Crowdfunding is the practice of raising funds for various types of endeavours, such as product ideas, businesses, or activities. Although it sounds modern, this practice has actually been around for centuries. The history of crowdfunding can be traced back to the past, when individuals or groups sought financial support from the community to realise their projects or ideas. This article discusses the history of crowdfunding in 2 parts: the first part discusses the history of crowdfunding from its inception to the 19th century, and the second part discusses the history of modern crowdfunding.
History of Crowdfunding from the Beginning to the 19th Century
In the past, crowdfunding was used by nobles and the wealthy to fund artists and intellectuals. One early example is Alexander Pope, a poet and translator of ancient Greek literature. As Pope translated these classics, his readers raised funds to support his endeavours. With this financial support, Pope was able to continue his work without having to worry about daily living expenses.
A similar case happened to Wolfgang Amadeus Mozart, a famous composer who initially struggled to organise concerts. In those days, organising concerts cost a lot of money, and Mozart did not have enough funds. However, his fans got together and raised funds to support his concerts. In this case, the donors received rewards in the form of concert tickets or other rewards, a concept now known as reward-based crowdfunding.
The practice of collective fundraising also dates back to the 18th century. Jonathan Swift, an Irish writer and priest, established the Irish Loan Fund. This fund lent to low-income families in Dublin. The loans were provided by a group of wealthy individuals who saw the Irish Loan Fund as a way to collectively support the poor. In a modern context, this resembles crowdlending, where funds are lent to individuals or small businesses in the hope of getting the funds back with interest.
Another example of crowdfunding in the past was the fundraising for the Statue of Liberty in 1885. At that time, France wanted to move the Statue of Liberty to New York as a gift, but the project was hampered due to lack of funds. Joseph Pulitzer, a famous newspaper publisher, started a fundraising campaign through his newspaper, “The New York World.” In this campaign, Pulitzer offered a small version of the Statue of Liberty in exchange for donors. The campaign raised enough funds to bring the Statue of Liberty to New York, and it is now one of New York City’s icons.
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Conclusion
Crowdfunding in the past was not as efficient and organised as it is today, but the basic principle remains the same: raising support from many people to fund a project or venture. Donors back then gave their funds in the hope of supporting a cause they believed in, and often they received rewards as a token of gratitude for their support.
Crowdfunding has undergone many changes since the past, but this history shows that the basic idea of collective fundraising has been around for a long time. With the development of technology, especially the internet, crowdfunding has become more accessible and efficient, allowing more people to participate in supporting projects they care about.
Overall, the early history of crowdfunding shows that while the methods and tools used have changed, the spirit of collaboration and collective support remains at the core of the practice. From supporting artists like Pope and Mozart to raising funds for the Statue of Liberty, crowdfunding has played an important role in realising many great projects throughout history.
In the second part of this article, we will discuss the history of modern crowdfunding, from its emergence in the 20th century to its use in the modern era and it’s history in Indonesia.
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Wallahu a’lam
References:
Nugroho, A. Y. (2019). Fenomena perkembangan crowdfunding di Indonesia. Jurnal Ekonomi Universitas Kadiri.
Zhao, Y., et al. (2019). Crowdfunding Industry—History, development, policies, and potential issues. Journal of Public Affairs, 1-9.
Wirawan, C. B. (2023). Sejarah Perkembangan Crowdfunding. Unpublished manuscript.