What is crowdfunding?

What is Crowdfunding? Every Question You Have — Answered!

Often confused with peer-to-peer fundraising, crowdfunding is when an organization or individual creates an online fundraising page and solicits donations for a particular reason. Anyone can start a crowdfunding campaign, and raise money for practically any cause, project, or expense.

If you’re interested in creating a crowdfunding campaign, you probably have a lot of questions. Luckily, we’ve created this article to cover some of crowdfunding topics to satisfy your curiosity.

In this article, we’ll cover 4 popular questions people ask about crowdfunding:

  1. What Is Crowdfunding?
  2. How Does Crowdfunding Work?
  3. How Do You Promote Your Campaign?
  4. What Are Some Quick Crowdfunding Tips?

Keep reading to get answers to these common questions and tips on how you can start your own crowdfunding campaign. Let’s get started!

1. What is Crowdfunding?

As we mentioned earlier, crowdfunding is a fundraising method that can be used by nonprofits and individuals alike. Because of its ease-of-use and versatility, it’s a popular (and effective!) way to fundraise online.

In fact, people have been using crowdfunding campaigns to raise money for:

Crowdfunding is so effective because campaigns reach their goals by receiving many small donations from a large group of supporters, rather than soliciting gifts from a few major contributors.

Crowdfunding uses social sharing and email to reach the masses and encourage potential donors to contribute. Campaign creators can not only reach to their networks, but through the encouragement of social sharing, also can reach new supporters. 

Supporters can make contributions via an online donation portal that securely processes credit card transactions as well as share the page with their networks.

Here is an example of a fundraising page on Fundly’s crowdfunding website:

What is crowdfunding? Example of a crowdfunding campaign

As you can see from the example, most crowdfunding campaigns have:

  • A crowdfunding description.
  • Images.
  • A fundraising thermometer that displays the campaign’s progress.
  • A timeline that marks the end of the campaign.
  • Social sharing buttons

As a final note, it is important to distinguish crowdfunding from peer-to-peer fundraising. Peer-to-peer fundraising is a type of crowdfunding where, in a combined effort, a number of supporters for a specific nonprofit set up their own fundraising pages and fundraise on the nonprofit’s behalf.

Key features of successful peer-to-peer campaigns include: easy-to-understand website and donation pages, impactful messaging, clear call-to-actions, the right software, and a strong group of participants.

You can probably tell that peer-to-peer fundraising and crowdfunding share much of the same DNA, but with crowdfunding, we’re talking about singular campaigns with singular organizers and with peer-to-peer there’s a main “hub” campaign with satellite fundraisers.

Regardless of if you choose to run a traditional crowdfunding campaign or a peer-to-peer crowdfunding campaign, your goal is going to be the same: raising money online in an effective and efficient manner.

2. How Does Crowdfunding Work?

  • 1. Start a campaign

    Whether you’re an individual that needs to raise money or part of a nonprofit’s fundraising team, the first step of crowdfunding is to start your campaign. Choose a platform, set up an account, and get started!

  • 2. Tell your story

    Your fundraiser is unlike any other; make sure that everyone knows that! Tell your unique fundraising story and make sure to include the reasons you’re raising money and how you plan to spend (or donate) it.

  • 3. Share your fundraiser

    The most important component of any crowdfunding campaign is the sharing aspect. No one can donate to your campaign unless you tell them about it! Get the word out via social media, email, and even word of mouth.

  • 4. Give updates and acknowledgements

    Your supporters, friends, and family members will want to know how your fundraiser is coming along! Make sure you post regular updates and promptly thank the people who have helped you raise money.

3. How Do You Promote Your Campaign?

Since crowdfunding relies on social sharing, its crucial to your campaign’s success to ask for donations on social media. Asking for donations via social media lets you inform both your existing networks as well as new potential donors.

