Crowdfunding: the Future of Fundraising for Charities

In the past, giving was considered to be the preserve of the rich. This locked out persons who had genuine concerns for a cause and wanted to make contributions. Perhaps, their gift would be too little to be counted, or perhaps, it would not make any difference in the end. However, the emergence of crowdfunding has changed the whole concept of giving.

Crowdfunding is the practice where ventures and projects are funded through raising money in small amounts from a huge number of people, and practically through the internet and mail orders. However, the internet has gained greater popularity in comparison with the mail order system.

Crowdfunding was initially used by entrepreneurs to raise funds for their businesses, but today, charities continue to find it as a viable option for fundraising. The monies given to the charities are used for promoting social or environmental causes for which the money was raised. It enables charities to widen their online networks, increase awareness of the cause they promote, and reach new supporters.

The funds can be raised either directly by the charities through their websites or through crowdfunding platforms. In many cases, the platforms usually deduct a small amount of the money collected for purposes of their own administration and the rest is given to the charity. The advantage of using crowdsourcing platforms is that they are able to advance the campaign to a wider audience.

In order to maximise the potential gain when using crowdsourcing platforms, charities need to ensure:

  • They are clear on the specific project they would like to promote.
  • Their target is realistic as some platforms do not release funds until the target is reached.
  • They develop rewards that will stimulate their supporters to make pledges.
  • They develop trust for future campaigns through providing evidence that the monies were used for the right causes.

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