Portland’s ChangeXchange experiments with crowdsourced funding at the local level
Call it citizen philanthropy, microphilanthropy, or crowdfunding: The idea is to get many individuals to pitch in for a cause. It’s taken off at the global level in recent years, but one question that remains is: Can it work locally?
Established platforms such as Kiva (microfinance), Global Giving (international development) and Donors Choose (classroom projects) have raised tens of millions of dollars and garnered national media attention. And every month new organizations emerge with twists on the crowdfunding idea.
One of these startups is the Portland-based ChangeXchange, which aggregates citizen donations to provide seed funding for local ventures. “ChangeXchange is about creating sustainable organizations that will generate their own income streams,” founder Amy Pearl said. “All they need is the start, the seed funding; then you can let them go.”
The 11 ventures listed on ChangeXchange run the gamut from social justice art initiatives to developing-world irrigation projects, and range from startups to mature organizations. Once ChangeXchange lists a venture, the public can invest in it by purchasing shares for $5 each. The price allows people of humble means to contribute. This way, Pearl hopes to buck the stereotype that social investing is just for the well-heeled.
ChangeXchange is not just about raising money. One of its primary goals is to foster online and in-person community between investors and social entrepreneurs. “Roundtable” is an online forum in which investors can offer support and feedback to entrepreneurs, learn more about the ventures, and meet like-minded colleagues.
ChangeXchange’s parent organization, Springboard Innovation, hosts in-person community Social Innovation Forums in its home city of Portland, Oregon. The chance to put a face to a name enables investors to build more personal connections to the organizations they support – and, as Carl Richardson’s 10 Immutable Laws of the Fundraising Universe reminds us, “people give to people…worthy causes alone do not raise money.”
There’s no question that ChangeXchange is an intriguing idea. But is it effective?
To date, its 11 ventures have raised less than $1,000 each (on average) since the launch in April 2009. Change.org’s Nathaniel Whittemore has noted that crowdsourced funding is exciting — in theory; but in practice, few platforms have figured out how to attract significant contributors. The motto seems to be: “If you build it, a few will come.”
We asked Amy Pearl about her plans to build up the investor base. In two months she plans to launch a second phase of ChangeXchange, in which share prices will be doubled to $10, and the work will spread to new cities (Pearl is eyeing six new sites, where 27 organizations are “waiting in the wings”). The site is being redesigned with new visuals and updates.
Pearl believes that entrepreneurs will have success if they actively reach out to their communities. “We have learned that the community, when spoken to, will respond,” she explained. We’ll stay tuned to see if they do.