Are you a new social entrepreneur launching a new social enterprise? If so:
- Congratulations! America’s marketplaces could use a lot more businesses that prioritize beneficial outcomes for people (and/or the environment) alongside their profits. At ioby, we champion the growing number of social entrepreneurships using their interests, skills, and drive to start effective social enterprises all over the country.
- Are you, by any chance, trying to raise money?
If you are, we’d like to offer one big general suggestion followed by some specific advice from successful social entrepreneurs we’ve supported in the past.
ioby’s advice for social entrepreneurship
There are many ways social entrepreneurs can secure funding for their new businesses: applying for grants and other competitions, taking out loans, and staking your life savings on your idea are just a few. Of course, not all will work equally well for everyone, and all have their advantages and drawbacks.
ioby has been in the community crowdfunding business for over 10 years. In that time, we’ve seen the online crowdfunding landscape change and grow tremendously. But some of crowdfunding’s inherent strengths make it particularly compelling for social enterprises today. Crowdfunding:
- Lets your community “vote with their wallets” for the change they want to see, right where they live. Do your neighbors like your business idea? Great! You’ve got potential donors already.
- Puts social entrepreneurs in the driver’s seat. It feels great to win seed money from a foundation or investor, but if your business needs change, will you still be stuck with the plan you laid out for them? When you crowdfund, you can communicate changes to your donors as you grow, without risking violating a contract.
- Gives you an initial boost—without an IOU. When you raise money from your community, those funds are invested into your social enterprise without having to worry about interest, or paying it down the road–it can instead start paying dividends to your neighbors and your enterprise from the get go.
ioby Leaders’ advice for social entrepreneurship:
Tons of social entrepreneurs have led ioby campaigns. Most recently, a cohort of social entrepreneurs led campaigns as part of our Eastern Market Growing Communities Matching Grant Challenge, a partnership with Detroit’s Eastern Market. The challenge offered 17 local food entrepreneurs the chance to double donations made to their projects on ioby in spring 2017, dollar for dollar, up to $3,000. Here’s some of their advice for other social entrepreneurs looking to crowdfund and multiply their impact:
Crowdfunding increased my capacity—while making community connections
The Mushroom Factory is the Detroit-based social enterprise of Chris Carrier and Deana Wojcik. Their urban farm grows several types of edible and medicinal mushrooms on recycled materials produced locally—like sawdust from a furniture maker and grain from a brewery.
Social entrepreneurs Chris and Deana exceeded their goal and raised almost $8,500 on ioby to increase their production capacity and efficiency by outfitting their new production space (a formerly obsolete warehouse) with dry fog humidification, specially calibrated refrigeration, mobile mushroom storage, and water filtration systems. These changes helped make their mushrooms fresher, healthier, and more affordable for customers.
“The Factory has been a great way for us to find community here,” Deana said. “The degree to which we’ve been been embraced, as business owners and as people, has been exciting and surprising. But Detroit is a very creative and collaborative place. When we started introducing ourselves as mushroom farmers, that’s when the good conversations really started.”
Crowdfunding allowed me to upgrade my equipment—while building trust with donors
Small Batch Detroit is a youth-powered food program that offers real-world employment and career opportunities for Detroit Food Academy (DFA) high school students and recent grads. The program grew out of the first of DFA’s student-initiated products: Mitten Bites, a tasty granola-based snack (the name is an homage to Michigan’s mitten-like shape).
Social entrepreneurship is the name of the game for Jake Schoenknecht, Small Batch’s director. He led the campaign that raised over $3,000 on ioby for the program to buy a commercial grade 60-quart mixer that allowed the student employees to quadruple their Mitten Bite production output using the same amount of kitchen time.
Jake reported that their crowdfunding experience was great. One reason? It’s easy for donors to see what they’re giving to. “A lot of times with nonprofit fundraising, when organizations just say ‘this is the work we do, please fund us,’ donors can feel unclear about where exactly their money will go. But this is so practical.”
Advertise my business—while joining in my neighborhood’s revitalization
Farm to Freezer is a local processor of Michigan fruits and vegetables that are prepped and frozen in small batches by people with barriers to employment: whether they’re people returning from prison, recovering from addiction, or transitioning from being without housing.
Farm to Freezer’s founder, social entrepreneur Brandon Seng, exceeded his goal and raised over $7,000 on ioby to commission a locally designed and fabricated 20 by 20-foot banner to hang outside and announce the company’s new location (a long-abandoned freezer space within Eastern Market) and celebrate the beauty of Michigan’s many farms.
“Recently, the building was vandalized as a 15-foot, four letter word (not FOOD) was painted on its side,” Brandon recalled. “We believe that with new life and activity, and artwork, we can change the story for this space, and join the community in the revitalization effort underway in the Eastern Market.”
So what idea to do you have to strengthen your community through a social entrepreneurship project? If you’ve got a great idea that you just don’t quite know how to jumpstart, or even if you’re a veteran entrepreneur who is looking to bring your project to the next level, we can help you crowdfund for what you need!