Why It’s an Unprecedented Year for Social Innovation
5 Trends That Will Define Social Innovation in 2015
2015 will be an unprecedented year for social innovation. This optimal environment has been enabled by a number of trends and technologies that have increased available capital, participation, intelligence and creativity in the design of social solutions. Based on our research and observations, and combined with the feedback of Leadership Council members and CLASSY Awards Nominees, we’ve compiled a list of the top trends that will define the social innovation landscape this year.
1. Available capital for innovation will increase.
Available capital for early stage social innovations continues to grow in breadth and depth and we expect to see a definitive increase in those opportunities in 2015. A number of factors have contributed to this optimal environment:
- Increasing financial influence of Millennials
- The fast-paced growth of crowdfunding platforms
- An increasing number of institutional funders focusing their investments on innovation
Millennials and technology are changing the ways social innovations are funded. According to Forbes, there are 80 million Millenials in America alone, and more than $200B in buying power.
Coupled with Generation X, they’re also poised to inherit nearly $40 trillion in the coming years, much of which will be donated to charity. Naturally progressive and willing to take risks, Millennials are more likely to invest in new endeavors and innovations that promise to bring dramatic change, and in 2015 they’ll have more investment power than ever before.
Crowdfunding sites have become the easiest way to enable Millennials to invest in innovative social enterprises. According to the 2014 Giving USA Report, 17% of Millennials reported having given through crowdfunding sites and nearly 47% anticipate giving through crowdfunding in the future. This trend is leading to the rapid growth and expansion of crowdfunding platforms like Kickstarter, Indiegogo, GoFundMe. From 2009 to 2014, funds raised online via crowdfunding grew more than 1,000% to nearly $10 billion. By 2025, the global crowdfunding market could reach between $90 billion and $96 billion, according to a 2013 study commissioned by the World Bank.
Some innovations crowdfunded through online giving marketplaces
- Lava Mae provides mobile showers for the homeless.
- Kite Patch is a breakthrough mosquito fighting patch that blocks mosquitoes’ ability to track humans.
- Luminaid is a solar-powered, inflatable light that packs flat and inflates to create a lightweight, waterproof lantern.
Classy.org has grown into the leading online and mobile fundraising platform for top nonprofits and social enteprises. Over the past year alone, we’ve seen 3.1x growth in organizations raising funds through the platform.
“Crowdfunding as a utility for social innovation is really in its infancy. As crowdfunding goes mainstream and the world continues to go mobile, the opportunity for collective change is massive. This will be especially true at a local level, where communities everywhere become empowered to help themselves in various ways right through the phone in their pocket,” said Scot Chisholm, Classy’s CEO and co-founder.
“Social innovation is providing people with the tools necessary to have greater power in society. Across the board, social innovation uses creativity to empower people leading to improvements in livelihood, health, education, social justice, and emergency relief.” – Emily Coppel, BRAC USA
Kindred Image is a social organization that exists to end child abandonment and create a culture of life in South Korea. Started by a group of USC grad students studying film, they were inspired by their experience in South Korea and created a film to raise awareness and funds for the cause.
With zero nonprofit experience, they came to Classy.org looking for a way to turn their inspiration into a sustainable fundraising model with monthly recurring revenue and peer to peer fundraising. Since registering on Classy.org last year, they’ve raised $163,123 from 2,019 supporters on the platform.
Institutional investments in social innovations are also on the rise. In a spring 2014 article on SSIR, Gabriel Kasper & Justin Marcoux of Monitor Institute described a new trend of funders who are introducing innovation into their philanthropic processes and portfolios. Kasper and Marcoux dubbed these “innovation funders” that are “seeking out ideas with transformative potential, tak[ing] risks on less proven approaches, open[ing] themselves up to exploring new solutions, and recogniz[ing] that innovation requires flexibility, iteration, and failure.”
Many of the largest foundations in the country are supporting this innovation movement, including the Robert Wood Johnson Foundation, Gates Foundation, David and Lucile Packard Foundation, MacArthur Foundation, Knight Foundation and Rockefeller Foundation.
The Social Innovation Fund (SIF) represents increased interest and growth in fund allocation to innovative solutions from the government as well. Launched in 2012 by the White House and Corporation for National and Community Service (CNCS), SIF combines public and private resources to grow the impact of innovative, community-based solutions. Approximately $40 million is now available for new grants in 2015, according to their website.