Is crowdfunding an effective fundraising tool for Ghanaian nonprofits?

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Is crowdfunding an effective fundraising tool for Ghanaian nonprofits?

Category : Crowdfunding

Ghanaian NGOs are in a unique position to complement government efforts in achieving social protection goals through capacity-building and other productive inclusion programs. Unfortunately a lot of local nonprofits lack the funding capacity to implement large scale programs at the macro level. The good news is that crowdfunding has come to fill that gap. Unfortunately the statistics for crowdfunding in developing regions such as sub-Saharan Africa is not complimentary.

According to a report by the World Bank Group, (See report here, p.1)[1] “developing countries in Africa are among the lowest performing in the world in terms of utilizing crowdfunding. In 2015, the African crowdfunding market ‘was projected’ to total about $70 million, which accounts for less than half of one percent of global crowdfunding activity and about 21 percent of emerging market activity.”

In general crowdfunding traffic is heavier in America and Europe than in Africa. A second disadvantage is that class of assets that make up majority of the transaction volume and value are either debt or equity, in favour of profit-making ventures. Charitable donations for nonprofit purposes are minimal.

Why is this so?

Well, first of all the history of funds diversion and corruption by some local nonprofits haven’t helped in building institutional credibility with international donors. Secondly, many local NGOs lack robust accountability mechanisms that allow for transparent tracking of resources and honest impact reporting. As the saying goes, one rotten apple spoils the barrel.

So what can the “good apples” do?

1.     Institute international best practice in the management of your NGO.

2.     Be consistent on governance issues that affect operational efficiency. Ensure that there is proper structural arrangement for decision-making and accountability.

3.     Be transparent in financial management.

4.     Make impact measurement the cornerstone of your program design and report same to your key stakeholders regularly.

5.     Collaborate and engage with other nonprofit actors in your field.

6.     Build lasting relations offline before you take it online. Once online, engage creatively, meaningfully and continuously.

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[1] “Crowdfunding in Emerging Markets: Lessons from East African Startups.” 2015. Washington, DC: The World Bank Group. License: Creative Commons Attribution CC BY 3.0

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