser/114
Practice 1 Crowdfunding in importance of our outdoor spaces 02099_darkness-into-light-for-pieta-
education and especially our gardens. house.html
Callystown National School’s
https://www.idonate.ie/fundraiser/11 “Garden of life” will be a wonderful Donation based campaign.
405620_callystown-national-school- creation and a positive addition to This is campaign to raise fund for
-clogherhead---garden-of-life-.html the lives of our pupils, at a time Pieta House an Irish charity that
when it is most needed. Our pupils provides free counselling services to
Donation based campaign. anyone who is suffering with ill
have shown great resilience this
A campaign for a primary school mental health and people bereaved
year and the building of this garden
who wish to create a “Garden of Life” by suicide.
will be a celebration of this
for the pupils of the school and for
resilience and a positive legacy that
future generations to enjoy. They are Pieta house run an annual sunrise
will be enjoyed by many future
looking to raise a total of €35,000 walk once a year that helps raise
generations of Callystown NS pupils. funds for the organisation.
for the project. To date they have
The design for the garden has been Unfortunately this year, due to social
raised €6,249.55 for the project and
generously donated by Bloom gold distancing requirements and in line
have until Feb 2022 to raise all the
funds. medal winning designer Andrew with Government restrictions,
Dunne from Andrew Christopher supporters of Darkness into Light
Challenges here could be the Garden Design. However, the cannot gather together at usual
amount of money being raised is building of this project will be venues for the event. Instead,
quite large and the school being in a attributed to the generosity and organisers are asking people to take
small community in rural Ireland, help from all the friends of part locally at a time and location
their donors will likely be people Callystown N.S. and indeed friends that best suits them and are
based in that area and others linked of Clogherhead Village found all suggesting people don yellow t-shirts
to the school. Involvement will over the world too. We need your for the event.
come from parents of kids in school, help and all your donations are
teachers, past pupils and those who gratefully welcomed, so please give Challenges for this campaign or
live in the catchment area to the what you can. “Níl neart go cur le campaigns similar to this has been
school. chéile”, working together we will Covid and the restrictions put in
make this happen. place that don’t allow the normal
Page 10Rkinds of fundraising normally Funding just one cobble will help active retired, Scouts, Foróige, and
carried out. Although this campaign raise some funds to do the local schools. They plan to begin
did not reach its target goal, the landscaping, create community renovations in January, and hope to
campaign still will receive all the gardens, play areas for children and open the doors of the coach house in
funds raised so far. to place supersize replications of September 2021.
some of our amazing objects, that
Practice 3 Crowdfunding in social are usually “hidden” in collection The overall cost of the project is
enterprises cases, for all ages to play on and €365,000. The renovation is 75%
enjoy. Engraving the Cobble means funded thanks to the generous
https://fundit.ie/project/fund-a- you can commemorate someone support of LEADER, Cork County
cobble special.” Council, and a charitable trust, plus
their own investment. The €15,000
Reward based campaign. Challenges are down to Covid raised here will go a long way
changing how we normally donate towards putting a new roof on the
Fund a Cobble, create a Museum in money to causes, there may be arts centre.
a Garden wants to honour the debt people who wish to donate but find
of all of us to the frontline heroes themselves without the skills to nav
and heroines of Covid19 and to
forever remember it's victims with a Practice 4 Crowdfunding in typical
brand new free and open to all context
Museum in a Garden.
https://fundit.ie/project/an-arts-
“We are aware of the dangers of centre-for-east-cork
social isolation to our health and
wellbeing and how the importance Donation based campaign.
of community has grown in recent
months; many of us have also Greywood Arts is creating a rural
discovered the joy of gardening and arts centre for East Cork are raising
open spaces. As we all emerge from funds to transform a derelict coach
quarantine, Hunt Museum in the house in the centre of Killeagh
Garden provides an exciting, village into:
community driven space for A learning space for art classes
everyone to enjoy. Our award and workshops
winning designer, Nicola Haines has Studios for local artists
extensive experience of delivering A large flexible space for cultural
on time and within budget and she events and exhibitions
will be working with volunteers
from the local Men’s Sheds, Limerick Growing the space will also increase
Mental Health Association, Team the scope of their community
Limerick Clean-up, local schools and programmes, where they
Enable Ireland.” igate the websites. collaborate with groups like the
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