Top 10 Crowdfunding Websites

Top 10 Crowdfunding Websites

 

If you have an idea for a new product, a start-up business or a compelling cause, you’ve probably thought about how to raise the funds you need, meaning you’ve probably thought about raising funds on the internet.

Crowdfunding has become an increasingly popular way for individuals and small businesses to raise money. As it grows in popularity, though, more and more fundraising websites become available. All crowdfunding platforms are not  created equal. Every crowdfunding platform is different, so you need to choose the one that is right for you. 

Which crowdfunding platform should you use to raise money for a charity, business, start-up, innovation or personal need? How to evaluate.

Consider the platform fees, credit-card processing fees, waiting periods to receive the funding and the types of campaigns associated with the website:

 

  • The platform fee is the percentage of the money you raise that the website charges you to raise that money. The average fee is 5%, though some platforms charge as much as 10%. However, there are a few platforms that don’t charge a fee at all.  
  • The credit-card processing fee is the charge that the bank puts on each credit-card transaction.
  • Certain platforms will only let you raise funds for specific types of projects. For example, some sites only allow creative projects, some only take small businesses or inventions and others won’t accept personal projects or memorials.

 

You want to look for a website with the lowest platform fees that best suit your unique fundraiser. That way, you can tell your potential contributors that 100% of the money you raise will go to your cause. Try to avoid the “all-or-nothing” approach, which requires you to meet your fundraising goal to receive funding, as opposed to receiving donations regardless if the goal is met.

You should also consider how much time you must wait to receive the funding you raise. Let's say you're raising money for a family whose house burned down. You would want that money immediately, not at the end of the campaign.

The following are some great websites for choosing the best platform for your campaign:

 

KickStarter

Who it’s good for:

Kickstarter only funds projects or inventions. At the end of your campaign, you need to have created something tangible.

Pros:

  • Offers a Creator Handbook on how to get started
  • Allows you to test projects in a global market
  • Doesn’t charge funders’ credit cards until the project meets its goal

Cons:

  • Limits campaign types (creative and performing arts only) 
  • Charges a 5% platform fee
  • Charges a 3.0% – 5.0% credit-card processing fee +$0.05 – $0.20 per donation
  • Implements an all-or-nothing approach (lose what you raised if goal is unmet)

 

UHelp

Who it’s good for:

UHelp is open to all campaign types and provides immediate access to all donations. They also offer a discount for nonprofit organizations.

Pros: 

  • Doesn’t charge a platform fee (keep everything you raise)
  • Charges a discounted credit-card processing fee for nonprofits 
  • Is a service of GrantWatch, a trusted and ell-known website.
  • Offers Daily Marketing Plan to help start your campaign
  • Provides free consultations with a fundraising specialist
  • Has solid customer support (phone, email and live chat)
  • Gives you immediate access to funds

Cons:

  • Is only one year old (product of GrantWatch)
  • Charges a 2.2% – 2.9% credit-card processing fee +$0.30 per donation

 

GoFundMe

Who it’s good for:

GoFundMe has no restrictions on its website. Anyone who wants to start a campaign is welcome.

Pros:

  • Offers 6 Steps to help you get started
  • Welcomes all campaign types
  • Is well known

Cons:

  • Does not accept donations under $5
  • Charges a 5% platform fee
  • Charges a 2.9% credit-card processing fee +$.30 per donation

 

Indiegogo

Who it’s good for:

Indiegogo only allows campaigns pertaining to creative, entrepreneurial or community projects.

Pros:

  • Provides a Crowdfunding Field Guide
  • Has partnerships with businesses like Amazon and Brookstone
  • Offers reward and equity crowdfunding

Cons:

  • Limits campaign types (creative, entrepreneurial and community projects only)
  • Charges a 5% platform fee
  • Charges a 3.0% credit-card processing fee +$0.30 per donation

 

FundRazr

Who it’s good for:

FundRazr has various tools, customizable options and support to help your fundraiser become successful. Anyone can start a campaign on FundRazr for any reason.

Pros:

  • Offers a choice between “keep-it-all” approach and “all-or-nothing” approach
  • Accepts a variety of currencies
  • Offers good customer support with campaign advice           

Cons:

  • Charge a 5% – 7% platform fee
  • Charges a 2.9% +$0.30 credit-card processing fee
  • Requires proof of your nonprofit status

 

Classy

Who it’s good for:

Classy offers a variety of features for nonprofits and individuals looking to raise money.

Pros:

  • Is optimized for mobile devices
  • Gives you the option to tailor a vanity URL
  • Has solid customer service (phone, email and live chat)                  

Cons:

  • Charges a 5% platform fee (basic package)
  • Charges $499.00 per month for a 2% platform fee (Classy Pro)

 

Fundable

Who it’s good for:

Fundable is a crowdfunding platform specifically for businesses.

Pros:

  • Connects you with backers looking to invest in business
  • Provides guides for startups, investors and crowdfunding   

Cons:

  • Is not well known
  • Charges $179 per month
  • Limits campaign types (businesses only)
  • Charges a 3.5% credit-card processing fee +$0.30 per donation

 

Patreon

Who it’s good for:

Patreon is designed for artists and creatives. This is a great platform for freelance artists as well as small-shop or Etsy-store owners.

Pros:

  • Supports freelance artists
  • Offers monthly donation option
  • Provides content analytics

Cons:

  • Is not well known
  • Limits campaign types (artistic and creative campaigns only)
  • Charges a 5% platform fee
  • Charges a 2% – 4% credit-card processing fee

 

Charidy

Who it’s good for:

Charidy is a crowdfunding site dedicated to nonprofit fundraising.

Pros:

  • Offers a wide range of campaigns (auctions, dinners, membership drives, etc.)
  • Allows personal campaigns for medical and disaster relief

Cons:

  • Limits campaigns to 24 hours
  • Requires three donors willing to match smaller donations
  • Charges a 2.9% platform fee
  • Charges a 2.9% credit-card processing fee +$0.30 per donation

 

DonorsChoose

Who it’s good for:

DonorsChoose is a website where public-school teachers can start a campaign for necessary materials and experiences for their students.

Pros:

  • Partners with individuals who may match donations
  • Has been supporting teachers and students since 2000
  • Offers gift cards for purchase (for use on DonorsChoose)

Cons:

  • Limits campaigns types (classroom projects only)
  • Forces you to spend the donations on pre-approved classroom items manufactured by specific vendors
  • Requires school verification

Allocates 15% of each donation to overhead, teacher outreach, maintenance and buildout of the DonorsChoose website

In summary, choose the platform with the lowest platform fee (because that eats into the money your raise), immediate access to your funds, and the most marketing support.  

About the Author: A research associate prepared this document as part of her marketing fellowship activities.

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