When trying to start a new program or venture, raising money is one of the biggest hurdles. You can and should apply for grants, or reach out to people who can make large donations. But a valuable method of fundraising that you should definitely think about is crowdfunding. When crowdfunding, you can get support from a group of individuals who believe in your idea and want to bring it to reality. It is a great way to build community while you’re fundraising.
According to Fundly’s latest report, crowdfunding sites have allowed entrepreneurs around the world to fundraise for their businesses and causes, adding $65 billion in revenue to the global economy in 2020.
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How does crowdfunding work?
Crowdfunding (not to be confused with peer-to-peer fundraising) is a funding strategy that focuses on raising smaller donations from a larger collective of individuals. This is a different approach from more traditional fundraising, which relies on raising large sums of money from foundations or people who can make large investments.
Crowdfunding “backers”—as they're often called—can be offered a number of incentives in exchange for their support. You can choose what incentives make the most sense for your organization and program. Here are a few potential options:
- The opportunity to see the behind-the-scenes of the new project
- The option to have a say in the development of the project
- Exclusive rewards like an early bird discount or free swag when the project launches
- Personal access to the team or the chance to support people they know personally
In exchange for hosting, Crowdfunding sites charge a platform fee (either as a monthly rate or a percentage of money raised), a transaction fee, a payment processing fee, or some combination.
While every crowdfunding site has its own unique features, overall fee structure, and user base, the core concept is the same: you submit your project to the platform with a fundraising target and a deadline and then campaign for support online, often through social media. Here’s a helpful guide to leveraging social media for your nonprofit fundraising campaigns.
So, what are your options for raising funds via crowdfunding platforms? Let's take a look at some of today's best crowdfunding websites spanning a variety of use cases, you can use to raise funds for your next campaign.
Best Crowdfunding Sites in 2022
1. Kickstarter
Kickstarter is almost synonymous with crowdfunding, and is the most popular fundraising platform where creative projects can find support. Since launching in 2009, the Kickstarter community has helped more than 200,000 projects raise funds—spanning art, technology, publishing, design, and more—to the tune of $5.9 billion.
Kickstarter is a reward-based fundraiser platform. Backers are offered incentives to support a project. You can offer different tiers of rewards and the more money a backer pledges, the better the rewards they can unlock.
Kickstarter campaigns are all-or-nothing, which means you only get access to your funds (and pay Kickstarter's platform fee) if you meet your initial fundraising goal. If you fall short, then the funders keep their money.
Projects on Kickstarter tend to be high-quality and novel—often creative or innovative enough to catch the attention of early adopters and headlines from the press. Backers typically view “all-or-nothing” projects as more trustworthy, since they only part with their money if the campaign succeeds.
Fees: Platform fee of 5% if you meet your goal, plus payment transaction fees between 3% and 5% (US).
2. Indiegogo
Founded in 2008, Indiegogo has helped to fund over 800,000 ideas since its inception.
Indiegogo is a robust crowdfunding platform that supports businesses, artists, and nonprofits.
The most noteworthy difference between Indiegogo and Kickstarter is the option to choose a fixed funding goal (all or nothing, like Kickstarter), or a flexible funding goal for your campaign. With flexible funding goals, you receive your funds regardless of whether you've met your goal by its deadline.
The flexible funding option is most useful for nonprofit organizations who are also receiving other funding for the program, and will be able to deliver the program even if the crowdfunding goal is not met.
Another bonus of the platform is Indiegogo InDemand, which lets you continue raising money even after your fundraising campaign ends.
Fees: 5% platform fee if you meet your goal (not including payment processing fees).
3. Patreon
Unlike other platforms that collect one-off campaign donations, Patreon has a subscription model. Whereas many of the top crowdfunding sites support limited-run campaigns, Patreon was made for creators and internet personalities with loyal audiences to generate recurring revenue through paid memberships. You can choose to let patrons pay per month for special community perks, or per creation to incentivize you to create more.
Patreon creators offer all kinds of exclusive perks based on different payment tiers, such as exclusive content, branded swag, sneak peeks, shoutouts, and more.
Here, you can build a community of dedicated supporters and serve exclusive content (through Patreon's various integrations) that unlocks based on the patron's membership tier.
