Thursday 28 March 2024 | 13:55

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

06.05.2016  |  Economy   |  Lizaveta Kasmach, BelarusDigest,  
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

Other news section «Economy»

Leanid Zaika: Minsk decided to beat the Kremlin by Iranian oil
Leanid Zaika: Minsk decided to beat the Kremlin by Iranian oil
There are no strategic goals behind the purchase of Iranian oil, believes economist Leanid Zaika.
Stanislau Bagdankevich: The living standard will continue to fall in 2017, and possibly in 2018
Stanislau Bagdankevich: The living standard will continue to fall in 2017, and possibly in 2018
In 2017, Belarus will have to pay about $ 5 billion debts, which may affect the level of welfare negatively.
Leu Margolin: Industry cannot rise from its knees
Leu Margolin: Industry cannot rise from its knees
Although 30 percent of Belarusian enterprises can still be revived through urgent structural reforms.
Stanislau Bagdankevich: Next year will be harsh
Stanislau Bagdankevich: Next year will be harsh
Stagnation will continue in 2017, the standard of living will not rise, and the banking system may experience a crisis.
Andrei Yeliseyeu: Russia cannot impose quotas on the Belarusian dairy products supply
Andrei Yeliseyeu: Russia cannot impose quotas on the Belarusian dairy products supply
Belarus has already agreed to reduce the level of state support to agricultural producers in the framework of the Eurasian agreements.  
Leu Margolin: It is impossible to bring back the 500 dollars salary
Leu Margolin: It is impossible to bring back the 500 dollars salary
The authorities will start pressuring businesses to make them raise salaries.
Uladzimir Kavalkin: Drop in income? Salaries are finally becoming adequate to the economy state
Uladzimir Kavalkin: Drop in income? Salaries are finally becoming adequate to the economy state
Income may drop even a little bit more, but it will not be anything dramatic - within a few percent, expert believes.
Leu Marholin: In 2017, the probability of economic growth is close to zero
Leu Marholin: In 2017, the probability of economic growth is close to zero
In 2016, Belarusian authorities were expecting growth, too. However, the economy is going down.
EBRD will prepare five state companies for privatization
EBRD will prepare five state companies for privatization
The Belarusian government has invited the European Bank for Reconstruction and Development (EBRD) to prepare five large state-owned companies for privatization.
 Leu Marholin: We are heading full speed to the new nineties
 Leu Marholin: We are heading full speed to the new nineties
Regression of the Belarusian economy combined with the inertness of the government will make us recall the worst years.  
Uladzimir Kavalkin: Statistics on unemployment and real unemployment are poles apart in Belarus
Uladzimir Kavalkin: Statistics on unemployment and real unemployment are poles apart in Belarus
Officially, the unemployment in our country is reducing – if judging by the number of registrations at the labor exchange; however, the number of jobs doesn’t increase in the economy.
Leanid Zaika: Decline in prices on gas should lead to the reduction in utility costs
Leanid Zaika: Decline in prices on gas should lead to the reduction in utility costs
In the situation of cheaper prices on gas Lukashenka's decree on non-cash housing subsidies looks weird.
Point of view: Defence industry in Belarus evolved from helpless to a weighty branch of economy
Point of view: Defence industry in Belarus evolved from helpless to a weighty branch of economy
Recently Belarus State Military Industrial Committee announced that in the first half of 2016 its enterprises earned a net profit of $80m, thus over-fulfilling the assigned export plans by a quarter.
Leu Marholin: It looks like the Belarusian PM has got a fortuneteller
Leu Marholin: It looks like the Belarusian PM has got a fortuneteller
The fall of the economy will continue in 2016; we should hardly expect growth in 2017.
Why with the success abroad, Belarus’ agriculture keeps failing at home?
Why with the success abroad, Belarus’ agriculture keeps failing at home?
Poor economic conditions in the countryside, restrictions, unfair competition, inefficiency of state-owned agricultural enterprises also contribute to this ‘success story’, writes Aliaksandr Filipau.
Viktar Marhelau: We killed consumer demand inside the country
Viktar Marhelau: We killed consumer demand inside the country
In the situation of everyone’s impoverishment administrative procedures are now being perceived painfully.
Opinion: The question of what role China can play in Belarusian development remains open
Opinion: The question of what role China can play in Belarusian development remains open
On 20 June Lukashenka met with vice-chair and president of the Chinese CITIC Group Corporation Wang Jiong; it seems especially important in light of Lukashenka’s planned visit to China in September.
Lukashenka: Only lazy people don
Lukashenka: Only lazy people don't earn well in Belarus
All the conditions for everyone to be able to earn a decent salary have been enabled in Belarus, however, it is necessary to make some effort to get the money, assumes the president.
Leanid Zlotnikau: The government knows what to do with the economy, but will do nothing
Leanid Zlotnikau: The government knows what to do with the economy, but will do nothing
Belarus is losing currency earnings – in the 6 months of 2016 the country earned 3 billion less than in the same period in 2015. Instead of removing the causes of the flop the state relies on magic.
Russia
Russia's Rosatom agreed to replace reactor vessel at Belarus NPP
State Corporation Rosatom has agreed to replace reactor vessel at the Astravets NPP in Belarus.
Gintautas Mažeikis: The relation of political field and arena in the framework of information war

In his report, philosopher Gintautas Mažeikis discusses several concepts that have been a part of the European social and philosophical thought for quite a time.

“It is our big joint work”

It is impossible to change life in cities just in three years (the timeline of the “Agenda 50” campaign implementation). But changing the structure of relationships in local communities is possible.

Shhh! Belarus Wants You to Think It’s Turning Over a New Leaf

Minsk’s muddled media clampdown could jeopardize warming of relations with the West.

Mikhail Matskevich: How to create a local agenda and make it a problem solving tool

To achieve changes, you need to be interested in them and stop pinning all hopes on the state.