Social ventures face problems when it comes to raising enough capital to finance their viability or in most cases their sustainability over a long period of time. International donors and the government increasingly find it difficult to provide assistance to the far off rural communities, hence the "Last Mile" Problem. It has been a practice since the birth of civilization that people have mobilized as a community to fix problems in their surroundings by pooling their meagre resources.
Crowd Funding as a concept means collective cooperation by the community to pool resources to support a cause or an organization. In recent times it has been mostly through the Internet or social networks. One prime example being the political campaign of President Obama in 2008. He got $137 million in small donations for his election campaign.The same model is also being used to meet the capital needs of social enterprises. The main driver behind crowd funding is the common interest shared between people that motivates them to pay a monetary sum for its development.
Crowd funding has been the main idea behind formation of cooperatives in rural areas to solve the problems of the community. Around 1990s the state of Kerala in rural India was facing a acute water shortage. The villagers decided to take the matters in their own hands and started collecting funds for their own mini piped water dreams. There were only three water supply schemes run by the government . The villagers started their own private water supply scheme using private resources and funds. A cooperative was formed and members were charged a nominal membership fee. The more poor segments paid their membership fee in installments. The scheme was a huge success and was able to meet the water requirements of that village. This is a great example of what community intervention and cooperation can do where governments fail.
The main idea is to empower people to create that "first mile" capability in their communities through a crowd funding approach, instead of waiting for the government to bridge that "Last Mile" gap.
Some question that comes to mind are
- How can crowd funding approach be used in rural communities to create microfinance and micro insurance cooperatives?
- What role can technology play in promoting these crowd funding approaches in the rural areas, similar to what social networks support in more urban areas. Connectivity limitations in rural areas is one of the main challenges.
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