Crowdfunding In Belarus: a spectacular surge in 2015, with the trend continuing in 2016

Leading Belarusian crowdfunding platforms Talakosht, MaeSens, and Ulej became increasingly effective in supporting cultural and social projects, charities, and socially responsible businesses.

One of the most recent examples is a project at Talaka.by, featuring a 1:10 scale reconstruction of the castle of Krewa. The initiators want to popularise Belarusian history and attract more tourists to north-western Belarus.

These initiatives are important not only because they encourage grassroots civil activism, but also because they allow more fundraising opportunities. The government of Belarus still severely restricts obtaining funding from abroad. However, crowdfunding has a limited potential as a major source of funding due to the small amounts of donations.

Old traditions of the community: Belarusian talaka

Talaka in Belarusian refers to an ancient folk tradition of the community helping individuals in need: for instance, in the construction of a house or helping out with the harvest. Its modern incarnation is Talaka.by, a web-based non-profit organisation. It specialises in networking and connecting people with creative ideas.

The crowdfunding spin off of Talaka.by is Talakosht. One of the essential conditions for projects here is their social importance. First, people declare their readiness to support the campaign. At the next stage, these “promises” materialise into donations. According to Talaka.by, around 80 per cent of “promised” donations turn into real money. The funding scheme is flexible, working either through “all-or-nothing” or “keep it all” models.

Currently, Talaka hosts over 250 active projects, primarily in the educational, cultural, and social spheres. Successfully implemented ideas range from a festival of street graffiti art, free bike rentals in Minsk, to Belarusian dubbing of the cartoon Peppa Pig. The latter was very popular, collecting over $3,000 and exceeding the originally planned amount by 63 per cent.

On 12 April, Talaka users pledged financial support to Vital Hurkou's trip to the Muaythai World Championship, scheduled for May 2016 in Sweden. The Belarusian Ministry of Sport refused to finance Hurkou's trip, even though he is a leading national and world athlete in Muaythai. Officials appeared to be unhappy about his involvement in the rock band Brutto, known for its government-critical positions.

Beehive as a model of community involvement

Recent newcomer on the Belarusian crowdfunding scene with a more pro-business orientation, Ulej (beehive), launched in spring 2015. In contrast to Talakosht, Ulej is a for-profit organisation, collecting a 12 per cent commission on successful projects. It operates according to the “all-or-nothing” model of the world leading crowdfunding platform Kickstarter. Statistically, around 40 per cent of all projects at Ulej succeed in collecting the required funds.

Ulej supports a wide range of initiatives, with a focus on their originality and benefits to the public. For beginners, the platform offers crowdfunding training resources. Authors can promote their projects for free, receiving support and feedback from the platform.

Currently, the most popular projects at Ulej are charities, literature projects, and urban initiatives. Successfully implemented ideas include translations of fairytales for iPhones and iPads, publications of children's books, a map of Belarusian cuisine, and a toy house for the orphanage. Within a year of its establishment Ulej had collected over $71,000. An average donation is about $23.

Examples of crowdfunding initiatives at Ulej also demonstrate a new approach to charities. Emphasis on creative and unconventional ideas allows one to highlight existing problems in a new way and to receive more positive responses, compared to traditional appeals to compassion and call of duty. However, beyond charities, crowdfunding remains an unreliable source of funding.

Alternative ways of making sense of charities

MaeSens (in English:“It makes sense”) started in October 2011 in Minsk. It operates on a slightly different principle to Talakosht and Ulej, defining its mission as a unique combination of social networking with electronic auctions.

MaeSens attracts funding for social projects by offering so-called “meeting auctions.” Users can place bids for an advertised meeting with a project author or a celebrity. The highest bidder receives the rights to the meeting. All proceeds from the auctions go towards supporting a selected cause or a charity.

Currently, more than 85,000 people have actively used the platform, collecting over $300,000 for orphanages, social shelters, charity organisations, and sick children. These causes have attracted Belarusian and foreign celebrities, including the athlete Aliaksandra Herasimenia, former presidential candidate Tatsiana Karatkevich, founder of Tut.by Jury Zisser, as well as music stars Robby Williams and Three Days Grace.

In June 2013, MaeSens launched the Social Weekend contest. It aims to support development of the non-profit organisations and youth initiatives active in social and cultural spheres. Another goal is the promotion of social entrepreneurship and social investment. So far, over 750 projects have participated in the contest, resulting in $75,000 worth of investments.

In this way, crowdfunding opens up new routes not only for civil society and charities, but also for businesses. However, one concern is possible attempts by the state to control grassroots initiatives. Belarusian legislation has not yet developed extensive regulations for crowdfunding activities, which so far have been treated as donations, subject to the standard 13 per cent income tax. But this might change quickly, especially in light of recent trends of searching for quick revenues for the budget.

Currently, Belarusian crowdfunding platforms are still a relatively new phenomenon. They are effective tools to test ideas and identify projects that ordinary Belarusians deem worthy of supporting. However, the impact of crowdfunding remains limited, as it has not yet reached the capacity to support large-scale projects.

From the economic point of view, crowdfunding promotes social entrepreneurship and micro investment, leading to the democratisation of the economy. Yet the main question here is whether the state will choose interference or foresight. At the end of the day, crowdfunding has the long-term potential to support independent competitive projects and to create more jobs for the economy.

Originally published at BelarusDigest