What Is Crowdfunding? How to Finance Ideas for Rewards

Entrepreneurs need financing to keep the momentum going, but asking for money isn’t fun.

As a result, the road to securing funding becomes challenging. Traditionally, business owners rely on grants, venture capitalists, family members, friends, or their own savings to fund their ideas. 

The power of social networks and communities worldwide is changing these old traditions. More businesses are raising investments via crowdfunding.

Businesses and individuals use fundraising software to find donors for new projects or initiatives, manage the funding process, monitor campaigns, track funding efficiency, and develop long-term relationships with donors.

Michael Sullivan, an entrepreneur, was the first to use the term ‘crowdfunding’ while looking for backers to fund his video project incubator in 2006. The project failed, but the word succeeded.

History of crowdfunding

Crowdfunding as a financing method isn’t new at all. Companies used similar approaches to manage investment risks before the internet. Let’s look at a few early crowdfunding examples and how the modern form of crowdfunding emerged over time.

Alexander Pope and the Iliad

Alexander Pope, a young poet, set out to translate Homer’s Iliad to English in 1713. After completing 15,693 lines, he realized the lack of funds to publish the book. Pope came up with a subscription method that pre-sold the book. He asked people to donate, promising they would receive the copies first before the book became publicly available. Seven hundred fifty backers pledged two gold guineas (equivalent to $3,200) and got their names printed as subscribers on the book. This event began the crowdfunding reward system.

Mozart and his concertos

Mozart opted for a similar path while trying to raise funds for recently composed piano concertos in 1783. He pledged to offer manuscripts to backers. Initially, this crowdfunding project fell short of reaching its goals. However, after a year, Mozart got 176 backers when he tried the same project again.

Guarantee agreements in shipping

The shipping industry has used guarantee agreements as risk management tools for the longest time. These agreements between shipping companies and traders revolved around one simple idea: profit sharing. 

All parties to the contractor or guarantors paid the loss in the event of cargo loss and received proportional profit shares upon safe cargo arrival. These guarantees played a crucial role in helping companies analyze risks and diversify high-risk projects. 

The Irish Loan Fund

The modern crowdfunding principles didn’t emerge until the early 18th century. Jonathan Swift, the forefather of microcredits, founded the Irish Loan Fund in 1700 to offer small loans to low-income rural families without collateral or credit history. 

Private investors came together to loan small funds to these families for short periods. Prosperous citizens saw this as an opportunity for a philanthropic endeavor and set the stage for how crowdfunding works today. 

The Statue of Liberty project

The Statue of Liberty was one of the recent crowdfunding campaigns. Joseph Pulitzer launched this campaign in the US in 1885 to erect a pedestal for the neoclassical sculpture. He promised to publish the name of all donors in his newspaper, The New York World, regardless of the donation amount. More than 150,000 donors contributed $100,000 toward the project. Most of these donations were small, ranging between a few cents and a dollar.

Fan-based funding by Marillion

The British rock band Marillion collected $60,000 from fans to fund their tour in the U.S. between 1996 and 1997. Fan-based funding gained popularity because of this event and other fundraising. The increasing accessibility to the internet made it possible for such events to reach a larger crowd.

ArtistShare and modern crowdfunding services

Brain Camelio, a computer programmer and musician, launched ArtistShare in 2013. This fundraising platform was one of the first modern crowdfunding services. It started as a website that musicians could use to pool funds from fans to produce digital recordings.

The first crowdfunding project on ArtistShare was Maria Schneider’s jazz album Concert in a Garden. The campaign offered a tiered reward system that followed in the footsteps of Alexander Pope’s Iliad project while setting the stage for today’s reward-based crowdfunding.

The rewards were as follows:

• Access to the first download of the album for a $9.95 contribution 
• Album download and mention in the album’s accompanying booklet under the section “who helped make this recording possible” for a contribution of $250 or more
• Executive producer credit with a contribution of $10,000

Maria’s ArtistShare campaign raised $130,000 and won a Grammy Award for the best large jazz ensemble album in 2005.

