September 2, 2013

EDITORIAL: The Promise of Crowdfunding

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In the spring, Cornell was one of the first universities to sign on to a pilot program launched by USEED.org, an online fundraising platform for higher education institutions. This summer saw the launch of the first two Cornell crowdfunding campaigns, both of which have been relatively successful. Innovative alternatives to fundraising like USEED allow the University to support its communities by bolstering independent efforts. As long as it remains a supplement to — and not a replacement for — administrative financial support for the initiatives that most benefit Cornell’s campus, crowdfunding is one forward-thinking and promising fundraising option.

Crowdfunding — a popular new entrepreneurial model that uses social media to solicit financial backing — is currently one of the largest sources of online donations for non-profit projects. Numerous independent research groups have lauded the effectiveness of the method for smaller, short-term fundraising efforts. At Cornell, it is an experiment that carries no risk and can only generate financial support, however modest, for University initiatives. So far, Dilmun Hill, Cornell’s student-run organic farm, easily surpassed its $5,000 goal with plenty of time to spare, while the effort to launch an LGBTQ Leadership Academy has raised 25 percent of its $15,000 goal with nearly a month remaining.

The system, though not perfect, is seemingly well-formed. Gifts made through USEED are considered contributions to the University, which makes them tax-deductible for donors. Another benefit of administrative oversight is the existence of safeguards to keep recipients honest. For instance, Cornell says it works to ensure that funds raised are dedicated to the exact purpose advertised during solicitation. Additionally, due to its heavy reliance on social media integration and campaigns that are more narrowly-focused and personal in nature, the average age of people who generally participate in crowdfunding is significantly younger than that of typical givers. The novelty of USEED could potentially entice new, younger donors for the University — perhaps even ingraining a habit of generosity in Cornell students and young alumni at an earlier age.

There is no guarantee that USEED’s seeming initial success will continue with future endeavors. It is certainly possible that the novelty will wear off and an expansion of crowdfunding to additional projects will dilute the donor pool. In fact, that outcome may be inevitable. But it is nonetheless commendable that Cornell is continuing its tradition of staying ahead of the technology curve. Cornell cannot, and, for the sake of fiscal stability, often should not, directly fund every project at the University to the level that it perhaps deserves. The USEED model allows the administration to offer a helping hand while still placing onus on organizers to take ownership of their own projects’ survival. Even if USEED fails to succeed as a long-enduring form of fundraising, we believe it is symbolic of the University’s commitment to encouraging entrepreneurial activity among its students, alumni and affiliates.

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