Crowdfunding platforms as a tool for additional financing of non-profit organizations

Abstract

The article analyzes crowdfunding as the method of innovative solutions outsourcing as well as the main tool of fundraising for non-profit organizations in terms of developing IT technologies and global access to Internet networks. Crowdfunding opens prospects for non-profit organizations in the mobilization of tangible and intangible resources under the circumstances of rapidly growing competitive markets. The development of information technologies and computer networks gives an opportunity to create new forms of financing as well as promote projects that allow connecting with like-minded people around the world. Moreover, it facilitates fundraising coordination. Crowdfunding, due to its online form, conducts its activities through social network sites and specialized crowdfunding platforms. The latter gives its users an opportunity to carry out financial collections in order to cover the budget of the corresponding project. Such ideas of financing are based on the presentation of the beneficiary’s project and idea to Internet users via one of the crowdfunding platforms, where the amount needed is indicated for the implementation of the project and the duration of the collection. The phenomenon of crowdfunding platforms is considered as fundraising for projects, which are performed by non-profit organizations due to a big number of payments from donors interested in a project. In other words, it is a form of financing of different types of projects by both local and global communities using advertising and specialized Internet portals. Crowdfunding platforms, as the new alternative of financing for non-profit organizations, can be used in many different ways, however, not all companies, as well as projects, fit into that. Fundamental principles of crowdfunding include openness, accessibility, progressiveness, and truthfulness of the information. The situation in the Ukrainian market of crowdfunding platforms was investigated and some of its functioning attributes were revealed: crowdfunding, if used strategically, helps non-profit organizations reach interaction, informs about jobs, shares messages about the organization, and expands a donor base in order to increase general funding. Therefore, non-profit organizations which activities are related to crowdfunding win due to popularization, advocacy, and increasing trust in crowdfunding platforms. It serves as a fundraising method for a wide range of stakeholders, including beneficiaries, board members, employees, and donors.