An alternative method for funding social entrepreneurship in Turkey: A crowd funding model proposal

In recent years, social entrepreneurship has gained importance both in academic field and in real economy in multi-dimensional terms. However, there are some basic obstacles to the development of social entrepreneurship, which holds an important place in coming up with solutions to such problems as social, economic or environmental issues, among which "lack of financial resources" can be considered the paramount factor. It is commonly known that social entrepreneurs in Turkey generally obtain the finance for their enterprises from their equity capital, official sponsorship, donations, family members or relatives. Another important source of finance in this respect is the grant programs created for social enterprises. In our country, many grants and awards programs are carried out with the supports of public and private sectors along with civil society at local, regional, national and international levels with a view to financing social entrepreneurship. All these financial resources contribute to the socio-economic development of the country by supporting social enterprise. However, social entrepreneurs in our country do not benefit from crowd funding as much as necessary though this is an important financial resource and quite widespread for social enterprises all over the world. Crowd funding, the legal grounds of which were established in Turkey in 2017, is carried out through internet platforms on which those seeking funds for their commercial enterprises and the supporters willing to provide funds for such enterprises under certain conditions meet. An incremental prevalence of crowd funding will be able to serve as an alternative financial resource to contribute to the development of social entrepreneurship in our country. The aim of this study is to develop a crowd funding model proposal with a view to contribution to social entrepreneurship in Turkey. The major quality that distinguishes this crowd funding tool from its counterparts in Turkey and in the world lies in the fact that while it brings those seeking funds for their commercial or social enterprises and those willing to provide financial support for such enterprises together, it also designs the profit obtained from the transaction of finder's fee as a grant fund for social enterprises. Therefore, the model proposed in this study will also serve as a social enterprise that finances social enterprise activities. The importance and originality of this study lie in the fact that an alternative crowd funding model was proposed to solve the problem of access to finance as determined in this study. It is this proposal that distinguishes this study from those in relevant literature. Document analysis technique was used in order to analyze the subject problem, and studies in the relevant literature on entrepreneurship, social entrepreneurship and crowd funding were investigated in this study, which render it a qualitative study. Document analysis showed that social entrepreneurship does not have a commonly accepted conceptual framework yet, and it is often confused with areas such as social service delivery, activism, philanthropy, and corporate social responsibility. Another issue emerging from the analysis of relevant literature on social entrepreneurship is the determination of sectors appropriate for social entrepreneurship. This study shows that social entrepreneurship is applicable to all sectors. In this study, a crowd funding model called X Crowd Funding Platform was developed. The model proposed in this study differs from already existing platforms in Turkey in that it functions as a social business, it is a social enterprise, and it creates its own grant program through the profit obtained from finder's fees. Measures were identified to minimize the risks likely to be encountered in crowd funding system, which also differentiates this model from other platforms. Project owners willing to benefit from this platform could provide counselling in such areas as knowledge of the industry, network, mentorship, and marketing in order to minimize the chances of failure due to lack of experience in investments. Counselling could be provided for the likelihood of theft of project ideas, one of the risks in crowd funding system. Besides serving as an alternative source of fund for social entrepreneurs in Turkey, the model was also found to contribute to a rise in the number of people and/or institutions and organizations willing to invest in social enterprise or support social entrepreneurs financially. The model could also allow commercial or social entrepreneurs to promote their projects and reach masses on the internet. This model could facilitate social entrepreneurs' chances of access to opportunities, and thus contribute to the solution of social, environmental, and economic problems in Turkey, which could be considered among the important findings of this study. It is emphasized that the model developed in this study could make significant contributions to the development of social entrepreneurship ecosystem in Turkey, and it should be implemented with the collaboration of actors in state sector, private sector and non-governmental sector. It is proposed that such a collaboration could ensure the sustainability of the model and increase productivity. Key Words: Entrepreneurship, Social Entrepreneurship, Crowd Funding, Model Proposal