The fundraising world saw the launch of many crowdfunding sites following ArtistShare’s success. Popular American crowdfunding websites Indiegogo and Kickstarter launched their websites in 2008 and 2009. These platforms made it possible to launch funding campaigns for fine arts, photography, creative projects, theater, environment, community, health, religion, gaming, technology, and sports.

Legalization of equity crowdfunding

Crowdfunding didn’t gain Washington’s support until 2012, when President Barack Obama enacted the Jumpstart Our Business Startups (JOBS) law, otherwise known as the crowdfunding bill. This act legalized equity crowdfunding and removed the general solicitation ban on publicizing fundraising. 

Crowdfunding has continued to change the fundraising landscape ever since. 

The highest funded crowdfunding project

Fantasy writer Brandon Sanderson created a crowdfunding campaign to self-publish four novels he penned during the pandemic. The campaign surpassed the goal of one million dollars in three days. Brandon’s project secured more than $20.8M from 84,600 funders in three days. Brandon’s self-publishing crowdfunding project remains the highest funded crowdfunding campaign to date.

Types of crowdfunding

Online crowdfunding software solutions bridge the gap between fundraisers and the crowd. These platforms offer an easy-to-use interface and facilitate secure fundraising for nominal processing fees. There are two types of crowdfunding based on donors' rewards for funding projects or initiatives.

1. Donation-based crowdfunding

Donation-based crowdfunding (DBC) is the simplest form of fundraising. In this model, donors fund a charitable project with no return in exchange. Such donors deeply care for cultural groups, social projects, local communities, and creative initiatives. 

DBC donors rely on acquaintances and social media instead of nonprofit consulting providers to find suitable fundraising projects. Personal connections also influence backers’ decisions in such donations. 

Donation crowdfunding features

Charities, nonprofit organizations, and social causes use DBC to raise funding for specific efforts or causes. For example, charities looking to search, rescue, recover, and treat disaster victims crowdfund donations. Some of the features of this crowdfunding model are as follows:

• Wider reach. Donation initiators use social network platforms to promote campaigns, interact with funders, and receive funds. They also leverage contextual targeting to place ads on relevant websites and generate interest among the non-local target audience.
• Philanthropy at heart. DBC donors may receive gratitude messages from fundraising organizations but don’t expect material rewards for their contributions. Also, fundraisers don’t have any obligation to pay back funders.
• Targets active donors. DBC focuses on active donors instead of those passively waiting for funding opportunities. Since active funders often share funding opportunities with their network, campaigns reach even more like-minded audiences.
• Less coordination and transaction costs. Fundraisers can launch campaigns and raise donations using crowdfunding engines available on the internet. This ease of creating and executing campaigns saves on donor fees and infrastructure costs.
• Collects small amounts from large crowds. DBC doesn’t rely on extensive collections from affluent funders.

2. Reward-based crowdfunding

Reward-based crowdfunding (RBC) or seed crowdfunding offers non-financial returns to individuals lending small amounts of money to a project. These rewards can be products, services, perks, or recognition. RBC initiatives rely on the collective efforts of others to fund entrepreneurial or social projects. Like DBC, RBC uses online fundraising channels to reach a vast population. 

RBC projects don’t compel project owners to give away equities. Projects using this type of funding become independent of investors after fund collection. However, fundraisers should fulfill the reward promises.

Reward crowdfunding features

Reward crowdfunding campaigns appeal more when they match funders’ personal beliefs and preferences. Artists, product manufacturers, and technology enthusiasts use this funding method to drive home funds for completing dream projects. Here are the key features of this funding model:

• Eases market research and testing. Reward crowdfunding is an excellent channel to test the waters, especially when launching a new product. Early-stage businesses should see this as an opportunity to test the market potential and see whether people are willing to pay for their product. Ultimately, the idea is to engage with your customers, collect feedback, and improve product offerings.
• Rewards material and immaterial compensations. For example, an RBC campaign can offer pre-orders, recognition, or services.
• Helps gauge demand and supply for new products. RBC campaigns serve two-sided markets, campaign creators on one side and contributors on the other.

