Crowdfunding sites allow you to set up a page to appeal for money for a project and to collect donations online. The idea is that lots of people all contribute a small amount, so it’s funded by a crowd of people rather than a foundation or wealthy individual. There are many different sites and the main differences between them are:
- How much they take as a fee (often the site takes around 5% but also the payment processor – such as PayPal – take about another 3%)
- With some sites it’s all or nothing – if you don’t reach your target, the donations are not collected from your backers
- Some sites are particularly focused on arts projects (films etc.), others on social enterprises etc
- Some of the sites recommend that you offer rewards to donors, for example, you get a T-shirt if you donate more than £25. Some sites allow donors the option of not accepting the reward
- Some sites will require donors to sign up to the site, while others will allow people to make a donation without signing up.
Often the most successful crowdfunding appeals are those that result in something tangible at the end that people can benefit from, such as films and books. But most importantly you have to put together a long list of people and organisations who you can ask to support you and put an enormous amount of effort into getting the word out far and wide. Here are some of the more popular sites in the UK (also see this guide from CrowdfundUK):