Crowdfunding 2030

Researching the use of crowdfunding as a new way for IFAD to mobilize resources

Achieving the Sustainable Development Goals (SDGs) by 2030 will take between US$5-7 trillion. For IFAD to maximise its contribution, the Fund needs to leverage as much financing as possible – even through non-traditional means. Could crowdfunding be the solution?

This project, funded for research, scanned the crowdfunding landscape, assessed the potential for IFAD to use crowdfunding and developed concrete options for a pilot project and partnerships that would build momentum and generate results while carefully managing risk. 

“Alternative finance like crowdfunding is growing at a very rapid pace… Well designed crowdfunding programmes can help bring not only more money, but also more ideas and more expertise”

– Challenge Team

RESULTS ACHIEVED

  • Review and benchmarking undertaken of the crowdfunding landscape for potential platforms and opportunities which fit with IFAD’s strategic vision
  • Framework of guiding principles developed for exploring crowdfunding
  • Concrete options and preliminary plan for a pilot developed, including specific entry points in IFAD projects

POTENTIAL IMPACT

  • Diversify IFAD’s means of finding and obtaining funding to achieve the SDGs, increasing long-term prospects for sustainability
  • Improve IFAD’s development impact and collaboration with governments, the private sector, beneficiaries and non-traditional donors
  • Demonstrate IFAD’s suitability as a crowdfunding partner, creating opportunities for new partnerships across many corporate and community-based organizations
  • Establish a new, streamlined process to find and leverage funding
  • Increase connectivity through tapping into a growing network of thousands of organizations throughout IFAD’s focus countries, bringing new ideas and expertise to the table
  • Contribute to data analytics with new types of data on trends, funding and disbursements

Recommendations for next steps
(from the project team)

Advanced (Scale up)

I recommend scaling this concept up by moving from research to implementation. IFAD could undertake a low-cost, low risk pilot in collaboration with one or more established entities that have substantial experience in the countries where IFAD operates. By finding experienced and respected front-line leaders who are willing to give feedback on design and to carry out the pilot, IFAD could adopt a gradual approach that carefully accounts for and mitigates operational, financial, legal and reputational risks. If the pilot is successful, it could be further scaled up and Expanded in geographic focus.

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Lessons learned
(from the project team)

I learned a lot about crowdfunding and the importance of innovative and passionate people to achieve innovative ideas. I also learned that partnership is key to maximise results in innovation and, more in particular, for alternative finance solutions. It is of no use to duplicate efforts and I re-defined my original idea based on the solid experiences and lessons available from which IFAD can benefit at low-cost with existing partners. Personally, I am extremely happy to have been part of this challenge and I look forward to its developments.

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