The following typology from the research paper Crowdfunding: Motives, Definitions, Typology and Ethical Challenges by Mokter Hossain and Gospel Onyema Oparaocha explains the similarities and differences between crowdfunding models.

Other popular crowdfunding types

Some crowdfund for causes they care about, while others use it to fund business projects. Below are a couple of popular crowdfunding campaign types depending on funder motivation and project cause.

• Royalty crowdfunding or royalty-based crowdfunding (RBC) follows a profit-sharing model to reward investors with a percentage of revenue once a venture starts generating revenue. The investors aren’t shareholders in this model and may expect returns before the project is profitable.
• Change for civic crowdfunding finances civic initiatives within cities, municipalities, or larger geographical territories. Civic crowdfunding projects often have local governments or public bodies as co-funders. Such projects usually fund public infrastructures or projects for the greater public good.
• Real estate crowdfunding invites a pool of individuals to contribute toward specific real estate deals. Such projects enable potential investors to explore real estate investment opportunities and become shareholders in assets of their preference. Real estate developers see crowdfunding as a hassle-free means of raising and accessing capital for a real estate development project.
• Regulation crowdfunding enables organizations to offer or sell securities via crowdfunding. All such transactions must take place online under the supervision of a Securities and Exchange Commission (SEC) registered broker-dealer or a funding platform. Regulation crowdfunding allows companies to raise a total sum of $5M annually through crowdfunding.
• Hybrid-based crowdfunding uses one or more seasoned lead investors as the face of a crowdfunding campaign to invite other smaller funders to donate. Lead investors show their confidence in the project by investing a large sum of money. Other small donors rely on the lead investor’s opinion to decide their level of support toward the project.

Crowdfunding vs. peer-to-peer lending

Crowdfunding is what it sounds like: raising money from people. These people donate to crowdfunding campaigns for philanthropy, rewards, recognition, and equities. Crowdfunding involves collecting money from multiple backers with the help of a crowdfunding platform. This mode of capital raising is suitable for startups, charities, and individuals looking to access alternative funds for projects or initiatives.

Peer-to-peer (P2P) lending is a business financing model in which individual investors provide funding to businesses as loans or credit lines. Such loans cater to financing needs for mortgages, invoice financing, pawn-broking, car purchases, and personal expenses. 

P2P investors use P2P platforms or loan origination software to extend loans to borrowers. P2P lending sites connect suitable borrowers and lenders based on borrowers’ past credit scores and financial history. 

The difference is that crowdfunders pool their assets together to fund a project, whereas P2P lenders fund business loans and expect returns.

Crowdfunding platform structure

Crowdfunding platforms present win-win-win opportunities for investors, customers, and entrepreneurs. They act as open, multi-sided networks for businesses and investors to connect. Let’s look at how each of them contributes to the crowdfunding process.

Fundraiser

A fundraiser is a campaign created by an individual or organization to invite funders for financing. Fundraisers or campaign creators use crowdfunding to raise money and test market validation for a product. A project’s public acceptance helps them gauge future support, engage with prospective customers, collect feedback, and boost brand awareness with cost-effective marketing.

Sponsor

A sponsor or donor is an organization or individual who supports a crowdfunding project with financial backing. Sponsors are also known as lenders, backers, funders, or investors. Crowdfunding projects create a sense of community belonging among investors and allow them to influence product designs.

Crowdfunding platform

A crowdfunding software system is an internet application that acts as an intermediary between fundraisers and sponsors. These platforms specify conditions that fundraisers must meet while creating fundraising projects. Crowdfunding solutions make money by charging campaign fees. Successful campaigns help these platforms gain popularity and attract potential fundraising campaigns.

