Sahyogi Help

What is Crowd Funding?

What Is Crowdfunding? The Clear and Simple Answer

Crowdfunding harnesses the power of social networks and the internet to give people the means to raise funds, help others overcome hardship, and meet aspirational goals. With crowdfunding, you can help a friend or help an entire community. You can do everything from pay for your own surgery to fulfill a student’s dream of attending college—and so much more.

If you’ve ever found yourself wondering, “What is crowdfunding,” or, “What are the benefits of crowdfunding?” then keep reading. We’ll answer your questions about crowdfunding and give you tips on how to bring in donations.

Stat Crowdfunding

The rise of crowdfunding

In recent years, crowdfunding has transformed the traditional fundraising landscape, breaking down barriers between those in need and those available to help them. Crowdfunding has made it possible for people to offer direct support to those who need emergency financial assistance, contributing to the larger trend of individual giving. In 2017, charitable giving by individuals grew by 4% for a total of $390.05 billion, outpacing giving by both corporations and foundations.

People often turn to crowdfunding when they can’t afford the rapidly increasing cost of medical care, or when they lack insurance to cover major medical procedures. Some sobering facts about medical costs:

40% of Americans can’t afford to spend $400 when faced with an emergency.
The retail cost for 267 brand name prescription drugs widely used by older adults has risen by an average of 8.4%.
Annual out-of-pocket medical expenses in the US have risen to $486 billion, or an average of $1,400 per person.
66% of people surveyed said that planning for out-of-pocket costs is both the biggest challenge and most stressful part of healthcare management.

What are the advantages of crowdfunding?

When funding from the government and nonprofits falls short, crowdfunding can be a lifeline. Online fundraising removes the traditional barriers that typically exist when asking for support, making it simple to overcome financial obstacles quickly or raise money for a worthy cause. Here are some of the main advantages of crowdfunding:

There is no application process.
There are no long wait periods to receive your funds.
Free crowdfunding sites don’t charge a sign-up fee and don’t charge a platform fee, allowing you to keep more of what you raise.
Crowdfunding takes the fear out of asking for financial help. It’s simple to share your fundraiser with your network of friends and family members on social media.
Crowdfunding makes it easy to reach people outside of your network.

Four of the most common questions about crowdfunding

1. How do i know if crowdfunding is right for me?

There is no cause too big or too small for crowdfunding. Some people might worry that their fundraiser isn’t as worthy as others—but the beauty of crowdfunding is that it exists to help an array of people and needs. Whether you want to help your pet, raise money to pay for a memorial, or get help with bills, crowdfunding can allow you to overcome the financial barriers that may stand in the way.

2. What are the different types of crowdfunding?

Donation-based crowdfunding: This type of crowdfunding is one of the most common. In donation-based crowdfunding, people support a cause by donating to it without receiving anything in return. The person running the fundraiser isn’t obligated to pay back donors or give them anything else in return for their contributions. SahyogiHelp is one of the major crowdfunding sites that uses donation-based crowdfunding.

Equity-based crowdfunding: In equity-based fundraising, the fundraiser organizer accepts money from investors, typically to help launch a business. In return, investors will receive a small piece of equity in the business or company.

Rewards-based: Through rewards-based crowdfunding, the organizer of the fundraiser offers a reward to donors, usually a service or physical item, in exchange for a contribution.

3. Is it okay to rais money for myself?

Absolutely. Thousands of people start online fundraisers every day to raise money for themselves. It’s understandable that you might be nervous about asking for money. But it’s important to remember that nearly everyone has experienced financial hardship at one point or another. You might be surprised by the number of people who want to support you when you need it most.

4. What is the best way to get more donations?

While there’s no magic formula for receiving donations, there are definitely steps you can take to set yourself up for success. The most important thing you can do is create a compelling fundraiser and build a community that empathizes with your cause. This will inspire your network of friends and family to take action. For specific tips on how you can create an engaging fundraiser and share it far and wide, read on.

How is crowdfunding on SahyogiHelp different?

SahyogiHelp is the #1 and most trusted leader in free online fundraising. We empower people to rally support for personal and charitable causes. We built our reputation by serving and supporting our community of organizers and donors, and we continue to build on that trust every day. SahyogiHelp’s giving community is more than 50 million strong and has raised more than $5 billion.