Providing financial support for organizations benefitting human lives and the planet is something we at UpEffect applaud and encourage. Everyday, we are moved to see thousands of crowdfunding backers and entrepreneurs supporting each other – using their time, money and energy to make great strides towards a more just and peaceful world.
Most of us feel like we have a duty to help alleviate the suffering of others, but a lot of the time we don’t know how to help, and where to spend our time and money. Is giving to a charity enough? Could my money be better spent elsewhere? How can we ensure we are achieving the best possible results with our limited funds?
As we approach the Holiday Season, many families and individuals are considering which organizations to support. While many people think that charities are the best way to make an impact, this giving season you might also want to consider backing a social enterprise crowdfunding campaign.
What’s The Difference Between Charity and Social Enterprise?
Charities exist to redistribute cash from the haves to the have-nots. They work within structures like businesses and schools, and their purpose is to alleviate immediate suffering such as hunger, disease and/or access to fresh water. A charity operates based on donations, redistributing wealthy and working as a middle-man of sorts.
Social enterprise works with the same vision, however operates through innovation and mutually beneficial exchanges. Its purpose is ultimately to improve social conditions and is funded through a business model (rather than pure donation). Social enterprises are driven to not only alleviate the pain and suffering that charities seek to conquer, but also create serious societal change.
Charity delivers food to the poor. Social enterprise builds structures to deliver food and create sustainable systems so that food provision can be maintained within the community. For example, a social enterprise may deliver instructional programs that teach the poor how to grow and sell their own food.
Where Can Your Money Make the Most Impact?
Crowdfunding has changed the way we think about giving. Our only option used to be mailing out a check to send in a donation to a charity or cause. Now anyone with an email can collect crowdfunding contributions. This obviously raises some issues.
On larger crowdfunding sites like Kickstarter or Indiegogo, a person wanting to make a large impact can get lost among the thousands of new campaigns each day. Additionally, the site becomes somewhat of a popularity contest. People are distracted from giving intentionally to solve larger societal problems and instead give to the most heart-string-pulling story.
We addressed this issue by requiring all campaigns on UpEffect be vetted through a social impact review process. In this way, we ensure our businesses are equipped to implement the campaign they are asking money for. We look for the following in all of our campaigns:
• Impact and financial metrics
• Fair trade and clean supply chains
• Team credibility
Our vetting process and dedication to high-impact solutions also make us the preferred choice for crowdfunding backers interested in social enterprise, and social investors interested in organizations with exponential impact.
Additionally, we focus on social enterprise as opposed to charity, because we are dedicated to making larger societal and environmental challenges, and therefore creating the most impact with our backers’ support.
Charity is not self-sustainable as it is reliant on donor funding and is a vehicle for income redistribution. By definition, social entrepreneurship is financially sustainable as it uses a business model.
Charities play an extremely important role in society providing immediate aid and quickly redistributing funds and labor to address problems. However, if you are interested in making a larger societal and environmental impact, you might consider backing a social enterprise crowdfunding campaign. Often times your contribution is rewarded with a product from the company – so a great way to give ethical gifts and make an impact this holiday season.
If you are interested in becoming a part of the UpEffect backer community, check out some of our ongoing campaigns.
[Image Courtesy of Little Difference, now crowdfunding on UpEffect]