Public authorities

Public authorities don't directly play a role in how crowdfunding works, but they do influence how the crowdfunding industry develops. They create more jobs, ensure public contribution to civic causes, and set compliance requirements to protect investors and fundraisers.

How does crowdfunding work?

A crowdfunding campaign goes through multiple stages, each requiring focus and effort. Investors or fundraisers shouldn’t expect quick wins while running crowdfunding campaigns.

Fundraisers divide the crowdfunding process into pre-campaign, campaign, and post-campaign phases.

Pre-campaign phase

The pre-campaign phase involves how fundraisers research, create, and review campaigns before publishing. Crowdfunding projects go through three distinct stages during this phase.

1. Campaign planning: Fundraisers create and define campaign objectives and goals at this stage. During this phase, they evaluate crowdfunding software solutions and create textual or visual branding materials. Campaign planning ends with finding the most suitable crowdfunding platform and outlining deadlines.
2. Campaign creation: At this stage, campaign creators upload materials to crowdfunding platforms and establish social media presence across Facebook, Twitter, and Instagram. Campaign creation ends as creators collect initial feedback from pilot users and implement necessary changes.
3. Campaign review: This is the last stage of pre-campaigning. During this phase, crowdfunding systems review materials, ensure regulation compliance, and verify fundraiser identity. The crowdfunding campaign goes live when the platform approves it and makes it available for the public. Donations can now be collected.

Campaign phase

The campaign phase begins as a campaign goes live. Fundraisers use this phase to:

• Promote a campaign via offline and online channels
• Provide updates to fans and followers on social media platforms
• Establish network relations and connect with like-minded donors
• Respond to suggestions, questions, and comments from potential investors
• Connect with journalists, influencers, bloggers, and experts to keep a campaign alive

The campaign phase finishes once a campaign reaches the end date.

Post-campaign phase

The end of a campaign leads to the post-campaign phase. 

Crowdfunding software platforms use this phase to finalize campaign results and declare the total amount raised for campaigns. Depending on the scheme fundraisers choose, here’s what could happen at this stage:

• All-or-nothing campaign: Crowdfunding platforms deduct platform fees and pay out the fund only if the campaign meets its sum amount goal. Otherwise, the platform initiates payment processing for returning contributions to funders. An all-or-nothing project attracts bigger pledges but shouldn’t be your go-to choice when you really need the funds.
• Keep-it-all campaign: Some crowdfunding tools offer flexible funding models. They keep the fees and pay out the rest regardless of whether a campaign meets its goals or not. 

Fundraisers must fulfill their promises after raising funds. Such campaign deliverables may include products, services, loans, and interests. A fundraising individual or organization also informs investors about growth plans, financial status, and plan changes at this stage. 

First-time fundraisers should take time to develop relationships with potential future investors during this stage. Use social media channels to keep your target audience up-to-date about the project's progress. Such communications and social capital will help you in future fundraising activities and even product development initiatives. 

Crowdfunding and income taxes

The money earned through crowdfunding may be taxable, depending on its nature. The Internal Revenue Service (IRS) suggests all parties maintain good record keeping and specifies the following obligations:

• 1099-K for money raised through crowdfunding: Crowdfunding websites or payment processors may have to fill out Form 1099-K to report money distributions upon reaching certain thresholds. The person receiving such distributions should also receive a copy of the same form. However, the American Rescue Plan Act clarifies that such filing isn’t necessary when contributors receive goods or services.
• Tax on money raised through crowdfunding: The federal tax law considers all incomes part of the gross income irrespective of their sources. However, a person receiving property as a gift can’t include it in their gross income.
• Record keeping for money raised through crowdfunding: Crowdfunding organizers and receivers must keep accurate fundraising and fund disposition records for at least three years.

