Bing Pixel

4 Common Misconceptions About Crowdfunding

by Stacey Williams

Crowdfunding is a very popular and powerful way to raise funds. It is a $34.4 billion dollar industry that launches products, makes dreams come true and provides funding for people with life and medical emergencies.

With the holiday season rapidly approaching and people fundraising for different causes, it's a good time to dispel four common fundraising misconceptions.

1. It's Free

If you're using a fee-based platform such as GoFundMe, there are fundraising fees that range from 5% to 10% of funds raised plus processing fees per transaction. On free, donation-based platforms such as FreeFunder, you can give your backers a big “thank you” by avoiding platform fees. The payment processor still charges a small fee regardless of platform fees.

Promotional and video costs should also be factored in, if you plan to use external resources.

It is important to remember these fees and potential expenses when you set your funding goals. 

2. It's Easy

Crowdfunding is equal parts science and art. Sometimes you can follow best-practice tips and have success. But everything doesn't work for everybody. Success will likely require some effort.

To differentiate your campaign, you should have a plan. From social media promotion to getting press, know where to go and who to tell before, during and after you launch. A solid plan helps you keep the momentum going.

Work the plan. The extra effort can make a big difference.

3. The Crowd Is Waiting (Or Coming)

Crowdfunding usually starts with family and friends but rarely ends with them. Most people hear about campaigns via the press, social media or word of mouth. So unless you've had a highly-publicized event or emergency, or the platform features your campaign, you'll have to bring the crowd (aka your family and friends).

4. It's Quick

This one is tricky. Successful fundraising may take a day, month or longer. Some fundraisers actually reach their goals within hours. No two campaigns are the same. It is about reaching the funding goal, not how fast you get there. Set a goal. Make a plan and be patient. It is the quickest way to success.

Overall, crowdfunding is a great way to raise funds. To be successful make sure you don't get caught up in any of these myths.


Share!      

Ready To Fundraise?

Start Free Campaign

FreeFunder Works!

When Tara's dog Vishnu was diagnosed with stage 2 malignant oral melanoma and required major surgery to save his life, she created a FreeFunder fundraiser to help raise the money she needed. She broke down the specific costs for treatment, and let everyone know that the vet was very confident the procedure would be a success if the money was raised in time.

In only 24 hours, the goal of $8,500 was already met. In the end, Tara raised $9,575 to get Vishnu the medical procedure he needed.

"My heart is bursting and my mind blown... I can't tell you what it was like to see these wonderful, generous donations come in and to feel hope rise -- and then suddenly see the hyperspace lights flashing." - Tara R

See This Campaign

FreeFunder allows fundraisers to create free personal crowdfunding campaigns, with no platform fees!

Create Free Fundraiser