FUNDRAISING PLATFORMS IN RUSSIA. ADVANTAGES AND DISADVANTAGES

ФАНДРАЙЗИНГОВЫЕ ПЛАТФОРМЫ РОССИИ. ПРЕИМУЩЕСТВА И НЕДОСТАТКИ

Мастерова Анастасия Витальевна

студент, ФГБОУ ВО Российская академия народного хозяйства и государственной службы при Президенте РФ, РФ, г. Москва

Кондратенко Дарья Максимовна

студент, ФГБОУ ВО Российская академия народного хозяйства и государственной службы при Президенте РФ, РФ, г. Москва

Abstract. This analytical work is devoted to fundraising platforms that help to bring investments and financing of social projects to a new level in the rapidly developing online space of Russia, which is relevant in the context of digitalization of society as a whole. It also considers the advantages and disadvantages of such platforms in the realities of the Russian fundraising and crowdfunding sphere.

Аннотация. Данная аналитическая работа посвящена фандрайзинговым платформам, которые помогают выводить капиталовложения и финансирование социальных проектов на новый уровень в стремительно развивающимся в онлайн-пространстве России, что актуально в условиях диджитализации общества в целом. Также в ней рассматриваются достоинства и недостатки таких платформ в реалиях российской сферы фандрайзинга и краудфандинга.

Keywords: fundraising, charity, donor, funding, non-profit organizations, crowdfunding, beneficiary, online platforms

Ключевые слова: фандрайзинг, благотворительность, донор, финансирование, некоммерческие организации, краудфандинг, бенефициар, онлайн-платформы

Introduction

The concept of fundraising implies financing, investing in socially important projects and non-profit organizations (NPOs) on mutually beneficial terms [1]. These can be social, cultural and educational projects, charity, research activities and others.

The first references to fundraising appeared in the late 19th century in the USA, from where the term spread. In the USSR, the existence of fundraising was impossible due to a number of reasons, namely because of the command and administrative economic system and monopolization of public life began in the 21st century. It was caused by problems in the social and cultural spheres of life, which the state was unable to cope with, and activists from among the citizens took the initiative of implementation on themselves, because the economic system and the possibility of creating non-profit projects allowed to do it.

As for the types of fundraising, there are several:

1. Strategic, the purpose of which is to raise funds from a donor (a person who directs money, financier) for the implementation of a social project.
2. Operational, regulating expenses for the development of NPO activities: staff salaries, rent payment and other forced expenses [2].

Forms fundraising:

1. Internal franchising. Includes independent fundraising by an organization or individual. This process can be carried out with the help of sponsor searches.
2. External. In this case, a third-party organization is hired, which uses its own tools to attract donations.
3. Project fundraising. In this situation, mainly socially significant projects are affected to achieve a specific goal.
4. Operational fundraising. This type involves collecting funds for a non-profit organization or for the company's current expenses.

Also, when considering fundraising, we should pay our attention to crowdfunding, as these processes are similar. Crowdfunding is financing by a group of individuals, the general public of charitable foundations, their support of companies, businesses or non-profit events [3].

If we review such phenome as crowdfunding, we can illustrate, for example, campaigns that we meet in our daily lives. These can be charity races, marathons, which get publicity in the media because of their scale and the participation of media personalities in them, which helps to attract the attention of the public and donors to the charitable foundations organizing them.

When speaking about fundraising and crowdfunding platforms, we mean, services that operate online. As an example, the following Russian platforms can be cited: Boomstarter, Blago.ru, Planeta.ru, Rounds, Money Friends. These are some of the many platforms that allow individuals to send money for charity, development of both creative and technical projects through regular fundraising, fundraising from the sale or purchase of something on these platforms or even through auctions, functioning on the Internet [4].

Disadvantages of fundraising

The main disadvantages of the fundraising platforms are mainly related to the activity of fundraising and crowdfunding itself. The most important disadvantage is related to the fact that the process of formation of fundraising and crowdfunding is slowed down due to the lack of fundamental theoretical works in this field [5]. This undoubtedly leads to low quality of organization of work of such projects and lack of trained personnel. Moreover, it is a priori rather unstable activity, which is due to the high level of uncertainty in the economic sphere stability of the economic and political spheres in Russia.