Benefits of crowdfunding

Whether you’re looking to raise capital quickly or bring your product idea to millions of people, crowdfunding is an excellent way to begin for businesses and startups alike. Take a look at these major benefits of crowdfunding to understand how it can help you bring your idea to life.

Raising capital

Raising funds for a venture is perhaps the most difficult job for an entrepreneur just starting out. Crowdfunding platforms empower them with capital support from crowdfunding communities.

This flexibility changes the traditional investment landscape where entrepreneurs have to chase banks, investors, or venture capitalists for funding. The best part is that crowdfunding campaigns don’t always require new businesses to give away equities to receive funding.

Validating product demand

Starting a new business or pursuing a new idea is a risky affair. Predicting expenses and forecast challenges is difficult. Crowdfunding comes to the rescue not only with funding, but also with product-market fit testing.

As funders ask questions about product value and customer satisfaction measures, you’ll be more aware of what your product is missing. Before launching your campaign, don't forget to conduct market research to understand the customers' pulse. Use the feedback from donors and market research to fine-tune your product or idea.

Gaining a competitive edge with branding

Crowdfunding campaigns can make or break your product or service brand. Imagine the number of people looking at your offerings, evaluating your values, and finally sharing their opinions.

This is why popular brands use crowdfunding to promote social causes and generate organic traffic to their websites. Consider showcasing your passion, mission, and vision to connect with donors and pique their interest.

Getting some early sales

Crowdfunding is a great way to establish a sales channel and offer freebies in exchange for funding. The early adopters give you authentic feedback crucial for identifying product flaws and ways to improve.

These early sales are applicable for rewards-based crowdfunding campaigns. You should also leverage relationships with investors to reach potential new clients and onboard them as paying customers.

Boosting public awareness

Revolutionary ideas never go unnoticed. If your product is a game-changer, it’s highly likely that it will receive media attention and public relation (PR) coverage. These reports can establish brand credibility, initiate conversations with potential shareholders, and get more eyes on your products.

Disadvantages of crowdfunding

Despite so many benefits, crowdfunding has a negative side, too. Take a look at these disadvantages and what you should avoid.

Prepare for rejection

Crowdfunding platforms evaluate project details diligently and study paperwork to make sure you’re following the rules. While some crowdfunding platforms are easier to work with, some are extremely strict. That’s why having an idea or a product doesn’t guarantee campaign visibility.

Strategize to edge out competition

A live crowdfunding project is as small as a tiny star but has all the capability to shine. The crowdfunding world is full of projects and initiatives. It’s difficult to raise funding unless you find a way to differentiate your project, humanize it, and get people excited about making it happen.

All-or-nothing

Some crowdfunding platforms don’t fund projects until they reach the specified threshold. Donors receive their funds back under such circumstances. Be careful in selecting the crowdfunding tool and spend time reading rules and regulations.

Protect ideas

Idea stealing is another disadvantage of crowdfunding. Others can easily copy your idea once you upload a prototype to showcase the product value or design. That’s why it’s essential to file for copyrights before releasing prototypes online.

For example, Fidget Cube became super popular on Kickstarter and soon, other manufacturing companies started offering similar products at far lower prices.

Crowdfunding use cases

Crowdfunding makes ideas visible by funding and supporting them. While your crowdfunding campaign strategy may differ based on your idea, here’s how different industries leverage crowdfunding.

Philanthropy

Crowdfunding is suitable for philanthropy and civic projects that seek support from global communities and ordinary web users. In such cases, organizations create crowdfunding campaigns to attract people with causes close to their hearts.

These causes inspire people to understand the project's impact and donate accordingly. Campaigns like these create a sense of urgency and motivate people to act immediately. 

Examples of philanthropic campaigns include disaster relief, donation funds, and time-bound projects. 

Science

Scientific research is another area that attracts curious individuals with crowdfunding opportunities. Research donors believe in supporting how science can change the world.

