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- Primarily used for fundraising by charities and ‘good causes’
- Social reach can be turned into charitable donations
- Donors receive no financial or material return
- Usually operates a ‘Keep-it-all’ model
Donation-based Crowdfunding takes place when individuals donate small amounts to meet the larger funding aim of a specific ‘charitable project’. This has been a common practice for a long time, although it may not have always been called Crowdfunding. Often, this type of Crowdfunding is used to fund social causes, non-profit organisations, films and endeavours in the arts. Project creators come primarily from social and cultural groups, creative enterprises and community–based and charitable organisations…
Until the evolution of the internet, most of the organisations fundraising for charity or a good cause had to do so the old fashioned way; by organising specific events, direct advertising or in person solicitations. Until recently and in many cases, these were very successful methods but were also exceptionally inefficient and very time consuming.
In this digital age, and with the power of social media and other internet tools, this has all changed with the introduction of new Crowdfunding platforms. The innovative leap which is occurring now means that individuals or organisations no longer have to worry about wasted postage and futile meetings. The donors are now seeking you out, or it is at least much easier to get your message out at a fraction of the cost.
Donation-based Crowdfunding has been a common practice for a long time, although it may not have always been called Crowdfunding. Often, this type of Crowdfunding is used to fund social causes, non-profit organisations, films, and endeavours in the arts. Wikipedia, the Red Cross, political parties and other similar non-profit organisations all participate in donation-based Crowdfunding. Unlike the other Crowdfunding practices those making a donation do not receive financial or material return in exchange of their donation.
Many donation-based Crowdfunding platforms also use a ‘keep-it-all’ model, where the platform divests the funds collected regardless of whether the stated funding target has been reached.