Fundraising with Donation Crowdfunding

April 15th, 2020
4 minutes read

Donation-based crowdfunding has proved an efficient way for small charities to not only raise funds for charitable causes but also to broaden their network and create awareness about their organization.

This article will look into the definition of donation crowdfunding and explain how crowdfunding can be used to raise funds for a good cause either by non-profit organizations or individuals. Additionally, the article will look into some of the best donation-based crowdfunding sites that can be used for charity fundraising.

Definition: What Is Donation Crowdfunding?

Donation-based crowdfunding is when money is raised to support a good cause. As the name suggests, funding is raised through a crowd of people who decide to donate a certain amount of money to the cause, normally via online platforms specifically designed for the purpose.

In general, there are no requirements on how much money individuals have to donate. In other words, you can decide to donate as small or big amounts of money as you wish to a charitable cause that you like and find important.

As opposed to other types of crowdfunding, funders in donation-based crowdfunding do not gain any kind of ownership of or rights to the project they support.

Charity Crowdfunding vs. Donation Crowdfunding

Donation-based crowdfunding is sometimes referred to as charity crowdfunding, which does make a lot of sense since the purpose of donation-based crowdfunding is to support a charitable cause. 

Since donation crowdfunding is often confused with reward crowdfunding, the term ‘charity crowdfunding’ is often used to clarify that what is being funded is charitable non-profit projects aiming at supporting, for instance, relief efforts such as disaster relief for people who have been affected by natural catastrophes by providing food and shelter. 

Reward-based crowdfunding, on the other hand, focuses on helping entrepreneurs and small business owners kickstarting a new project and/or realizing an ingenious business idea. Individuals who decide to invest in such a project or idea will in most cases receive some kind of non-financial reward that can range widely from a thank you card to a product sample.

Fundraising for Charity with Donation-Based Crowdfunding

Crowdfunding through online fundraising platforms for charity purposes can truly help NGOs or other institutions raise not only money for but also awareness about a good cause.

On these online donation-based crowdfunding platforms, charities can create a fundraising project that interested individuals can choose to support by funding the project with as little or much money as they can or want.

In order for a charity crowdfunding campaign to be successful and reach its established goal, the campaign needs to clearly define what is being funded and why it is important to fund it. When having formulated the purpose of your fundraising project, this message ought to be spread to as many people as possible using primarily online marketing techniques.

Raising funds and creating awareness is interdependent in the way that it is not possible to raise funds without first creating awareness and making sure as many people as possible know about the campaign. And creating awareness should lead to more fundraising, if what you are raising funds for is well communicated, and your audience is engaged.

Most charitable organizations are in a very good position when it comes to crowdfunding since a lot of them already can count on an engaged audience to fund the project.

Creating Awareness with Charity Crowdfunding

As mentioned in the paragraph above, fundraising for charity through donation-based crowdfunding is not only about raising money but just as much about raising awareness.

Besides creating awareness about a specific charity project, good crowdfunding campaigns can also have the positive side effect of raising awareness about the charitable organization itself and, thus, enabling it to broaden its online network and, eventually, obtain more supporters who will participate in the crowdfunding projects.

5 Best Donation-Based Crowdfunding Platforms

Believe it or not, but Facebook has become an important platform for raising money for different charitable causes. And if you think about it, it is really not that strange; on Facebook, you can easily target a specific audience, and within the blink of an eye, your campaign might have been shared a hundred if not a thousand times. You can read more about how fundraising on Facebook works here.

How Much Does It Cost to Raise Funds on a Crowdfunding Site?

Donation-based crowdfunding campaigns do not cost much to run and most organizations, non-profit or not, will be able to afford it. 

Normally, the crowdfunding platforms take a fee between 5% and 10% of the total amount a campaign manages to raise. This money will be used to cover administration costs related to maintaining the platform. At the time of writing, Facebook does not charge any fees for donations made to charitable organizations, whereas the fees for personal fundraisers depends on where the creator of the fundraising campaign is based.