These contributions to specific research areas allow scientists and medical professionals to exercise intellectual freedom, build credibility, and solve real-life problems. 

Science-related crowdfunding projects often focus on finding cures to rare diseases,  conducting clinical trials, and researching new phenomena. 

Startups

Crowdfunding software systems have enabled startups to receive support from entrepreneurs and investors instead of relying on friends and family members. Startups dealing with new-edge technology use crowdfunding platforms to create brand awareness and reach larger audiences. 

For example, Oculus VR, a virtual reality platform for gamers, raised more than $2.4 million dollars from 9,522 backers in 2012. Facebook acquired the platform later in 2014. 

Real estate

Real estate crowdfunding pools capital from investors to fund real estate mortgages. These fundings acquire distressed mortgages, redevelop abandoned properties, and gain equity in commercial or residential real estate projects. Real estate businesses use crowdfunding to participate in a wide range of deals and streamline tedious processes.

Journalism

Journalists or news organizations use crowdfunding to challenge journalistic norms, fund new initiatives, create collaborative projects, and access information beyond reach. Crowdfunding platforms also help individual storytellers and small publications share their stories without support from major players. 

This freedom enables them to be the torchbearers of truth. Some journalism projects also create fundraising projects to meet travel or equipment expenses. Donors use crowdfunding opportunities to fund publications or topics that interest them.

For example, Press Start is a global crowdfunding platform that brings together funders and journalists to share stories that matter and foster independent journalism. 

Crowdfunding best practices

There are so many crowdfunding platforms hosting many projects with various aspirations. How do you make yours a success? Take a look at these best practices to understand how you can differentiate your project.

• Be specific in your project vision and mission statement to give donors a sense of what you’re trying to achieve. For example, if your project saves children from malnutrition, make sure the project statement addresses who, why, and how. Here’s an example:
  
  Help us build a hunger-free future by feeding nutritious foods to malnourished children. 
• Measure momentum as you pursue these goals. Showing how you measure and communicate progress helps you convince and impress donors.  For example:
  
  Fundraise $5,000 to safeguard 50 children from malnutrition every year. 
• Check if your goals are achievable. Organizations often want to set huge goals, but that may make donors feel inadequate and withdraw from donating. Use previous crowdfunding campaign metrics to check if your goals are feasible. 
  
  

  Here's a checklist to follow for achievable goals:

  • Increase your fundraising goal only up to 50% of the previous campaign goal.
  • Forecast the total donation amount by multiplying the average number of donors with the average donor size.
  • Schedule donation drives for seasons when donors tend to donate more (i.e., in December).
  • Measure the resources that you have to engage donors and ensure proper communication at all stages.
• Tell your story. Story or cause-driven crowdfunding campaigns are best for collecting one-time donations. Don’t forget to communicate the local or global level implications of your crowdfunding campaign.
• Work with a deadline. Setting deadlines early helps your team to reach the fundraising goal and creates an urgency among donors. 

Fundraising software

Choosing the right fundraising platform is essential for meeting nonprofit campaign goals on time. You’ll come across different software with varying platform structures, fees, payment methods, support options, and restrictions. These top fundraising platforms bring projects to life.

To be included in this category, the software product must:

• Offer multiple donation and gift options
• Provide one-time or recurring donation or gift options
• Enable users to create, manage, and monitor campaigns
• Evaluate donor contribution data with reporting and analytics
• Streamline donor information and communication for existing and potential donors

*Below are the top 5 leading fundraising software solutions from G2’s Spring 2022 Grid® Report. Some reviews may be edited for clarity.

1. Network for Good

Network for Good is an all-in-one fundraising platform that helps you raise funds, analyze donor data, manage contacts, and visualize campaign progress. This easy-to-use platform streamlines all fundraising activities from one place and builds relationships with donors. 

What users like:

“Network for Good works well as an all-inclusive fundraising and 'supporter' management system. We love using it for more than just fundraising: keeping in touch with supporters, communicating information about our nonprofit, and more. Great to have all our tools in one place.”

