What are crowdsourcing and crowdfunding?

Remember the post about predictions for philanthropy development in the Balkans? Well, one of the predictions was “New mechanisms and tools will be developed as to make giving easier. General increase of e-transactions will influence increase of e-philanthropy (online giving)… Promotion of crowdsourcing and crowdfunding mechanisms will increase.”

So what exactly are crowdsourcing and crowdfunding? Well, the source of all knowledge (also known as Wikipedia) says:

“Crowdsourcing is a type of participative online activity in which an individual, an institution, a non-profit organization, or company proposes to a group of individuals of varying knowledge, heterogeneity, and number, via a flexible open call, the voluntary undertaking of a task. The undertaking of the task, of variable complexity and modularity, and in which the crowd should participate bringing their work, money, knowledge and/or experience, always entails mutual benefit. The user will receive the satisfaction of a given type of need, be it economic, social recognition, self-esteem, or the development of individual skills, while the crowdsourcer will obtain and utilize to their advantage that what the user has brought to the venture, whose form will depend on the type of activity undertaken The term “crowdsourcing” is a portmanteau of “crowd” and “outsorcing,” coined by Jeff Howe in a June 2006 Wired magazine article “The Rise of Crowdsourcing”.

In other words, you need something to get done; you publish open call via Internet and people interested in the task and interested to help will finish the job for you. You get lots of people working on solving a problem/task and they get to develop their skills, to help and/or to be recognized for the work they’ve done/solution they came up with; therefore it’s a win-win situation. An interesting video that that explains crowdsourcing/crowdfunding and also shows that crowdsourcing dates back to 1700 (there is nothing new under the sun :)):  


Crowdfunding is pretty much the same, only used to get/contribute funds:

“Crowd funding (sometimes called crowd financing, crowd sourced capital, or street performer protocol) describes the collective cooperation, attention and trust by people who network and pool their money and other resources together, usually via the Internet, to support efforts initiated by other people or organizations. Crowd funding occurs for any variety of purposes, from disaster relief to citizen journalism to artists seeking support from fans, to political campaigns, to funding a startup company, movie or small business or creating free software.”

In the last couple of years, crowdfunding has become the new way for philanthropy development. There are dozens of web sites out there that invite donors to contribute to a cause or project that non-profits collect funds for. Although the practice of sharing cause/inviting contributors through Internet has somewhat already spread in the region it is done mostly through Facebook – for now the attempts to attract donors and collect funds exclusively thru Internet and through special websites are almost non-existent. One of the reasons probably lies in the fact that on-line giving is still at its beginnings.

Still, we can start to prepare for what is going to come! If you want to find out more about crowdsourcing, you can start by looking at www.crowdsourcing.org; or you can look at some of the websites that might give you an idea how crowdfunding works or, who knows, maybe how to start the practice yourself? So, enjoy – some of these sites are really fun (my personal favorite is Crowdrise!)!

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Aleksandra Vesic