Crowdfunding is a systematic way of raising funds through a large number of people online. Before now, it was an unpopular fundraising system; however, these days, owing to many cashless policy reforms and policies, it has become a global and popular means of raising funds.
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My view on sourcing funds online
The cashless policy reforms have made it seamless for such systems of sourcing funds, which for me is very good. The non-profit organisations and many charity organisations use crowdfunding these days to fund public projects or support some social work. The funds may be for capital projects within societies, war-ridden states, or even individuals seeking huge funds to cater for life threatening challenges. So, for me, the challenge is not the crowdfunding, but rather the systems put in place to manage the funds.
Recently, we have heard several stories about how some countries and their citizens have been banned from using a popular online platform for crowdfunding. Reasons for this include irregularities and reports filed by some donors of the fund. Abuse of funds, lack of transparency, fraudulent activities noticed on such accounts, and high handedness by the managers of the fund.
With such irregularities mentioned above, it will be difficult to entrust my funds to the care of such systems. However, it is said that it is not all eggs that are always bad. There are still good people; hence, there would also be good fund managers who can be trusted. People with integrity and a trail of accountability. The big question now is how they can be found and what the green flags are that will confirm them as good.
Green Flags to consider before putting money in a crowdfunding project
First to consider is transparency; if the online reviews confirms that the platform is genuine, I can make advanced search by contacting some donors to confirm their level of transparency. Again, I will look out for a regular display of their financial records or their willingness to share the same with individuals willing to donate their funds into their coffers.
Furthermore, regular updates on their income and expenses will be a green light into their activities. This is because many of them do not want to be held accountable for any breach, so they hide all their activities and will only present to the public what they want to.
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So, for the crowdfunding system to be more transparent, it will start from the managers. They must be people of integrity without any criminal or fraudulent linked activities. They must be humble and able to account for funds entrusted to their care regularly. They must be open to public scrutiny and accountability. Again, there must be policies, rules, and regulations that will guide such systems where every labour is rewarded handsomely, and consequences clearly spelt out for rascality and negligence.
That way, there will be a win-win balance between donors and the managers where everybody is on the same page at every giving step and direction.
Thank you for stopping by.