Recharging a Tired Church

Churches have become places where you go – not places where you belong. Crowdfunding is about to take us back to that time when community and neighborhoods were more important than the Dow Jones Industrial Average.

In Equity Crowdfunding: Transforming Customers into Loyal Owners, I wrote about how crowdfunding can be transformative for a community. Neighbors can rally around each other, in order to invest in deteriorating Main Street districts to ensure that they have the local businesses that they need.Church

But it isn’t just up to local neighborhoods to organize on their own. Religious (and other community-based groups) can sponsor and promote projects that involve their members. For example, how powerful is it for a church to have five of its local business projects supported by members of the church? The beauty of this is that it enhances the business leaders’ stature within the church community, while at the same time providing an avenue for congregants to get involved in investing at the local level. All the while, this helps increase revenue for a church that is often struggling with financial issues.

After all, churches rely on the generosity of parishioners in order to operate. So instead of simply relying on passing the plate, this is a way in which a church can actively promote the community. How? Simply by taking a small percentage of the overall community raise in the form of stock as a “tithe”. So in this approach, a church may receive, say 10% of the completed raise – but not as cash. Better yet, the church receives shares of stock in the local business. The church receives the same benefits as every other investor (and would obviously need to be fully disclosed as part of the offering).

Now you have added an extra element of persuasion; people may sponsor a local community business because they know part of the benefit is going to their own church. The beauty of the whole thing is that congregants who are now frustrated by churches that are not responsive to their day-to-day lives, all the sudden see a direct involvement by those churches. I suspect that the first group of adopters will be exactly those types of churches are already extensively involved in their community. Crowdfunding will let more people see their church as an interval part of people’s lives, not simply a place where people come to pray. But over time, there really is no better way for churches to become places that promote “belonging”. They can do it by participating in crowdfunding campaigns within their own flock.

Merry Christmas!

Jonathan Frutkin

Jonathan Frutkin is CEO of Cricca Funding, LLC. He’s the author of “Equity Crowdfunding: Transforming Customers into Loyal Owners” which is available in paperback, Kindle and audio book formats.

The Future of Franchises? Crowdfunding

“Electric” is the best way to describe the franchise business over the last few years. As many tire of working for “the man” and look toward their own future, franchising is an appealing way to create a new business without having to go through the process of starting from scratch. Although there are enormous opportunities now for people looking to launch their franchise, the real opportunity is coming quickly.

Equity crowdfunding – the act of bringing in capital from many investors over the Internet – is going through its last step (SEC rule-making) and about to become legal in the United States. This means that new franchisees are about to have a new tool to help finance their new business. For many brands (like McDonalds), the leading franchisees are first-time small business owners. Usually they put their life savings into their new franchised business, and take out some sort of loan to finance the rest. Instead of just taking a loan, what if they could take hundreds and hundreds of potential new customers and make them owners instead?

But the crowdfunding opportunity ultimately isn’t just one for the new franchisee – it is an unprecedented revolution in how brands are going to be able to expand into new markets with viral effect. As franchised brands move from market to market (attempting to penetrate new markets where there may be some brand awareness, but not much) there is nothing better than creating a loyal following of owners to drive the new business.

That is the promise of crowdfunding. For example, an ice cream brand like carvelCarvel is very strong in its native New York market. But the brand has extended to more markets, mostly on the backs of people who love their Fudgie the Whale ice cream cakes and have moved from New York to other cities. Now imagine if the love of Fudgie could be extended to more than just customers – it could be crowdfunded by large groups of loyal owners in new markets that would create an instant marketing machine. Driving large numbers of customers into the new locations, these loyal owners also gain the financial benefits of the new location’s quick launch and impressive revenue.

The new franchisee now has the advantage of a built-in marketing machine plus capital to grow. And the community has the chance to welcome the new business with open arms. It also is a strong way for racial ethnic groups to back people from their own community who want to get into a particular franchise. Diversity has been the buzzword in the franchise community for a long time now. But there is no really better way to ensure success other than giving potential customers something special – ownership.

The benefits of ownership include both financial dividends and owner loyalty programs.

Crowdfunding for franchises is good for the franchisor’s brand, the franchisee starting the business and the local community. Crowdfunding provides a win – win – win for everyone involved.

Jonathan Frutkin

Jonathan Frutkin is CEO of Cricca Funding, LLC. He’s the author of “Equity Crowdfunding: Transforming Customers into Loyal Owners” which is available in paperback, Kindle and audio book formats.

Crowdfunding World Summit

Over the last couple weeks, the online (and free) Crowdfunding World Summit has brought together top leaders from the crowdfunding movement to talk about this incredible new industry. Some of the speakers are Congressman and Senators, some are authors, while others are community leaders. And let’s face it, there’s a CEO or two in there!

The link only works today and tomorrow. Enjoy the Summit!


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