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Crowdfunding platform raises R7m

Sibahle Malinga
By Sibahle Malinga, ITWeb senior news journalist.
Johannesburg, 07 Feb 2017
The organisation focuses less on 'bells and whistles' and more on the relationships with project creators, says BackaBuddy's Catherine Du Plooy.
The organisation focuses less on 'bells and whistles' and more on the relationships with project creators, says BackaBuddy's Catherine Du Plooy.

Local crowdfunding platform BackaBuddy helped to raise over R7 million last year for various charities and individuals.

Backabuddy is an online crowdfunding platform used for both charities and individuals who need funds for various causes. Registered as a non-profit organisation, the platform allows individuals to create projects and raise funds for any cause that is close to their heart. Causes range from individuals who need to raise funds for a specific medical procedure, to attend an international event or for a registered charity, says Backabuddy.

According to the platform, the R7 million was raised by around 1 400 individuals who were either collecting funds for personal causes or for NGOs that are close to their hearts. Successful individual campaigns on BackaBuddy range from a group of friends who united to raise funds for their friends' medical costs, a community supporting a young boy to represent SA in the UK, and a mother committed to assisting her daughter go to medical school.

In SA, non-profit organisations have been using crowdfunding to raise funds for their causes for some time now, via various online crowdfunding sites. However, Catherine Du Plooy chief operations officer of Backabuddy, says crowdfunding fees can often be too high.

"The only problem is that many individuals who would like to crowdfund are not necessarily linked to an NGO and the transfer fees when using an international crowdfunding platform are very high. However, with BackaBuddy, a 5% administrative fee is deducted from all funds raised through the platform in order to maintain the site and cover operational expenses."

Du Plooy attributes the organisation's success to sticking to the core values of the company.

"The fact that we have an amazing compassionate team that is passionate about making a difference in the SA community goes an extra mile. We focus less on 'bells and whistles' and more on the relationships that we build with the project creators in assisting them reach their goals.

"We have all either directly or indirectly been in a situation where we could desperately do with some additional funds. Be it a procedure that your medical aid does not cover,or an amazing opportunity to represent your countryin an international event, but unfortunately limited financial resources restrict some people," she notes.

Last year, a fundraising campaign on Indiegogo raised over R50 000 to help get disabled activist Eddie Ndopu to the University of Oxford by September.

According to Lerato Lamola, a senior associate at Webber Wentzel, crowdfunding is not a new concept. However, in SA the crowdfunding model of financing is still in its infancy stage. It is a concept which is not clearly understood or trusted by most, and a financing model which has proved to be difficult for the Regulator (the Financial Services Board) to regulate forthright. As it stands, the activity of crowdfunding is not regulated in SA, there is no specific mention of "crowdfunding" in any piece of legislation, nor is there any proposal of legislation in the pipeline.

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