How does donation crowdfunding work?
If you are looking for a way to gather support and raise funds for a personal cause, community project, nonprofit, or social enterprise, donation crowdfunding may be a good fit. With this type of crowdfunding, your community provides financial support to your campaign without the expectation of any financial return or reward.
Community Funding
Non-Financial Benefits
Peer-to-Peer
Who can use donation crowdfunding?
Donation crowdfunding can be used by individuals for personal causes or by nonprofits and social enterprises to support programs and services.
Many personal cause campaigns are launched by individuals who have fallen on financial hardship and are looking to their community for support with medical costs, funeral expenses, or rebuilding after natural disasters. Campaigns launched by nonprofits are generally focused on expanding their donor base by collecting smaller donations from individuals rather than major donors. Donation crowdfunding may also be a good fit for civic projects and community-focused businesses with a social purpose.
Personal Cause
Nonprofits
Artists & Creatives
Social Purpose
What else should I know about donation crowdfunding?
As with all crowdfunding, organizations are primarily responsible for bringing potential supporters to the campaign.
Pre-campaign marketing preparation and outreach during the live campaign are critical to the success of donation campaigns. While most donation campaigns are launched by a single individual or organization who drives the outreach and marketing, campaigns may also use a peer-to-peer approach where members of a team create individual campaign pages with personal messaging for their networks to expand the network reach of a “parent” campaign. Upfront campaign costs (in terms of both time and money) are primarily related to marketing and outreach activities.
What are the fees to use a donation crowdfunding platform?
While donation platforms generally do not charge any fees up front, you can expect to pay platform fees of 5% of the funds raised plus a payment processing fee of around 3% for credit card transactions when a campaign closes.
Most donation platforms will provide tax-deductible receipts upon checkout for 501(c)(3) organizations.
Some platforms suggest that your supporters cover the platform fee in addition to their contribution to your campaign, which can lower your overall fees.
I’m ready! How do I get started?
The Crowdfunding Opportunity introductory course will help prepare you for the journey to reach your crowdfunding goals.
Want To Know If Your Project Is A Good Fit For Donation Crowdfunding?
Get your Crowdfunding Roadmap
Our Crowdfunding Roadmap is focused on helping you understand your crowdfunding potential and assisting you in developing a campaign strategy poised for success.
