Crowdfunding as a Tool for Education.
With the fees of universities rising both in the U.S. and in the U.K., students found themselves with bigger and bigger loans to pay back working hard during and after their studies. Adding to this the fact that the students of these days are generally expert social networks users and internet savvy, it is understandable why they could not stay still in front of such an appealing social tool such as crowdfunding. It came almost naturally. Some students started to use crowdfunding platforms for personal causes to raise money from ‘family, friends and fools’ to finance their future studies. A new opportunity was born, for students, on the one hand, and for crowdfunding platforms, on the other.
One Purpose, Many Models.
Since then, several platforms offering crowdfunding for education have been born, some of them even run by the universities themselves. However, the business model at their base differs from case to case. There are platforms using a simple donation-based model, where the sum for one’s studies is entirely raised through donations; others using a reward-based model, which works like the popular Kickstarter but with a focus on education. More innovative and interesting applications of crowdfunding for education have recently appeared on the Internet, arousing the curiosity of many mainstream media. For instance, there are platforms that allow parents to register their kids on the website and let friends and family pledge in to contribute to the college saving plan. A different approach is instead taken by a couple of recently founded platforms. Currently restricted to sophisticated investors only, they allow students to ask for funds for their studies and their projects in exchange of a share in their future income. The novelty of such business model sparked a discussion about whether it is more or less acceptable that investors make profit on one’s personal income. On this I think that as long as the investors do not have voting power - as in the clamorous case of Mike Merrill who a few years back sold himself to the public - and maybe even act as mentors, this form of crowdfunding can be a good and perhaps even beneficial alternative to traditional loans. Finally, universities are starting to experiment crowdfunding not only as a way to help their students to find funds to finance their projects and their studies, but also to foster engagement with the alumni communities. These are only a few of the applications of crowdfunding for the education: there are many more out there and probably many more to come… and who knows, maybe, with the help of Crowd Valley, yours will be next.
Let the Students Have Fun.
Coming from a Country (Italy) where if you do not have an income yet, it is impossible to receive a loan, I see a great potential in crowdfunding for education. For my colleagues students in the U.S. and in the U.K., where making a loan to study is, instead, the norm, it could be a valid alternative providing even more favorable conditions than traditional loans. And to be frank: how much more fun and more rewarding is running a successful crowdfunding campaign than paying off a boring loan?
Ensigne, R.L.. Crowdfunding College Costs. http://online.wsj.com (2013).
Davis, J . Meet the man who sold his fate to investors at 1$ a share. Wired (2013)
Start me up. The Economist (2013).
Photo Credit: Library Archives: https://bit.ly/p/cT2fJh
Born and raised in Milan, Italy, Irene is an International Business graduate, with a strong interest for innovative ideas that can simplify our lives.
During her studies, she co-founded an online community for sportspeople and worked in marketing positions at Ogilvy & Mather Advertising and at the European Business Angel Network, in Brussels. She is a passionate blogger about crowdfunding and the startup ecosystem.