Fees: Between 5% and 12% of your monthly income, depending on your Patreon pricing plan.
4. Crowdfunder
While other crowdfunding sites require you to set up a page on their platform, Crowdfunder enables you to transform a product page on your website into a crowdfunding page, complete with a progress bar, setting your goal based on a threshold of items ordered or money raised.
Crowdfunder enables crowdfunding in its simplest form: accepting pre-orders from people as a way to simultaneously validate an idea and fund production. Plus, you can avoid the commissions charged by third-party platforms in favor of a more predictable monthly fee.
5. GoFundMe
GoFundMe is a free crowdfunding platform built primarily to raise financial support for individuals, charitable causes, and community projects. Backers on the platform tend to only support campaigns that come from within their own personal networks and communities, or causes they're familiar with.
It is not an all or nothing site, meaning users will be able to keep the funds raised regardless of how close they are to their goal. GoFundMe isn't designed for commercial crowdfunding campaigns. However, if you're a small business owner who has fallen on hard times, or you need to raise money to overcome a personal challenge, leveraging GoFundMe for support from your personal network can be effective.
Fees: No platform fee for personal and charity campaigns started in US dollars. 2.9% transaction for debit and credit card charges, plus $0.30 per donation.
6. Fundable
Fundable is part of the Startups.co platform and is among the top crowdfunding sites that allow startups (registered in the US only, for now) to offer rewards or equity in exchange for funding.
According to its site, startups that offer rewards typically raise less overall (under $50,000) but get more backers, whereas startups that use equity crowdfunding usually raise more capital from fewer investors.
Fees: $179 per month during active campaigns instead of a percentage of total funds raised (not including payment processing fees).
7. Mightycause
Mightycause is an online fundraising platform that has been around since the beginning of crowdfunding. It is thought of as the best crowdfunding platform for nonprofits. Campaigners have raised over $600 million on Mightycause since 2006.
Mightycause has an easy-to-use platform that empowers ordinary people to achieve their fundraising goals. You can create a fundraising page quickly and collect donations from friends, families, communities, and people in your social media network in no time.
The platform doesn't require you to meet any goals. So if your fundraiser doesn't meet its financial goal, you still get to keep the donations you receive. Policies are flexible, there is no platform fee, and you don't need to wait for any approvals before launching your campaign.
Fees: $59/month, not including payment processing fees.
8. SeedInvest
SeedInvest is an equity crowdfunding platform where backers are investors rather than supporters. This means that investors receive ownership in your company after they buy in. SeedInvest was the first crowdfunding platform to allow regular people who don’t qualify as accredited investors to invest in companies on their sites.
Since its inception in 2012, SeedInvest has helped over 235 companies raise capital and has built a growing network of over 500,000 investors. Tech and e-commerce businesses make up most of the platform’s successful campaigns.
If you want to raise money on SeedInvest, you’ll need to sign up for an account. This involves filling out an application and completing a screening process so the platform can do its due diligence. If you are accepted, you can create a profile and begin fundraising on SeedInvest.
Fees: Includes a 7.5% placement fee and 5% convertible note or equity fee, based on how much you raise on the platform.
When deciding on what crowdfunding platform to use, there are many different factors to consider like the fees you’ll pay, how easy it is to set up, and the flexibility you have within the platform. We hope this guide is helpful as you move forward.
For more help with building the most effective fundraising strategy, check out the blog posts below:
- Is Your Nonprofit Making These Common Crowdfunding Mistakes?: Crowdfunding is fast becoming one of the most popular (and useful) fundraising strategies for all kinds of nonprofits. We created this handy guide to help you avoid some of the common crowdfunding mistakes that nonprofits make when deploying a campaign.
- 5 Ways to Boost Your Wording When Asking for Donations: One of the most critical factors in fundraising is the wording you use to ask for donations. How you ask is just as important as who you ask to support your organization. This blog post lists five easy ways to boost your wording when asking for donations.
- How to Plan a Fundraising Event: The Complete Guide: Fundraising events are key parts of a successful fundraising strategy, but planning an event can be an overwhelming process. In this blog post, we have all the information, resources, and tools you need to plan a successful event for your nonprofit.
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