What is crowdfunding?

Crowdfunding or crowdfunding. Understand what it is and how it works.In a nutshell , crowdfunding , or in Portuguese, collective financing is a practice of project financing based on social participation. It enables projects that are financed by a group of people.

Crowdfunding has emerged as the easiest and most viable collaborative economy model for anyone who wants to raise funds to take a project off the ground – artists, filmmakers, NGOs, idealists, sportsmen, entrepreneurs, among others.

The term crowdfunding translated to the letter is “fundraising by the crowd”. This is because, unlike traditional investment, in which few people deposit a lot of money in a project, with collective financing it is possible to collect smaller amounts through many people (who believe in their idea and potential).

How it works?

The first premise for crowdfunding to work is the “crowd” – crowd in English. It is necessary to have people interested in participating in the financing dynamics, so it must be something that arouses collective importance.

If there are people interested, there are those who finance, and therefore the second premise, “funding” – financing in English – is also included. In addition to the collective interest, financial support is necessary to make the director’s idea viable. Only then the crowdfunding project is established.

Therefore, people willing to finance and invest in projects seek out those that relate to their ideas and needs and become part of a group that will allow them to occur in practice.

It is common for the definition of pre-stipulated goals to make the idea viable. If the goal is not achieved, the project is not financed and employees usually receive the donated amount back.

The idea of ​​crowdfunding is to focus on the potential that the campaign has to offer good counterparts for everyone. One of its other premises is win-win. Both those who collaborate and those who idealize the campaign must be benefited.

Contributions can be one-off or recurring. Punctuals are a useful tool for assigning resources to specific items, usually a single product. On the other hand, the recurring contribution is made regularly, for a constant period and can be assigned to more than one product or service.

Citizen crowdfunding

Citizen crowdfunding , or Civic Crowdfunding, is a practice of monetary contributions to projects of public interest to a large group of donors through crowdfunding platforms.

Citizen crowdfunding is nothing more than an unfolding of crowdfunding. It is still better known and widely disseminated abroad. It means that society finances the changes it would like to see in the public space.

This dynamic allows several people to come together to make the improvements that cities need viable. In this way, individuals and companies that are interested in collaborating with the public space, for example, can contribute to making projects of social interest viable.

Conclusion

Corwdfunding is an idea that has been disseminated today. Crowd funding for public spaces ( civic crowdfunding ) has grown and been used in many neighborhoods where residents would like to renovate a facility, revitalize a square , build a community garden, open an educational center, among others.

It is a practice that brings people together, creating a local movement of transformation and impact. The ease of taking ideas off the ground is provided by crowdfunding platforms, in which each one contributes a little to the project, bringing collective benefits.

If it seems like an idea to you, just look for or create a project in your locality and call as many people as possible. The Praças platform already does this in the squares of São Paulo.

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