The emergence of crowd-funding on the internet has given people an easy way to raise funds for their project with $4.35bn expected to be raised on crowd-funding sites this year. But depending on the project or cause you are looking to raise funds for, each crowd-funding site has its own rules and strengths that are worth considering.
Here we run through some of the benefits and considerations when choosing Kickstarter, Indiegogo, or Donasity.
Kickstarter is the 16-tonne behemoth of the crowd-funding world, launching in 2009 with its innovative “all or nothing” funding model. This model protects backers, as their money will only be used if the projects gets enough support for its intended launch, and its size means there are thousands of potential backers ready and waiting to help you raise funds.
Kickstarter is also quite strict on the types of projects it allows on the site, with a focus on creative projects – from films and music albums to gadgets like 3D printers or virtual reality headsets. The interpretation of “creative” is pretty broad – but there is no way to add a project to raise money for John’s leg operation, Sam’s college tuition, or Lucy’s unspecified “new business”.
Launched in 2008, Indiegogo is the largest competitor to Kickstarter and offers a more flexible crowd-funding option, with no limit to just “creative works”. Indiegogo has a smaller, but still significant, audience, and offers the all or nothing funding model of Kickstarter as well as a flexible funding model where projects can keep all funds from backers even of the full goal is not reached.
The flexible funding option sounds great if you are creating a project, but in reality it causes the fund-raising to lose its urgency and can result in lower totals being raised and the feeling from backers that they are donating rather than backing.
Donasity takes a rather different approach to crowd-funding, offering easy website for fundraising online for charities and non-profits, rather than focusing on the commercial side of fundraising.
There are an estimated 1.5 million non-profits registered with the IRS in the US as of this year, and with guides online about how to start a non-profit organisation available online, more and more are being created each week.
In an already crowded space, Donasity manages to undercut the competition in the fees it takes from donations – a flat 4.95% – which is notably less than competitors such as GoFundMe, Causes, and Give Forward, making Donasity a strong contender for eligible organisation looking to raise funds online.