In its earliest manifestations, crowd funding was largely limited to appeals to individual donors to finance creative projects or urgent requests for funds to deal with serious medical conditions or recovery from some type of disaster. Those types of appeals still exist, but crowd funding has become more sophisticated, with real estate and business ventures being incorporated into the playing field.
There is no one crowd funding platform that suits every purpose – and individuals may even utilize different crowed funding platforms for different projects. Nonetheless, considering the categories below can assist with the selection process of the best possible crowd funding platform for a given campaign.
Eligible Campaign Types
Some crowd funding platforms gladly accept all comers; others have strict eligibility requirements. In general, crowd funding platforms tend to concentrate in a few broad categories: creative, nonprofit, real estate, business and technology and personal appeals. It's wise to check out other types of campaigns that are accepted – and that have been successfully funded, before embarking on the involved process of crating a platform and posting your appeal. This is especially true because many platforms do not allow users to delete campaigns that have been launched or which have received funding, no matter how small the amount.
Features and Customization
Most crowd funding services allow users to create custom URLs for their campaigns that can be shared with friends or posted on social media platforms. Some services allow users to integrate their campaigns into their own websites. Other useful features include dedicated mobile apps or mobile-friendly websites that allow users to monitor their campaigns on the go. Savvy users appreciate crowd funding platforms that include user analytics to illustrate the reach and effectiveness of individual campaigns.
Many crowd funding platforms allow donors to make contributions through multiple vehicles. Common options include money transfer services like Stripe and PayPal, as well as through credit and debit cards or even online checks.
In addition, some platforms operate on an all-or-nothing funding system, only making payouts if the full request amount has been pledged – and only after the campaign has ended. Others employ a “pay as you go” model, making credit and debit card payouts as they are received, even if the project fails to achieve its entire funding goal.
Most crowd funding sites include provisions for rewards – perks or gifts that people or organizations running fundraising campaigns provide to donors in exchange for pledges. Rewards can be relatively inexpensive, such as t-shirts, or lavish, such as backstage access to productions in progress. While rewards are usually not required, donors have come to expect them, and campaigns that don't offer any rewards are much less likely to be successful.
Almost all crowd funding platforms impose some type of fees for the use of their services. Most collect fees as a percentage of donations pledged, which means users must take fees into account when setting funding goals. Some platforms collect reduced fees from nonprofit organizations or from campaigns that meet or exceed their funding goals, while others waive fees for campaigns that fail to meet their funding goals.
Popular Crowd Funding Sites
- Kickstarter – screens campaigns before acceptance, all or nothing funding model
- GoFundMe – largely populated with personal appeals, e.g. money for medical treatment
- IndieGoGo – accepts all campaigns, option for all or nothing or p
- RocketHub – focused on science, education and projects promoting the social good
- PeerBackers – focused on innovation and entrepreneurs
- FunderHut – largely community oriented projects, provides consulting for an extra fee