Another negative aspect is that the development of fundraising platforms is largely based on public trust, which is extremely difficult to obtain in Russia [3]. This is quite understandable if we go back a few years. Many people still remember the experience associated with the MMM pyramid scheme, which ended miserably for the defrauded depositors. At present, Russians' distrust of financing new projects is reinforced by the spread of internet fraud.

Another disadvantage of online fundraising platforms can also be the danger of storing data on the Internet, as there are many cases of hacker attacks and data leaks, as well as the existence of Internet fraud, which can be a threat to users' bank accounts.

The last disadvantage is the legislative aspect of the existence of fundraising and crowdfunding platforms [6]. The reason for this is the Law on Attracting Investments, which covers not information rights, but information itself, does not disclose the former, which only causes difficulties and questions in the legislative regulation in the online fundraising and crowdfunding industry.

At the same time, there are some advantages of online fundraising platforms. Firstly, because the transition to digital technologies has noticeably accelerated due to the COVID-19 pandemic, new tools are appearing on the Internet (and Russia is no exception). Therefore, online fundraising platforms are also developing, which, together with the growing need to move many areas of life into the Internet, makes online charity platforms more appealing to the public [5]. To this point we can also add the importance of attracting the younger generation, which gives its preference to various IT-technologies.

Secondly, due to the development of online platforms, fundraising platforms in comparison with classical methods (e.g., mailings) have relative inexpensiveness of service and lack of time limits [7].

Thirdly, the possibilities of the Internet allow for ‘transparent’ reporting. This factor, in turn, may well help to combat one of the disadvantages previously highlighted, namely the mistrust of Russian society.

Fourthly, communication between donors and beneficiaries (individuals and organizations receiving financial assistance [2]) is important for this type of activity. The online format allows for an interactive dialogue and dissemination of necessary information about organizations relatively quickly.

Moreover, if we talk about fundraising and crowdfunding in Russia, several other advantages can be highlighted. Successful attraction of donors to various projects (creative, research, etc.) gives an opportunity at the initial stages of implementation to understand the main idea of business plan and to conduct a kind of PR-company for their creators.

Besides, donors themselves can get a significant benefit for themselves, which is an advantage for them: increase of the donor's share portfolio when investing, satisfaction of the psychological need of a person, manifested in the need to feel themselves as a socially significant unit of society [6].

In fact, it is possible to highlight such an important aspect of fundraising and crowdfunding activities as the use of social networks, media and messengers. They are involved in the work of a platform, give an opportunity for wider dissemination of knowledge about this or that charitable activity in the society and make users aware of the existence of fundraising platforms, which allows choosing a convenient funding format for both donors and beneficiaries. And the above-mentioned disadvantages and advantages of fundraising and crowdfunding must be considered to the use of online tools for more effective impact on projects.

Conclusion

In conclusion, it should be noted that fundraising as an electronic platform for increasing funds has been developing actively Russia. Now there is a huge number of its forms and types. Fundraising and its methods of implementation are moving in the same direction as the digitalization of society and business, which gives it constantly new opportunities and convenience in use. Such a method for attracting the necessary funds has its pros and cons, which should be considered when implementing not only entrepreneurial, but also for socially significant and creative projects. On the one hand, fundraising is one of the fastest, cheapest and most convenient methods that allows people to communicate effectively and promptly receive financial and material support using Internet technologies not only for entrepreneurial, but also for socially significant and creative projects. But on the other hand, for most of the Russian society, many aspects of such electronic platforms remain unclear and do not inspire strong confidence, as they create the impression of unreliability, instability, and also inspire a sense of danger and distrust due to the novelty of such a method. Therefore, it is very important to provide more awareness about the mechanisms of fundraising platforms in modern society in order to eliminate so much uncertainty and doubt. Combating such problems and fears will only help to contribute more effectively to socially significant programs and projects in Russia. If we take this into account, then fundraising platforms can become the most promising and rapidly developing tool to support the project, as well as become more widely used among citizens.