It’s the first year that education crowdfunding site Wishbone has posted its application online, and in just two weeks they received 300 applicants.
The nonprofit organization is one of several that see crowdfunded education as a way to address the pressing issues of widening income gaps and crushing student debt.
Wishbone targets low-income high school students from the Bay Area and New York City who are looking to participate in high-quality summer programs that would be typically out of reach. The site launched in March 2012, and the startup has already funded 103 campaigns designed to help the students who created them.
One such student, referred to only as Gabby by Wishbone, was attending a high school in the New York City neighborhood of Astoria when she raised funds through to attend a program at Georgetown University, met several professors who helped her with the college application process and is now studying there.
Wishbone founder and Executive Director Beth Schmidt taught 10th grade English in Los Angeles from 2007 to 2009 when she realized that students were rarely asked about their passions and had little opportunity, given their socioeconomic status, to pursue them.
“I began to research the opportunity gap,” Schmidt said. “It’s unfair that these students couldn’t access these opportunities.”
Teachers, guidance counselors and other adults recommend students to participate in Wishbone — parents aren’t allowed — and the startup provides connections to a series of potential summer programs that offer immersion experiences, including the Young Women’s Leadership Institute at Barnard College, Summer@Brown Pre-College Program and iD Tech Camp at NYU.
“We have not yet put a student online who has not gotten funding,” said Schmidt, noting that the site’s growth may prevent the site from maintaining that success rate.
The site also meets the needs of teachers who want to help students and programs that want highly qualified, underserved candidates. In fact, she notes that some programs are so eager for Wishbone’s vetted students that they often agree to cover any remaining funding costs.
In exchange for future earnings
Startups are also providing alternative lending opportunities for students, giving them another option besides the traditional government loan. The model presented by sites such as Pave and Upstart turns an otherwise faceless financial transaction into a personal interaction.
Student-customers can raise funds to pay off debt, pursue an advanced degree, gain international experience or start a business. In return, they agree to pay a small percentage of their future earnings for anywhere from five to 10 years. Sal Lahoud, cofounder and CEO of Pave, said about 40 percent of those seeking support on Pave are looking to pay back student debt; the rest “tend to be entrepreneurs or creators.”
“It’s a very human way of doing things,” Lahoud said. “We encourage collaboration. You do well if your prospect does well.”
A big draw to crowdfunding debt is how it can empower promising youth, allowing them to gain the experience they need to pursue their passions. Some travel abroad, while others might learn to code or build a prototype. Current campaigns include an aspiring doctor at the University of Rochester seeking funds to pay for medical school; and a Stanford entrepreneur raising funds to launch her for-profit social venture that would provide backpacks to children in Columbia.
The mere presence of backers provides students extra incentive to push and succeed. Those with campaigns on Pave have 30 days to reach their minimum fundraising goal. Once they have been funded, candidates take an active role in determining the percent of their income that will go to pay off the loan, although it cannot be more than 10%. If their income should fall below 150% of the poverty line, they are not required to pay.
What successful users have in common
Other sites provide a more straightforward crowdfunding platform for individuals looking to finance specific educational goals or causes. Funding4Learning offers a platform for international students seeking smaller funding amounts for classes and professional training, while Rockethub funds projects with a social mission. Campaigns include higher education for disadvantaged groups in India, an online tutoring program for kids in foster care and textbooks for North Korean refugees. Backers are not investors, but philanthropists supporting worthy candidates to improve their chances of success.
Like any online campaign, to attract attention and funds, candidates need to have and deliver a compelling story. While sites provide a platform, and occasionally connections, Schmidt noted that candidates who come with early supporters in place — friends, family, community members — are most likely to generate interest and meet their goals.Tags: Business,Education,Entrepreneurship