How Crowdfunding is Changing the Lives of Refugees

Being an idealist is not easy in this world. At times remaining optimistic in a world fraught with pessimism seems possible only for the fool-hearted. Despite this, I have never been more encouraged than today that we are approaching some massive improvements, beginning right here in our own communities.

When people claim that things will never change, what they are really saying is they feel powerless to affect change. No matter which global challenge concerns you the most, I’m sure you have thought to yourself at least once, “I am just what person, what can I do?” And thus, we remain stuck in the endless cycle of helplessness, blame and frustration as we watch the world’s troubles rapidly devolve.

After spending 10 years working and volunteering for non-profits and NGOs, I eventually left broke, frustrated and traumatized. I knew there had to be a better way to make the large-scale impact that our biggest challenges require. I spent years searching for the most effective and sustainable methods, and found that social entrepreneurship was transforming communities and markets globally.

“To change something, build a new model that makes the existing model obsolete.”

― R. Buckminster Fuller

REstart was conceived during the UnSchool Fellowship in Berlin, October 2016. During this week-long deep dive into disruptive design, systems thinking and human-centered design, the founder and our fearless leader, Leyla Acaroglu, boldly challenged us to reject the belief that the future is pre-determined and encouraged us to get busy figuring out how to disrupt existing systems. It was a moment my idealist self had been waiting for and the rationalization I needed all along. In fact, no one knows what will happen tomorrow and thus, each of us and all of us have the power to impact the future.

At the end of our week in Berlin, as in all UnSchool Fellowships, we were presented with a 24-hour challenge by Vinzenz Himmighof, co-founder of SINGA Deutschland. He told our cohort:

 

“There are so many incredibly talented, driven and experienced entrepreneurs among us, who happened to have come to Germany as refugees. Of all the challenges displaced entrepreneurs face when starting up in a new country, the most difficult to surmount is lack of access to capital. How can we design a solution to this challenge?”

Thus, the concept of local crowdfunding for displaced entrepreneurs was conceived. Approaching two years later, we are ready to share our story and platform with the world. Though crowdfunding is not new, neither is the migrant crisis. Despite this, it often takes some time to introduce the concept of local crowdfunding to a new audience.

Crowdfunding is the most obvious disruption of the polarization of wealth and power. We see new applications popping up globally — NewStorycrowdfunds homes in less-developing countries, Watsi crowdfunds healthcare for patients in emerging markets, UpEffect crowdfunds social entrepreneurs tackling problems across the world.

 

The surge of crowdfunding onto the scene in recent years has been a game-changer for how we ask for and offer support to the makers and creators of the world. No longer required a large collateral, high credit score and a massive amount of social capital, anyone can access the resources necessary with enough authenticity, ingenuity and proof of concept (and of course a strong network never hurts).

Crowdfunding is a massive global market.

Crowdfunding was a $16.4Bn industry in 2014.

And growing.

The crowdfunding industry is projected to grow to over $300 billion by 2025.

Milllenials love it.

CrowdfundingExpert explained demographic preferences in investing as such:

“The nature of equity crowdfunding platforms could also appeal to Millennials who have a disproportionate desire for their investment decisions to reflect their social, political, and environment values. According to a survey by US Trust, Millennials are more likely to accept a lower return or a higher risk related to an investment if it’s in a company that has a positive impact on society and the environment, while less likely to invest in a company that has a negative impact on society and the environment despite potentially large monetary returns. Many crowdfunding platforms reflect various values; for example, the largest funded campaign on Indiegogo, An Hour of Code, funds an introductory hour of coding to students worldwide.”

Yet local crowdfunding is relatively new.

There are hundreds, if not thousands of crowdfunding platforms, only a handful bring the focus to local communities.

Spacehive in London gives local residents the opportunity to support civic initiatives, such as the transformation of abandoned spaces into community centers. Sadiq Khan, Mayor of London, said that Spacehive offers “a chance for all Londoners to take part in the regeneration of their neighbourhoods from the grassroots up.”

Tudigo in France is one of the first local-crowdfunding platforms for small businesses to find the funding they need to start through the support of the local crowd, people who have a direct interest in these businesses.

Thus, while some have begun to explore applications for local crowdfunding, no one has ventured into working with displaced entrepreneurs.

We have all of the resources we need to unleash the hidden potential of displaced entrepreneurs.

But until now, there has been no safe, effective or sustainable way to bring them together.

REstart democratizes start ups, beginning with the community with most wasted potential and the deepest drive to succeed. At the second annual Katapult Future Fest in Oslo last month, Rumman Chowdhury, global leader on AI and humanity, break it down during the festival’s opening: “We don’t have a resource problem — we have a redistribution problem.” In other words, it’s about finding the most effective ways to disrupt current financial flows in a way that benefits all of us.

 Our model takes charity one step further and creates jobs for social good.

