ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

What is Crowdfunding? A Brief Guide to a Growing Industry

Updated on May 5, 2017

Social Networking?

True story: I struggled with categorizing this Hub. It was a toss up between "Business and Employment" or "Technology". Technology, and subsequently Social Networking, won. Crowdfunding is not social networking in the strictest sense; however, it incorporates elements of social media as project creators often turn to networks like Facebook and Twitter to promote their cause.

What Is Crowdfunding?

The most basic definition of crowdfunding can be divined from the two words which comprise it: crowd and funding. OK, a crowd is funding something. What crowd? What are they funding? Think of the crowd as your network. This network can include online and offline friends, but the funding will always occur online. What this network funds is entirely up to you (and them, of course); however, most crowdfunding sites have guidelines about what type of projects can and cannot be funded.

Types of Projects Funded by Site

Projects Funded
Creative (Art, Food, Tech, etc)
Anything (many-to-many model)

How to Crowdfund

If you have an idea you'd like to implement, or are in need of a little extra help for a bill or medical expense, you can turn to a site like Kickstarter (creative projects only) or GoFundMe. To start your campaign:

  1. Articulate Your Goal: Clearly outline what you are attempting to raise money for and determine how long you would like to accept contributions.
  2. Find Your Site: Determine which site (Kickstarter, Indiegogo, etc.) is most appropriate for your needs. All crowdfunding sites should have a rules or FAQ section. Check to make sure your project falls within the site's guidelines before signing up.
  3. Sign Up!: Most sites require you to first create an account before proceeding to your campaign. Crowdtilt has new users input their project's details before requiring biographical information.
  4. Vet/Review: Your campaign should be compelling, but it must also be free of spelling, usage, and punctuation errors. Remember that you will be sharing this with friends and family who may in turn (hopefully) share it with their friends and connections. You can always edit your campaign if you notice an error, but remember that first impressions are lasting.
  5. Promote: Now's the time to tap into those 1,000 Facebook friends. Post your story and a link to your campaign across appropriate social networks like Twitter, Facebook, Cafemom, etc. Think twice before posting to LinkedIn (just DON'T).



Billing itself as a "group-funding" site, Crowdtilt claims it's the "largest funding platform for group experiences, purchases, and causes". Like Indiegogo and Gofundme, users can fund just about anything; however, the difference lies in its group benefit orientation.


  • Campaigns can run for a max of 30 days. Campaigns can be re-run after expiring.
  • "Fundees" pay 2.5% if they are successfully funded; Funders pay a 2.5% processing fee.
  • Facebook is the only allowable platform upon which admins can login. That is, a Facebook account is required to use the site.
  • Funds are sent to admins via direct deposit. The fundee must meet or exceed his or her funding goal to receive the money.

How to Raise Money with GoFundMe


To date, GoFundMe's users have raised $110 million toward their causes. Causes range from creative pursuits to funerals.


  • Funding options include a "Personal Donation Campaign", charity donations, and "All-or-Nothing" campaigns. Personal donations can be for medical expenses, travel, etc.
  • There is no expiration date. Users can choose to limit their campaigns by choosing the "All-or-Nothing" funding option.
  • Donors are not charged, but GoFundMe deducts 5% from each donation received.
  • Payments can be received via direct deposit or check.



Indiegogo can be used by anyone - for anything - with a valid bank or PayPal account.


  • Fundees can choose to fund their projects via fixed or flexible funding.
  • 60 days is the maximum length a campaign can run. 47 days is the average amount of time it takes to successfully fund a project.
  • If your goal is reached, Indiegogo charges 4%. If your goal is not reached, the site charges 9%. For a more detailed look at the fee structure, see Indiegogo's Fee & Pricing Schedule.
  • Payments are disbursed via PayPal, direct deposit, or FirstGiving, Indiegogo's nonprofit payments processor.



In my humble opinion, Kickstarter is leaps and bounds above the aforementioned sites in terms of aesthetics and usability. It's not for everyone, though.


  • Projects are limited to creative pursuits like photography, films and videos, food, and music.
  • Like Indiegogo, the maximum fundraising length is 60 days. Kickstarter recommends 30 days or fewer.
  • Kickstarter charges a 5% fee, but only if a project is successfully funded.
  • Payments are processed via Amazon payments.

Crowdfunding and You

Have you ever financed a project using crowdfunding?

See results

Crowdfunding for a Good Cause

While most donations are not tax-exempt, some may be considered gifts. Donations to nonprofit organizations, such as via GoFundMe, may be eligible to claim as tax deductions.

Two sites that utilize the crowdfunding model for a good cause are and Kiva contributors provide loans to people around the world - rather than donations - for various reasons (entrepreneurial ventures, green projects, etc.). Loan recipients are expected to repay their loans at some mutually agreed upon interval; however, Kiva does not guarantee that a loan will be repaid. Loans are not tax-deductible since there is a chance they will be repaid. If you are interested in making a tax-deductible contribution to Kiva, consider donating to Kiva's operational expenses.

Contributions to Samahope, on the other hand, are tax-deductible. Funding options include fistula repair, burn repair, and cleft palate surgery. Samahope is a part of Samasource, a San Francisco-based nonprofit providing crowdsourced data services benefiting companies and poor women and youth.


This website uses cookies

As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at:

Show Details
HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
LoginThis is necessary to sign in to the HubPages Service.
Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
AkismetThis is used to detect comment spam. (Privacy Policy)
HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
MavenThis supports the Maven widget and search functionality. (Privacy Policy)
Google AdSenseThis is an ad network. (Privacy Policy)
Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
Index ExchangeThis is an ad network. (Privacy Policy)
SovrnThis is an ad network. (Privacy Policy)
Facebook AdsThis is an ad network. (Privacy Policy)
Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
AppNexusThis is an ad network. (Privacy Policy)
OpenxThis is an ad network. (Privacy Policy)
Rubicon ProjectThis is an ad network. (Privacy Policy)
TripleLiftThis is an ad network. (Privacy Policy)
Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)
ClickscoThis is a data management platform studying reader behavior (Privacy Policy)