Financing losses from natural and man-made disasters by use of crowdfunding

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The level of insured losses from natural and man-made disasters occurred in the world from 2012 to 2016 did not exceed 30-45%. Therefore, it is necessary to study another perspective source of financing losses refunding from natural and man-made disasters. The objective of this research is to consider financing losses from natural and man-made disasters by use of crowdfunding, especially in emerging countries. It was defined that the most appropriate model of crowdfunding for financing losses from natural and man-made disasters is donation model with reward-based and donation-based business models. Stimulus for individuals to take part in crowdfunding for financing losses from natural and man-made disasters can be different depending on their location and business model. Sets of assessments based on four categories of questions and method of results visualization were used to examine a country’s readiness for crowdfunding on the example of Ukraine. Complete level of Ukraine’s readiness for crowdfunding was defined. It shows that reward-based crowdfunding is the first stage towards crowdfunding implementation and development. Further research should be done to investigate the mechanism of using a tax discount in case of implementation of the reward-based crowdfunding for financing losses from natural and man-made disasters.

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    • Figure 1. Stimulus for individuals to take part in crowdfunding for financing losses from natural and man-made disasters
    • Figure 2. Visualization of Ukraine’s readiness for crowdfunding
    • Table 1. The dynamics of victims and economic losses from natural and man-made disasters occurred in the world from 2012 to 2016
    • Table 2. The dynamics of victims from natural and man-made disasters occurred in Ukraine from 2012 to 2016
    • Table 3. Assessing a country’s readiness for crowdfunding: technology (A)
    • Table 4. Assessing a country’s readiness for crowdfunding: culture (B)
    • Table 5. Assessing a country’s readiness for crowdfunding: regulation (C)
    • Table 6. Assessing a country’s readiness for crowdfunding: capital (D)