The outbreak of the pandemic has had far-reaching and often devastating consequences for many, especially in terms of its financial impact. As lockdown regulations prohibited workers from either working their usual hours or being able to work at all, thereby significantly impacting earnings, the necessity arose for South Africans to come together and take personal action. While government measures have been implemented to address this economic fallout, personal initiatives, especially the practice of crowdfunding, have proven to be an effective addition in helping to lessen this impact.
Crowdfunding refers to the practice of collecting small donations from a large number of donors and is often run through the internet. Throughout the pandemic, these campaigns have often been facilitated through online crowdfunding platforms, such as Feenix, Thundafund, Uprise Africa, Jumpstarter Crowdfunding, and BackaBuddy. A content piece on crowdfunding, “The rapid rise of crowdfunding during a global pandemic”, released on HWB communications, details how these platforms “have all seen an increase on their platforms since the announcement of the lockdown”. For instance, according to the piece, “BackaBuddy saw a 32% increase in the number of campaign submissions and a 72% increase in the number of individual donations on their platform. Another online charity organization, GivenGain, saw donations climb by more than 60% year-on-year since 1 April”.
“Crowdfunding refers to the practice of collecting small donations from a large number of donors“
Leana de Beer, CEO of Feenix and contributor to this piece, states, “the very existence of these crowdfunding initiatives speaks to the principles of social responsibility and compassion at a time when South African businesses and individuals are facing a great deal of uncertainty and fear”. In an effort to address the needs of students during this time, Feenix launched its #CapTheGap Response Fund. This fund was started to raise R6.6 million, and used to buy laptops, data, and food vouchers for the final year and post-graduate university students. Reportedly, this fund has been able to amass “a total of R 3.1 million […] by corporates and individuals”, which has already been used to assist 294 students. De Beer attributes the success of Feenix’s efforts to the fact that “[Feenix is] passionately invested in the right of access to education for students, which we believe should not be dependent on wealth”. De Beer further states that, since the company was started in 2017, Feenix has “raised a total of R39.52 million, which has positively affected the lives of 1181 students” and that they were able to do so “[with] the support of corporates, SMME businesses, and individuals”.
Other online platforms which turned to crowdfunding as a way to address the fallout of the pandemic, are UP-related meme pages, whose follower bases enabled them to connect with students in need and encourage those who were able to, to help raise necessary funds. One such meme page is LifeAtTuks (@life_at_tuks). This account has managed to raise more than R126 000, which has been used to help students who were negatively financially impacted by the lockdown and who contacted the page, seeking help to afford necessities like food and rent. The administrators of the page state that “[all] donations come directly from [students] who follow our page. Some students donate R50 [and] some have even donated R5000”. Additionally, their holdings company “has donated over R35 000 to the initiative” and they are in contact with other businesses to do the same, although they “haven’t been successful in that department yet”. This page has “also ran a data [initiative where] students transferred [and/or] bought other students in need of data”. The administrators further state that they will continue their initiatives for “as long as it’s needed” and that “[the campaign will] most probably run throughout the pandemic as it has crippled most communities”.
“…a well-run, purposeful, and thought-out campaign is essential to make crowdfunding a success.“
These initiatives serve to prove that crowdfunding can be a highly effective means to raise funds. According to Forbes, in the article “Top 10 benefits of crowdfunding”, some of the potential advantages of crowdfunding include its ability to provide capital, serve as a marketing tool, introduce prospective loyal customers, and offer proof of concept. In another article, Forbes also lists the “Six hallmarks of successful crowdfunding campaigns”, naming, amongst others, a “short, sharp and clear” pitch, the inclusion of testimonials and validation that builds confidence, and incentivizing your audience to help, as attributes of effective crowdfunding campaigns.
Aside from the benefit to those running the campaign, crowdfunding also provides willing donors the opportunity to contribute to good causes and raise awareness for those in need.
Crowdfunding is, however, not without its drawbacks, as a NI Business Info article, “Advantages and disadvantages of crowdfunding”, highlights, citing the fact that “not all projects that apply to crowdfunding platforms get onto them”, the need to “[build] up interest before the project launches” and the risk of “damage to the reputation of your business” as potential disadvantages.
Therefore, a well-run, purposeful, and thought-out campaign is essential to make crowdfunding a success. As De Beer states, “the success of crowdfunding proves that South Africans are stronger together and that there is so much more that unites us than divides us. Now more than ever, through mobile phones and laptops, everyone can play their part in rebuilding our economy”.
Illustration: Giovanna Janos