Though giving to charity is filled with good intentions, we have recently begun seen the unintended consequences of the aid model. For example, giving food hampers local farmers and all drowns them out of the market. Sending old clothes and mosquito nets ensures that local producers are not able to compete with the market saturated by external actors. Of course there are immediate and emergency needs in many parts of the world, including after natural disasters. We can begin the transition by balancing the growth of economies from within, rather than from the outside.

What’s more, charities remain bound by their own funding sources, and have to spend a massive amount of resources simply to keep the donations coming in.

Statistics show that refugees are more likely than Danes to engage in entrepreneurship and furthermore, entrepreneurship is a shortcut to enter the workforce for many who have difficulties entering the labor market.

A vast majority of crowdfunding platforms are driven by profit, not purpose. By channeling our revenue into the comprehensive vetting, training and support of our clients, we provide refugees with the resources they need to REstart.

Entrepreneurs build strong local economies.

Small businesses are the drivers of economic growth. They create more jobs, more taxable income, and spur more spending.

Supporting displaced entrepreneurs to (re)start small businesses makes economic sense and benefits all of us. In the context of demographic ageing, a key challenge for Denmark is increasing the long-term labor supply.

According to a recent EU Economic Brief:

“There is a potential to increase labour supply even further by strengthening the labour market participation among several groups. In this vein, the European Commission recommended in 2014 that Denmark takes steps to improve employability of people at the margins of the labour market. Among them are immigrants, low-skilled workers and the disabled.”

Crowdfunding comes with unique benefits.

Crowdfunding provides built-in market validation and mobilizes a supportive consumer base organically, even before launch.

On Viral Growth: “Crowdfunding is inherently one of the most social categories of alternative financing, with the benefit of viral growth for specific campaigns. Groups of fans, such as those that funded the Veronica Mars movie on Kickstarter with $5.7mn, or early adopters, such as those that funded Oculus Rift’s first virtual reality headset with $2.4mn, have an incentive to share the campaign across their social networks and encourage their friends to join the campaign. Many campaigns can be easily shared owing to the nature of the campaign’s story and to show the altruism of existing supporters. Word of mouth serves as a particularly important driver of growth, especially among the Millennials generation. According to a Blackbaud survey, 65% of Millennials are “very comfortable” sharing the charities they have donated to, compared to 56% of Gen-Xers, 45% of Boomers, and 47% of Matures.”

On Network Effects: “Crowdfunding platforms benefit from strong network effects whereby the value of the platform is enhanced as both campaigns and funders grow. The availability of campaigns drives potential funders to the platform seeking projects to back. Funding a campaign in turn incentivizes backers to leverage their social networks to help projects meet their goal, improving campaign success rate. The more projects funded draw more entrepreneurs and other creators to start campaigns on the platform, creating a virtuous cycle of growth on both sides of the marketplace.”

No one can ever again say, “I’m just one person– what can I️ do?”

We are each just one person, but together we are many. The power of pooling our resources together increases our impact and reduces our costs.

When you consider that you are just one person in a world of 7 billion, it may feel quite easy to give up any chance of affecting change outside of your own life. However, when you consider that if all 7 billion of us decided to work together using the resources we already have to build the future we wish to see, there is nothing we couldn’t accomplish together.

It gives you a say in your local community’s business landscape. Looking for a local bakery? A new type of restaurant? A new service? Here is your opportunity to make it happen.

Funding displaced entrepreneurs offers one long-term solution to impact the migrant crisis.

Of course this is only one small solution to an extremely large and complex puzzle. We understand that this is certainly not the only solution and will alone not be the only change we need to build a sustainable future. However, putting refugees at the center of focus allows us to ask displaced persons, “What do you need?” and then meet those needs. It’s no longer about what non-refugees want to do for refugees– it’s a partnership between the displaced and the non-displaced that builds collaborative networks and gives every person a meaningful way to engage.

Social Entrepreneurship offers opportunities charity can’t afford.

When I worked in NGOS, I️ spent way too much time on doing the stuff that we had to do to get the money that would allow us to do stuff we intended to do.

I️ won’t sacrifice the meaning in my work, but I️ also can’t sacrifice the money. Social entrepreneurship is a way to drive consumer behavior, create new options that benefit us and our societies, that don’t continue to reinforce the old system that got us in this mess in the first place.

Social enterprises are positioned to change the underlying systems that contribute to the degradation of our planet and our humanity. As consumers, we each have a sphere of micro-influence that we use to convey our values. In a capitalist economy, we vote as much with our purchases as we do at our polling places.

Don’t want to contribute to child slavery? Buy a fair phone. Don’t want your pension to directly contribute to Amazon deforestation? Use an ethical pension fund, like Penstable in Denmark. Don’t want your money exploring coffee farmers in South America? Buy fair trade coffee.

Want to support displaced persons to build a new life while giving back to the local community? Back a campaign on REstart.