Crowdfunding websites are popular with nonprofits, however getting the facts about how it works and how much it will cost is not always easy. It’s not always easy to tell which crowdfunding sites have a real community behind them and real success in helping nonprofits with their fundraising goals.
It’s important to note there are two types of crowdfunding: donation-based and investment funding. Nonprofits fall into the donation based category which involves having a large group of people donate to your idea, charity or nonprofit. Investment funding involves selling company equity or products in exchange for the capital needed to further for profit, business goals.
In 2013, Forbes introduced a list of crowdfunding projects with the best track records and biggest communities around the world but a lot has changed in two years. When Forbes created that list, Teespring and Move Your Mountain didn’t exist and Kiva was not yet the force it is today.
NonprofitFundraising.com compiled the below list of the top 5 crowdfunding websites for nonprofits based on features, costs and ease of use.You will notice the very biggest crowdfunding sites Forbes seleceted also make our top 5 crowdfunding websites, however, they move to the bottom of the list when evaluated based on what they have to offer a nonprofit. Kiva is not on the list as the money they raise is a loan and not a donation.
San Diego-based GoFundMe was launched on May 10, 2010 and has quickly become the World’s #1 fundraising site for personal causes and life-events. Hundreds of thousands of people have raised over $900M from 10M donors for the things that matter to them most. It became popular as one of the first to pay out all funds even if the fundraising goal was not met and to allow anyone to register and start a fundraising campaign. It remains one of the top choices for nonprofits.
Teespring comes in at #1 and knocks Indiegogo completely off the list. Indiegogo remains the biggest crowdfunding website and a great choice for the film industry, sart-ups and those seeking venture capital, however, nonprofits should look at companies like Teespring and others on this list when they consider launching a new fundraising campaign. Teespring is easy to set up and promote and the fees are less than others. Nonprofits are doing well with Teespring.
2) Move Your Mountain
Move Your Mountain is located in Reno, Nevada and focused on “making fundraising easy”. Their tem of developers, programmers, graphic designers and personal coaches has helped nonprofits and individuals raise raise thousands of dollars in their first year alone. They offer a personal approach that includes a personal coach and social media help. Of all the crowdfunding websites we reviewed they offered the lowest fees.
YouCaring.com Founders say it was formed to create a global community of people dedicated to supporting and encouraging the people. They say the goal is to help fundraisers achieve an outpouring of love and support and achieve their goal. YouCaring is a great choice for nonprofits as they already have a big community of people you can connect with when you launch your campaign.
Crowdrise gives the opportunity to raise money for alternative causes, such as animal welfare, arts and culture, civil rights, disease and disorder, education, the environment and poverty. The CrowdRise community was named as a “Top 25 Best Global Philanthropist” by Barron’s. The creators of the platform used to keep it a secret but over time decided to encourage people to tell others. Crowdrise is a unique blend of crowdfunding and social networking. Crowdrise is a good social networking site for nonprofits.
Kick Starter aims to fund creative projects from films and games to art and technology. Since its launch in 2009, 5.7 million people have pledged $1 billion, funding 57,000 creative projects. Every project has its own funding goal and deadline, following the principle of “all-or-nothing”. Either the project reaches the funding goal, or it doesn’t receive any money at all. This principle boosts the support by creating momentum. To date, 44% of projects have reached their funding goals.
The Right Crowdfunding Site for Your Nonprofit
Before selecting the crowdfunding website for your nonprofit it’s important to compare processing fees, transaction fees, tips, gifting of transaction fees, and even operating costs. Here’s a break down of the three basic fees all crowdfunding sites will charge you or your nonprofit.
Site Fee–This is the fee that the crowdfunding site collects to cover it’s operating costs. This is a fee is what stays with the crowdfunding website to cover writers, designers and others that keep the site operating.
Processing Fee (Transaction fee)–This is a fee charged by the payment processing site that the fundraising website is using. Many times this will be WePay, PayPal, or Swipe. These charges are what you pay to be able to use your credit card. (all merchants that accept credit cards pay a processing fee for each transaction.
Per Donation Fee–This is usually associated with the processing fee. WePay, for instance, charges 2.9% processing fee PLUS 30¢ per donation made. That means, if you donated $100 to a campaign, WePay would get $2.90 + 30¢ for a total of $3.20.
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Comparing Crowdfunding Fees