Crowdfunding harnesses the power of social networks and the internet to give people the means to raise funds, help others overcome hardship, and meet aspirational goals. The core principle behind the crowdfunding definition is that you can help a friend or help an entire community.
You can do everything from raising money for your surgery to fulfilling a student’s dream of attending college—and much more. You can also easily share your crowdfunding fundraiser via WhatsApp with friends and family or on TikTok and Instagram to use the power of social media.
If you’ve ever found yourself wondering, “What is crowdfunding?” “What does crowdfunding mean?” or “What are the benefits of crowdfunding?” then keep reading. We’ll answer your questions about crowdfunding and give you top tips on bringing in donations.
In recent years, crowdfunding has transformed the traditional fundraising landscape, breaking down barriers between those in need and those available to help them. Individuals contributed the highest percentage of charitable giving in 2022, accounting for 64% of the total $499.33 billion in estimated charitable giving. Crowdfunding has made it possible for people to directly support those who need emergency financial assistance, contributing to the larger trend of individual giving. People often turn to crowdfunding platforms when they can’t afford the rapidly increasing cost of medical care or health insurance and have to pay for out-of-pocket costs. In fact, enormous medical bills are responsible for 66.5% of all bankruptcies in America. So how does crowdfunding work?
Sometimes, when government and nonprofit funding falls short, getting the help you need can be challenging. That’s why crowdfunding platforms can be such a valuable resource. It allows you to reach out to your community for support in a way that’s easy and accessible. Whether you’re facing financial difficulties or hoping to impact the world positively, online fundraising can help you achieve your fundraising goals.
For those looking to discover crowdfunding basics, here are some of the main advantages of using crowdfunding sites:
The best way to define crowdfunding is to understand that it can work for anybody, and there is no cause too big or too small for crowdfunding. Crowdfunding helps bring people together to help others fundraise and ultimately thrive.
Some people might worry that their fundraiser isn’t as worthy as others—but crowdfunding exists to help an array of people and needs. Whether you want to help your pet, raise money to pay for a memorial, or get help with bills, crowdfunding can allow you to overcome the financial barriers that may stand in the way when you need it the most.
Crowdfunding services are not just for individuals seeking emergency financial aid. Businesses can also use them to raise capital and fund new projects. Entrepreneurs can also use crowdfunding efforts to finance their creative ideas or cover damages caused by burglary.
Donation-based crowdfunding: This type of crowdfunding is the most common when looking up “what is a crowdfunding campaign.” In donation-based crowdfunding, people search for and support a charitable cause by donating to it without receiving anything in return.
The person running the fundraiser isn’t obligated to pay back donors or give them anything else in return for their contributions. GoFundMe crowdfunding is one of the major sites that uses donation-based crowdfunding.
Equity-based crowdfunding: In equity-based fundraising, the fundraiser organizer accepts money from people looking to invest, typically to help launch a business. In return, investors will receive small equity in the business or company.
Rewards-based: Through rewards-based crowdfunding on platforms like Indiegogo and Kickstarter, the fundraiser organizer provides a reward or products to donors, usually a service or physical item, in exchange for a contribution.
Note: GoFundMe only allows donation-based crowdfunding.
Absolutely. Feeling nervous about asking for help when fundraising online for personal needs is understandable. However, it’s important to remember that financial difficulties are something that many people go through. You might be pleasantly surprised to find out just how many people are willing to lend a helping hand during tough times.
While there’s no magic formula for crowdfunding the most donations, you can definitely take steps to set yourself up for success. It’s crucial to develop a fundraiser that is captivating and resonates with your community. Investing time into your fundraiser story will inspire your network of friends and family to take action.
Our industry-leading fundraising tools help individuals, groups, and organizations share their stories far and wide. Even small donations can eventually grow into something extraordinary.
GoFundMe helps you quickly create a fundraiser and tell your story. You can raise money as an individual or invite others to join your fundraising team. Learn more about team fundraising.
Our sharing tools help you spread the word about your story via social media, emails, and even text messages. We make it easy to keep your network informed so you can raise more money quickly.
GoFundMe allows you to send donations directly to your or your beneficiary’s bank account, so you can get help right away.
Here’s what sets GoFundMe apart from the rest:
Backed by the GoFundMe Giving Guarantee, our platform is the safest, most secure place to give and receive donations. We have a dedicated Trust & Safety team that works day and night to prevent misuse and make sure funds reach the right hands.
The key to fundraising success is sharing your fundraiser with as many people as you can. With built-in social fundraising technology, GoFundMe crowdfunding makes it easy to spread awareness for your fundraiser so you can increase donations.
Our resource center offers proven fundraising tips to set you up for success. Our blog is packed with content that helps you drive more donations to your fundraiser.
From your title to your story and photos, your fundraiser story should be based on your needs and it should inspire people to donate. Before getting started, learn how to make your fundraiser successful with our fundraiser story tips. And don’t forget to upload several high-quality photos or a video to exponentially increase donations to your fundraiser.
Every time you share your fundraiser, you’ll bring in an average of $43 in donations—so share your fundraiser often on Instagram, Facebook, TikTok and other social platforms to encourage others to do the same. If you get enough momentum going, your fundraiser could go viral. Well-written updates with any news you share will keep supporters and potential donors engaged and in the loop.
It’s crucial to show donors that their contributions are greatly appreciated, just like we thank someone for doing a good deed. Instead of giving them gifts or rewards, sending heartfelt thank-you messages is an excellent way to let each donor know how much their support means to you.
Expressing gratitude can inspire donors to give even more and continue supporting your cause beyond the original crowdfunding goal.
Our blog post, How to Write a Donation Thank-You Letter That Gets You to Your Goal, will walk you through crafting the best thank-you possible. Be sure to check out our 20 Affordable Ways to Say Thank You to Donors list if you’d like to show your gratitude beyond an email.
Our crowdfunding lessons help make fundraising simple
More than $50M is raised a week on GoFundMe to support people like you
