Crowdfunding during lockdown according to Roberto Esposito (Derev)
Together with Roberto Esposito, Ceo & Founder of Derev, we take a look at the world of crowdfunding and discover how it has changed in the era of the coronavirus, both in terms of campaigns and communication.
During the lockdown period what role did crowdfunding play? Have you noticed any changes in the trend?
With around 2,000 fundraising campaigns launched in the last three months, crowdfunding has confirmed itself as one of the most effective tools for citizens to make an active and immediate contribution to the realities involved in the fight against the coronavirus. Undoubtedly, the collection of Ferragnez, to set up a temporary intensive care unit at the San Raffaele Hospital in Milan, has given a real boost to this type of initiative. The trend has evolved since March also thanks to the mobilization of two personalities who have been able to involve over 30 million followers on the web. On the one hand this has allowed the phenomenon to be amplified, reaching even those people who were not familiar with crowdfunding and making it even more mainstream, while on the other hand this has leading to the birth of many “non-accredited” campaigns: for example, many fundraisers for hospitals were started by private citizens who had no direct relationship with health facilities, collecting even several hundred thousand euros, and in some cases real scams were unmasked. For this reason, crowdfunding platforms play a role of intermediation and control that is as delicate as it is essential ensuring the safety of their users as well as transparency in the management of funds collected by the individual campaigns.
Do you have any explanatory examples you have hosted on your platform?
Among the many campaigns launched on DeRev to finance the fight against the Coronavirus, I would like to mention that of the Spallanzani Institute in Rome that chose DeRev for launching its fundraising campaign to support research against Covid-19. In the same way, during the health emergency,many other Italian institutions, municipalities and public institutions used DeRev to finance social projects and initiatives, such as the City of Caltanissetta which through civic crowdfunding has created a fund to support citizens of that city who are in economic difficulty. At the same time, non-profit organizations and associations have launched campaigns on DeRev to strengthen intensive care. Italian hospitals, such as Avis Cernusco, managed to raise over 31,000 euros in a few weeks to buy new beds at the Uboldo hospital in Cernusco sul Naviglio.
How can crowdfunding help post covid recovery in Italy?
In order to restart after the lockdown period, crowdfunding (and in particular civic, social and cultural crowdfunding) can be the additional weapon through which to bring about a real urban regeneration, implementing participatory processes, transparency of practices, digital activism and allowing for spontaneous collaboration, the establishment of communities and innovative practices as well as the meeting between them. Just like DeRev we have believed for a long time in this and,in fact, are specialized in so-called “civic crowdfunding” that opens doors to new entrepreneurial realities, creative and talented personalities. An example of this is the platform of the Municipality of Mantua and other platforms we have created, together with Wind and Coca-Cola, through which we support and finance projects of cultural, civic and social value in the Italian territories. Using crowdfunding, moreover, is an extremely effective way for activating community participation and stimulating the sense of belonging of a community by bringing about significant increases in terms of social quality, economic and market value, aesthetic and urban planning capacity.
Do you think that after Covid people will change their attitude in general towards crowdfunding and fintech?
We are facing a paradigm and vision change to which (presumably) we will never return. I don’t know for sure if people will change their attitude towards crowdfunding, but we have certainly learned to better understand the enormous value and all the potential that technology has brought into our lives. For sure, the situation we have been living in the last few months has contributed to making even more mainstream, and in the public domain, all those services that are part of the fintech and sharing its economy, all things which today are no longer relegated exclusively to a niche. So it’s time to move forward, trying to do better and better in order to overcome the cultural and bureaucratic barriers that prevent our country from climbing up in the digitization rankings of Europe. Despite the increased attention placed on these issues Italy still ranks 25th among the EU countries, according to the 2020 edition of the Desi index, the tool with which the European Commission monitors the digital progress of Member States.
What do you think about the way crowdfunding campaigns have changed during this period?
Rather than in the way of communicating and narrating individual projects, the actual perception of crowdfunding itself has changed. In the past it was considered a niche tool due to the lack of digital literacy and the lack of culture (always digital) regarding the applications of this practice. Now a favorable reception from a wider and wider audience is starting to occur, and this is certainly also changing the way crowdfunding is communicated as well as fundraising campaigns, which are applied in increasingly widespread and participatory areas.
Which are three tips for successful communication today?
- Creating a community: one of the reasons why it is not possible to improvise a crowdfunding campaign is its strength on social media and other digital channels. It is not only the number of followers that counts: if your community is not strongly linked to the project, less than 1% of the social media subscribers will give funding, so it is likely they will need many more subscribers ? and will need to be more active and loyal to reach the goal. This takes time.
- Designing a strategy: One of the most important and decisive factors for the success of crowdfunding is the strategy with which you want to manage and promote your campaign. An effective strategic plan takes many factors into account: at this stage, the campaign target must be defined, identifying user groups potentially interested in funding the project, and then planning the actions to reach audience niche and the message to leverage thus inviting them to contribute. The whole strategy must then be transformed into a timeline that includes the pre-launch, the entire fundraising period and the phase following the conclusion of the campaign: this document includes a calendar of all the activities to be carried out (press releases, blog content, social network posts, events, advertising campaigns, agreements and partnerships, sending rewards) and a graph that, shows a growth forecast and the estimated trend of donations for each action. This last point is particularly useful, not only to not improvise the actions to be put in place, but above all to monitor the results in real time and understand if the campaign is proceeding according to expectations and when the 100% collection will be reached.
- Telling a story: people are not interested in spending money out of solidarity, but they are interested in participating in a project or initiative that excites them, involves them or gives them a concrete return. For this reason, the crowdfunding campaign should not be a sterile request for funding but a fascinating story to tell that makes people want to be part of it. This premise must be the basis of all the content and materials that will be prepared for the crowdfunding campaign, from the video to the descriptions. Similarily, for this story to be credible it must be clear and transparent: it is essential to present the project explaining its characteristics and results, how the funds raised will be used (even those that will eventually reach more than 100%) and what is offered in return to the supporters, specifying any other detail that may be useful to convince a user to finance it. Through my social channels, in particular Facebook (fb.com/about.Rob) and Instagram (@RobertoEsposito85), I give my small contribution and I work daily on a strategy for digital education. Through this I explain to users the strategies and dynamics through which crowdfunding, fintech and other digital and communication tools work, in order to provide more awareness, useful information and digital culture to users who want to use these tools to carry out their projects.
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