6 Myths About Crowdfunding You Should Know
Crowdfunding has existed for a long time in different cultures and under different names. In African and Caribbean communities, there are money-saving and donation circles called sou-sou. Houses of worship may start a collection for a food drive or the victims of an accident. Nowadays, the internet helps individuals and groups draw on networks near and far to raise funds for medical care, charities, basic necessities, learning and education, animal rescue, as well as other causes or issues. Despite its growing popularity, myths about crowdfunding lead many to assume the process is time-consuming, expensive, and unsafe.
Let’s learn the truth behind six common myths about online crowdfunding.
6 common crowdfunding myths that should be busted
Myth #1: Starting an online fundraiser takes a lot of time
On GoFundMe, setting up a donation page is simple. You pick a funding goal, create a catchy fundraiser title, and choose the category that best fits your fundraiser. There are places to include media like videos and photos to share your story or issue with the world. Once you gather materials, it takes a few minutes from start to finish to create a fundraiser.
Myth #2: I can’t raise money for myself
Asking for help isn’t always easy. You may have been raised to believe that an ask for donations is shameful, a sign of failure, or a show of weakness. But in fact, everyone needs help at some point. If you’re having difficulty paying your bills, know that you are not alone. In 2019, the Federal Reserve found that three in 10 American adults don’t have enough savings to cover expenses for three months in case of an emergency. This means that millions of people are one job loss or illness away from financial hardship.
Fundraising for individuals is an effective way to get your or a loved one out of a difficult situation.
Myth #3: No one will want to donate to my fundraiser
Your friends, family, and community want to help you—all you have to do is spread the word about your cause. Small business advising firm Fundera gathered crowdfunding statistics that showed projects had 47 backers on average. It also found that if people shared the fundraiser via personal email, over half of the recipients donated to the fundraiser.
There are times when you may need help, and data shows that your network can get you to your goal. To that end, GoFundMe provides fundraising tips to help you get the most out of the platform.
Myth #4: Crowdfunding is only for serious emergencies
People come to GoFundMe for all types of needs. Raising money for funerals and memorials, education and medical bills, as well as businesses and entrepreneurs can all be done on the platform.
Many countries provide a lot of non-emergency money and services to residents in need. Compared to countries in Europe, for example, the US has a weaker social safety net. The COVID-19 pandemic has made gaps in the social safety net especially clear. A personal donation website can offset everyday costs when there is little help from the government or nonprofits.
Myth #5: Crowdfunding isn’t safe
Phishing schemes and big data breaches in the news make people worry about the safety of online donations. GoFundMe shares these concerns with you. That’s why it’s easy to safely use GoFundMe. GoFundMe’s Trust & Safety team works hard to verify donors. It also provides tips on how to determine if a fundraiser is legitimate before you donate.
When crowdfunding on GoFundMe, you’re covered by the first and only donor protection guarantee: the GoFundMe Giving Guarantee. We guarantee you a full refund in the rare case something isn’t right. This is one reason why millions of people have used GoFundMe to donate to causes they care about.
Myth #6: Crowdfunding sites are expensive
GoFundMe’s pricing is simple. In the US, there’s no fee to start or manage your fundraiser on GoFundMe. However, there is one small transaction fee per donation that covers all your fundraising needs. Everything else goes directly to your cause, because that’s what matters most. A transaction fee of 2.9% + $0.30 is automatically deducted from each donation, so you never have to worry about paying a bill. In contrast, other top crowdfunding sites have fees that range from three to 12%.
You’re a crowdfunding mythbuster now, so it’s time to start a fundraiser
If you’re considering starting a fundraiser, remember that people are generous by nature. It feels good to help someone in need. Myths about crowdfunding prevent people from asking for help, but myths are not reality. Now that you know the truth, you can start a fundraiser for yourself, a loved one, or a charity right away. For more information about how GoFundMe works, check out our video: