5 Ways to Use Crowdfunding for Green Manufacturing

Green manufacturers produce goods like renewable energy systems and clean technology. In the current marketplace, these and many other manufacturers also take steps to reduce pollution and waste, minimize reliance on natural resources and recycle materials. Going green is a part of the strategy that enterprises are implementing to restore vitality to the United States manufacturing sector. Supporters of the movement extoll the virtues of green and lobby legislators to enact environmentally friendly mandates. In the long run, the advocates hope that green is the answer for private United States manufacturing firms to successfully compete against government backed industrial opponents in the global marketplace.

In America, the percentage of gross domestic product (GDP) generated by manufacturing has slipped. A 2012 report revealed that manufacturing dropped 33-percent in the early 2000’s, causing more job losses than the Great Depression. Because of these losses, U.S. industrial advocates are speaking out vehemently in support of green manufacturing as a vehicle to stimulate social and economic growth and have met with some success with the enactment of President Obama’s green initiative called “Blueprint for An America Built to Last.”

The Benefits of Going Green

The benefits of going green go beyond positive public perception and political approval. Green manufacturers also enjoy tax breaks for implementing environmentally friendly practices and can use those savings to expand their businesses and create jobs. Manufacturers with sustainable agendas can reap benefits that extend beyond specific political cabinets and fleeting party influences. By incorporating green practices into regular operations, enterprises can stay ahead of the changing laws enforced by the Environmental Protection Agency (EPA) and other government agencies. With sustainable strategy, manufacturers may outperform environmental mandates that arise in the future. Manufacturers can also use sustainable strategies to reduce their reliance on utilities and municipal services, such as electricity and waste disposal facilities.

Crowdfunding for Green

Crowdfunding is a hot topic and funding resource among green entrepreneurs. Green advocates can raise funds for initiatives of all sizes through the resource. The financial vehicle operates on the premise of many small investors showing support for a business or cause by providing funding. Individuals that seek crowdfunding for initiatives encourage investors to support a cause by offering incentives. In 2015, investors and supporters invested $34.4 billion dollars through crowdfunding, and as time goes on, the vehicle grows more popular with young Millennial benefactors between the ages of 25 and 35.

The following 5 crowdfunding methods review a few common practices that are popular among stakeholders.

Method 1: Issue Rewards to Supporters
When seeking funds for an initiative, entrepreneurs may use rewards-based crowdfunding. With this method, enterprise heads may offer a token of appreciation to donors, such as personalized thank you cards or free, or discounted, products or services. The method is favored among small startups that cannot shoulder heavy financial obligations.
Method 2: Give Them a Piece of the Pie
Business owners offer shares of their companies with equity-based crowdfunding. Speculators that have confidence in in the company vision and the long-term success of the enterprise then invest in the startup. This method is favored by entrepreneurs with solid growth potential, but comes with added responsibility, such as complying with regulations enforced by the Securities and Exchange Commission (SEC).
Method 3: Crowdfunding for the People
For public green initiatives, some initiative leaders seek civic crowdfunding. The structure of crowdfunding campaigns naturally generates awareness, encourages conversation and sponsors the exchange of ideas, making the funding vehicle ideal for promoting public causes. Crowdfunding is also a powerful resource for promoting public-private collaborations and providing a platform for community members to voice their opinions.
Method 4: A New Twist on a Traditional Concept

Marketplace funding is a hybrid product of traditional business lending and crowdfunding. Often, marketplace funding rates are lower compared to business bank loans. This vehicle may prove successful for entrepreneurs who have yet to establish a strong financial background.
Method 5: Crowdfunding for Good
Nonprofit initiatives may seek donation-based crowdfunding. With this method, donors offer financial support for causes that resonate with their beliefs. There are many online sites for launching this kind of fundraising campaign.

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Despite the method, entrepreneurs and nonprofits who hope to successfully raise capital must develop viable projects and have adept marketing acumen. Duly, individuals who seek crowdfunding should develop a unique angle, plan meticulously and generate interest before launching their campaigns. It’s the depth and merit of their stories that determine how many investors or supporters feel compelled enough to lower their resistance and give.

References:  Clean Technica, Entrepreneur, The Balance, The George Washington University School of Business, Nerd Wallet, University of San Francisco’s Online Master of Public Administration