By: Gina Mason/June 14, 2013
Crowdfunding: the collective effort of individuals who network and pool their resources, usually via the Internet, to support efforts initiated by other people or organizations.
Crowdfunding is the latest trend in the fundraising world and is a practice that is growing at an exponential rate. Today, people are using crowdfunding platforms to help raise money for almost anything. From financing movies and start-up businesses to fundraising for charities, pageants or good causes, crowdfunding is going to have a huge impact on the way organizations structure their fundraising tactics. The possibilities are endless with crowdfunding and people are flocking to these easy-to-use sites to begin collecting donations from people not only in their inner circle but from all over the world. Even our own media news network, The Giving Carpet embodies the crowdfunding spirit by virtually connecting fans directly to their favorite celebrity’s charity to donate.
Now, some may question the validity of crowdfunding but according to the Crowdfunding Industry Report, nearly $2.7 billion dollars was raised through the use of crowdfunding platforms in 2012. With numbers like that, I don’t think crowdfunding is going anywhere anytime soon.
But with so many crowdfunding sites popping up daily, it may be difficult to decipher which one is best for you or your organization. It is important to understand the differences between the two basic models of crowdfunding in order to find the best platform to use. The first model is donation-based crowdfunding. This model is ideal for nonprofits; charities or good causes (i.e. helping a sick person pay for medical bills) looking to raise some money based on pure donations. In return for donations, some sites ask that the person or organization gives something back like a thank you card or a keychain. The second model is investment-based crowdfunding, in which people are investing in your project or business in hopes to gain some kind of financial return. Both types of crowdfunding can be successful and below are a few different (and reputable) sites that may be useful depending on the type of fundraising you are looking to do.
Kickstarter is one of the most well-known crowdfunding sites out there. It is a donation-based funding site that is best suited for people looking to raise money for arts-based projects, not so much businesses or charitable organizations. It is very common to find musicians, artists and journalists on this site looking to find people to donate to their projects. Recently, Kickstarter launched a hugely successful campaign to fund the Veronica Mars movie. Through the site, fans of the Veronica Mars TV show raised almost five million dollars so that the producers could have enough money to fund the long-awaited movie.
GoFundMe is a great site for events or charitable causes and is rapidly becoming one of the most used crowdfunding sites. Their easy-to-use site allows you to create a charity page with photos, links and enables users to share their page with their social media followers. This site features a variety of donation pages including from personal finance funding to raising money for clubs or sports teams.
When looking to expand you possible donors to an international level, Indiegogo is a great resource for reaching a broad audience. This site is a donation-based platform for almost any type fundraising campaign. Similar to GoFundMe, this site includes donation pages for personal finance needs, charities, music and more (the only exception is that this site is not for business startups).
Crowdrise is another great resource for charities and causes. This donation-based site attracts a lot of people who are looking to help others and donate towards inspiring and meaningful causes. Crowdrise also has a unique feature that tracks each member’s charitable impact as they donate.
If you are looking for funds for a business venture, Crowdfunder is a great site for you. This site incorporates donation and investment based crowdfunding for small businesses, social sites, tech start-ups and more. It has an innovative feature called CROWDFUNDx which connects local investors with local entrepreneurs both online and offline.
Crowdfuding is a great way for people to get involved with charities and an innovative twist on traditional fundraising. Long gone are the days of car washes and bake sales. We are living in a virtual world and just like online shopping, online funding is going to be the next big thing in fundraising. Whether you are trying to raise money for a cause or gain some extra capital for your business, crowdfunding platforms can be a great tool to help you fundraise. I hope you found this post to be helpful and best of luck to those who embark on a crowdfunding journey. Happy Funding!
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