When positing on social media, you should include the following elements:

  • Compelling visuals. Images and video help draw donors in. Getting your donors’ attention is important since you’ll be competing with every other post on their newsefeeds.
  • A short, concise description of your campaign. You don’t have to go into too much detail in your social media posts. Briefly explain your cause, and ask donors to make a contribution.
  • A link to your crowdfunding campaign. Don’t forget to link to your crowdfunding page. That way, donors can easily find your campaign and give.

While promoting your campaign on social media is important, it isn’t the only way to spread the work. You can also market your campaign through donation request emails and through traditional methods as well.

Just because you fundraiser is online doesn’t mean you can’t ask for donations via direct mail, phone calls, or in person.

Exhaust every method possible if you want to raise money for your cause. Who knows? You might even exceed your goal.

4. What Are Some Quick Crowdfunding Tips?

Upload amazing crowdfunding images to your page.

Upload amazing crowdfunding photos

Your photos are the first things your supporters will see when they visit your crowdfunding page. Make a good first impression! Take professional-looking photos, and make sure that they aren’t blurry or grainy.

Learn how to write a detailed description.

Write a detailed description

People aren’t going to give to a crowdfunding campaign if it isn’t immediately clear what their money will go toward. A detailed crowdfunding description can give your supporters more context for their donations and allows you to spell out your fundraising need.

Share your campaign regularly and at the right time.

Share regularly and at the right time

Experts say that the most successful crowdfunding campaigns raise the majority of their funding during the first and last 3 days of the campaign’s duration.

These “crunch times” are the best opportunities for sharing your crowdfunding campaign on social media and via email.

Throughout the rest of your campaign, make sure you share your campaign on a regular basis (we recommend every 5 to 7 days).

Create an update schedule to keep your donors informed.

Form an “update schedule”

Most crowdfunding campaigns last at least a few weeks (although we hope that you raise your goal sooner than that!). In order to keep people invested and interested in your fundraiser, you should post updates on your campaign page and social media.

Of course, you don’t want to overwhelm your supporters with updates. Instead, create an “update schedule” that you can stick to throughout the duration of your fundraiser.

We recommend that you post an update once every week. You should also write updates whenever you reach a milestone (i.e., half of your fundraising goal) or receive a particularly large donation.

offer perks to your donors to motivate them to give.

Offer perks to your donors

Not every fundraiser will be able to offer perks to their supporters, but if you are able to do so, incentives can be a great way to encourage people to give to your campaign.

You can sell t-shirts, mugs, stickers, phone cases, and more! Customize your merchandise so that people have something to remember your fundraiser by.

You can also set up giving tiers that correspond to your incentives. A bigger donation results in a better perk!


Need to learn more about crowdfunding? Check out these resources!

Additional Resources for your Fundraising Success

Get 7 tips for fundraising success to help you raise more money.

7 Tips for Fundraising Success

Every crowdfunding campaign can use a little help every now and then!

Whether you need advice about shooting and uploading crowdfunding photos, writing descriptions and updates, or sharing your fundraiser with your friends and family members, we’ve got your back.

Click below to learn more about the top seven crowdfunding tips that can be used for all types of fundraising efforts and campaigns!

10 Fundraising Examples

You’ve heard the stories about fundraisers surpassing their goal, but how often does that really happen?

The answer? More frequently than you might think! In fact, individuals and organizations often meet and exceed their goals when they use Fundly to set up a fundraiser and share it with their friends and family members.

Check out these ten crowdfunding campaigns that all exceeded their fundraising goals by sizable margins in just a matter of weeks!

Before your start fundraising, understand the basics with this ultimate crowdfunding guide.

Understand Crowdfunding

Crowdfunding has been used to raise money for everything from creative projects to medical costs and more!

Why is it so popular? Well, it might have something to do with the fact that a crowdfunding campaign is insanely easy to set up and share with your friends, family members, coworkers, and other peers.

See for yourself! Take a look at our Ultimate Guide to Crowdfunding and learn how you can make the most of this fundraising craze!

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