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Palm Beach County Millionaire Creates 'Crowdfunding' Web Site to Help People in Need

Palm Beach County Millionaire Creates 'Crowdfunding' Web Site to Help People in Need

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Published by: Crowdsourcing.org on Mar 03, 2011
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Palm Beach County millionaire creates'crowdfunding' web site to help people in need
By Angel Streeter, Sun Sentinel
11:06 p.m. EST, February 25, 2011 
Say you want to release your debut album but need funding for CDs and marketing materials.Suppose you're unemployed, broke and need a little cash to pay your rent.Maybe you want to raise money to help end genocide.There's a website that can help. The brainchild of Palm Beach Countymultimillionaire JohnFerber, the MicroGiving Foundation links donors to creative projects, start-up businesses, worthycauses and people in need.
People who need money post their project, cause or business idea onhttp://www.microgiving.comalong with how much money they need to raise. They typicallyoffer donors a small token in return: a promise to pay it forward, a copy of a CD, a special thank-you note.And then they wait for the money to roll in."We're sleeping and it's raising money," saidBoca RatonHigh School teacher Sharona Kay.Students in her Holocaust class started a nonprofit organization in 2007 that sells colorfultriangles in memory of Holocaust victims and uses the money to support global anti-genocideprograms.The group posted a profile and video on MicroGiving a couple of months ago and has raisedmore than $3,000.MicroGiving.com is part of a growing phenomenon called crowdfunding, in which people withsimilar interests pool their money online to support a specific project or cause.Ferber, who will be one of the featured millionaires onABC'snew reality show "SecretMilionaire" calls it the digital version of passing the hat.A number of crowdfunding websites have popped up in the recent years. Each specializes in aparticular area.KickStarter, for instance, allows creative types to post their projects ² a film, an art exhibit, aninvention.Kiva allows donors to provide microloans to poor people around the world to start businesses. AtDonors Choose, people contribute to education projects in needy classrooms.Ferber's initial idea for MicroGiving was to directly connect donors with people in dire straits.In the aftermath of Hurricane Katrina, Ferber, 37, donated money to a major U.S. charity but itwasn't satisfying to him, and it wasn't feasible for him to travel to New Orleans."I wanted to do more," he said. "I wanted to help people directly."It was the same frustration he felt when his sister-in-law died of cystic fibrosis. He gave tocharity, but he wondered: Where is this money going? Who am I helping?
Then in 2006, Muhammad Yunus won theNobel Peace Prize. The Bangladeshi economistdeveloped the concept of microfinancing, providing loans to poor entrepreneurs who can't gettraditional bank loans."I had a eureka of an idea," Ferber said. "Instead of a loan, it's a gift."He decided to create a website.Ferber made his millions through the Internet. He and his brother sold their 1990s startup ² Advertising.com ² toAOLin 2004 for $435 million.A Baltimore native, Ferber bought his home near Briny BreezesinPalm Beach Countythat same year and settled into the area.In 2008, MicroGiving launched. It featured people down on their luck. They had lost their jobs,couldn't pay their rent or utilities. They needed money for medical care. Some were escapingdomestic violence. Others needed to pay an expensive veterinary bill.The site, he said, eliminated the middleman ² charitable agencies.But it was a bad time to begin a charitable enterprise. The economy was tanking. And there weremore people in need than those able to give.Ferber ended up the major donor for many of the hardship cases.A few months ago, he and his team remade the website, expanding how people could useMicroGiving. With the crowdfunding concept gaining steam, they opened the invitation toanyone to post a fundraising request.But sticking to its charitable roots, the nonprofit MicroGiving Foundation, based inDelrayBeach, takes 5 percent to 10 percent of the money raised for a project or business idea anddirects it to a charity or needy person featured on the site.Donors also are given the opportunity to leave a tip for the site's giving fund, which goes topeople in need.Donations ² which range from $10 to $1,000 ² come in by credit card, but MicroGivingFoundation doesn't ask for information to track donors by location or any other means.The foundation does conduct background checks on those claiming to have a hardship, verifyingthat they truly are in need.

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