Crowdfunding is all about collecting funds utilizing the power of personal and social networking. The cause for doing crowdfunding can be personal as well as social. People do crowdfunding for getting help to cover a huge medical bill to nonprofit funding for a social cause.
There are different types of crowdfunding. One among them is donation-based, where donor platforms allow you to raise money without any obligations to investors. Commonly seen donation-based causes are medical expenses, philanthropy, and disaster relief.
Equity crowdfunding is the next type, where the individual can invest in a premature company in exchange for shares of that company. This type is most suited for established businesses that need capital for expansion.
Another type of fundraising is rewards-based fundraising. This is mostly associated with platforms such as Kickstarter and Indiegogo. Individuals and businesses can raise money by offering a service or product in exchange for a campaign contribution, through a rewards system.
Even though the majority of the information here will be based on donation-based crowdfunding, it will be relevant across all types of crowdfunding as well. There are so many popular websites that fall into the category “donation”. Few among them are Fundly, Youcaring, and GoFundMe.
Benefits
There are several benefits of crowdfunding if you choose the right platform and enough promotion. A crowdfunding campaign has ample potential to raise a good sum of money in a short span. You can use crowdfunding to raise awareness about the cause along with raising funds for the same. Crowdfunding is a great way to bring people together for a common cause. It will instill a sense of purpose in them.
The process
If you have decided to execute crowdfunding, you need to first pick the right platform by your needs and cause. Set up your campaign and promote your fundraiser, as much as you can, in different ways of social and personal networking. Track the campaign’s progress and never forget to thank your supporters for their generous donations.
Best practices
Donors will always be keen to know the regular updates on what is happening to the campaign, of which they are a part, whether it be small or big. So try to post regular updates, which are not so long but to the point. This will indicate that you are invested in your campaign.
You should always try to include images and videos which are relatable to the cause or event for which you are raising money for. The donors will be more easily connected to visuals than words. So make sure to engage them by posting an image or video once every few days.
