Crowdfunding: The Basics
Crowdfunding is a means of raising money by asking a large number of people to donate a little bit of money each. It is a phenomenon that has grown hugely in the last 10 years and one that the charity sector has taken successfully under its wing in partnership with the internet.
Some cite the beginnings of crowdfunding as far back as 1997 when Rock band Marillion were unable to fund a tour and American fans used the internet to raise $60,000 so they could play in the US. The other big high profile event which kick started the sensation in recent years was in 2008 when the idea was used to fund Barak Obama’s presidential campaign. There’s no doubt that since then there has been a huge evolution in the number of websites set up to raise money for good causes.
Why is it a popular method of funding?
For those donating, the reasons for doing so via crowdfunding are the same as with traditionally donating – people are able to choose causes they really believe in and want to help.
Rewards are sometimes offered (this is called reward crowdfunding) such as acknowledgement on literature or similar, tickets to an event, a free gift etc but this is not the main motivation – people don’t expect anything back from donating to a charity crowdfunding project.
It’s genuinely felt that those giving funds really believe in the cause.
The whole process has no strings and does not feel daunting – one small one-off donation is all it takes from multiple people to help a charity or cause reach its goal.
For the charity itself, it can be a very fast and simple way of raising funds.
It encourages groups, friends and family to give and feels very inclusive. Donors through crowdfunding often feel a real sense of commitment and ownership of a project.
Specific projects can be very successful – when donors know exactly where that money is going and who it is helping.
Also, advertising your project online is valuable marketing: by making others aware of what you are doing may create an opportunity to get feedback and guidance on how to make improvements. This is particularly important for small charities to reach out to new supporters and raise their profile and awareness about what they are doing.
You may have seen our recent request for votes to secure funding from the Aviva Community Fund. Please vote and share with your family, friends and colleagues for this worthwhile cause. Thank you!