Crowdfunding has its roots in the alternative finance sector and while it’s still stronger in Norther America and Europe, the rest of the world is catching up quickly. Mexico, Argentina and Brazil are the leading players in Latin America, and CNBV figures show that Mexico’s overall crowdfunding market grew an average of 245% per year between 2011 and 2015.
Moreover, while most people associate crowdfunding as an alternative source of finance for business and social enterprise ventures, the total volume of donation funding was expected to value $2.85 billion USD in 2015, second only to lending!
Source: Massolutions 2015CF Crowdfunding Industry Report
Opportunities for donation crowdfunding in Latin America
Recognizing the huge growth potential in Latin America, Hispanics in Philanthropy created HIPGive in 2014 to harness the power of donation-based crowdfunding in the region. It is an opportune moment: whereas Latin American nonprofits could once rely upon an array of public funds, international aid flows, and private grant assistance, reductions in these areas have created a funding gap with many organizations turning to individual philanthropy to make up the shortfall.
Overcoming the barriers to donation crowdfunding in Latin America
Despite this, nonprofits in Latin America often perceive a number of barriers to crowdfunding in the region, including:
- Lack of confidence in donating to the charitable sector in general
- Low numbers of credit card holders able to make online donations
- Unfamiliarity/lack of trust in online financial transactions
HIPGive has been designed to overcome many of these obstacles. It features:
- Bilingual content on an attractive, user-friendly platform
- Project vetting, to ensure funds go to viable projects run by official nonprofit organizations
- Secure payments from all international credit cards through a certified Level 1 PCI Compliant Service Provider
- Immediate email confirmation and tax-deductible receipt valid in the U.S. through HIP’s 501c3 status
- Special initiatives and crowdfunding contests offering matching funds and increased promotion to generate greater interested in donation-based crowdfunding
Do you think crowdfunding in Latin America is still challenging? Do you have any of your own tried-and-tested techniques to encourage donor engagement in a context of low trust or lack of familiarity with online giving? Share your story with us tagging @hipgive on social media or writing to communications@hipgive.org