– Network for Good Review, Marina G.

What users dislike:

“Sorting through data can be a little tricky. It would be better if the categories were alphabetized when creating filters. We are not that good at using the household feature to combine people with the same address.”

– Network for Good Review, Deanna M.

2. Bloomerang

Bloomerang is a complete donor management solution that eases how you engage and retain donor communities. The platform also offers engagement scores and wealth screening to help you discover new opportunities and fine-tune fundraising efforts.

What users like:

“Bloomerang is not only an improvement from the other donor database I inherited. It has lots of hidden gems that, after two years, I am discovering. It is relatively easy to learn with tons of videos, tips, and instant online help when needed. I can send emails fairly easily to my entire database or be selective. It interfaces with MailChimp and Stripe. Yup - definitely a good fit for our nonprofit!”

– Bloomerang Review, Pamela B.

What users dislike:

“I get frustrated by the limitations with reporting. The ability to add multiple layers to a report is difficult because of the horizontal fields. Yes, multiple reports can be exported to Excel, but this just adds to the time and effort put into the process.”

– Bloomerang Review, Pam M.

3. Classy

Classy is a leading fundraising software that helps you create high-performing donation pages and optimize donor experience. You can also create ticket events, P2P campaigns, and recurring optimized donations.

What users like:

“Classy as a donation tool is highly effective, and the support team is highly responsive – and really wants us to do well in raising funds for our cause. They also offer webinars and an ever-expanding set of tools with their users in mind, including the recent integration offering with Double the Donation, making it very easy to impact donations in a very easy-to-use tool. As an organization, Classy transactions sync with Salesforce, enabling us to centralize donation activity.”

– Classy Review, Kris J.

What users dislike:

“Classy is fairly expensive. It's worth crunching the numbers to see how much you're raising online vs. mailed before signing on.”

– Classy Review, Rachel C.

4. OneCause

OneCause is a mobile bidding and auction software that empowers cause-driven organizations with easy-to-use fundraising solutions. The platform features online giving, P2P fundraising, event management, and mobile bidding capabilities.

What users like:

“I love the helpful, kind support that I receive from everyone at OneCause. From starting our account to support to consultation, I've only had great experiences both years that we have used OneCause.”

– OneCause Review, Kaitlin B.

What users dislike:

“Uploading images into our site was somewhat of a struggle. The software/website was very particular about the size of the image, but the directions were not very clear. We had to work extensively with a graphic designer to get the image to work well. Because this was the first year for our event, there was a learning curve for us, but more explicit directions would have been helpful.”

– OneCause Review, Asheley H.

5. Givebutter

Givebutter is a free, end-to-end fundraising platform that helps you raise funds with modern forms, campaigns, tools, and events. The platform also allows you to create live streams, run donation drives, and customize tickets and campaigns.

What users like:

“Givebutter is an extremely easy and comprehensive platform. The aesthetic giving pages, forms, and event sites provide all of the tools I need as a small nonprofit to compete with larger nonprofits with more resources at a minimal cost.”

– Givebutter Review, Macy B.

What users dislike:

“It's a little confusing that creating a team is required, and it would be nice to have individual vs. team leaderboards. I'd also love to put the individual fundraisers' story  more prominently on their fundraising page.”

– Givebutter Review, Grant B.

Back them when you can!

Crowdfunding has secured its place in the broader alternative finance ecosystem over the last decade. Aside from individuals, companies of all sizes rely on crowdfunding to give life to their ideas. 

Crowdfunding’s egalitarian, idealistic, and optimistic nature gives the power back to the people. That’s why more businesses are looking to raise initial investments and even venture capital with crowdfunding, despite changing crowdfunding regulations. 

Learn more about fundraising trends in 2022 and how contactless experience will become a key element of nonprofit fundraising strategies.