Crowdfunding Perspectives

Why do people donate on crowdfunding sites?

Perspective #1 – why donate to Crowdfunding?

There are more than 50 crowdfunding websites in the United States alone and they attract a lot of money from a lot of people. But why do people give on these sites and why do they support certain projects? Elizabeth Gerber, a professor at Northwestern University, has studied crowdfunding and says

There are four primary reasons why people give:

  1. Because of a reward system, people want acknowledgment.
  2. Because they have a connection to one of the people seeking donations.
  3. Because they want to be a part of something, be part of group.
  4. Because they want to support efforts analogous with their beliefs.

“We give a large part because of our identity and what we either vicariously either want to experience or what we already value currently. So if you had this fantasy of becoming a movie producer, but you haven’t quite made it there — you’re going to give potentially to that initiative because you can feel like you’re part of it without actually having effectively done the work of it, if you will,” says Gerber. “What’s interesting about crowdfunding is that when you give money, you’re not just giving money and the exchange is over, the relationship lasts. So the content creator will keep you engaged in a way that you wouldn’t otherwise.”

In some ways, crowdfunding sites have legitimized giving money to your friends in a way that most financial advisers never would.

“I think if we think about it as purely a financial transaction, it doesn’t always make sense. People will often earn less than minimum wage, for example, if they actually monetize the time they spend on a project. But if you think about it as more than just exchanging money, it’s actually about connecting with your social network and exploring new ideas in the public sphere,” says Gerber.

So what does the future hold for crowdfunding? Gerber says that in some circles, it’s reaching an over-saturation point. She says that crowdfunding may follow in the footsteps of charitable giving.

Perspective #2 – Money, money, money.

Crowdfunding, which is the practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the internet, according to Forbes, has a relatively short history in its modern rendition.

After the first recorded instance of crowdfunding by a British rock band in 1997, ArtistShare became the first explicit crowdfunding platform in 2000, according to Fundable. Soon followed many other platforms throughout the 2000s; GoFundMe, Kickstarter, and Fundable to name a few, culminating to President Barack Obama’s signing into law the JOBS act, or crowdfunding bill, in April 2012, lessening the regulatory burden on small business owners, and legalizing equity crowdfunding.

And despite its relatively short history, the crowdfunding industry is growing at rapid pace. According to, the crowdfunding market is forecast to grow at a compound annual growth rate of 26.87% during the 2016 to 2020 period.

Shaun Edlin, head of Deal Flow at Snowball Effect, an online investment marketplace, described three types of crowdfunding.

“There is rewards-based crowdfunding, where you get a reward in return for your funds. There’s equity-based crowdfunding, where you get shares in return for your funds. And there’s debt-based crowdfunding, where you’ll be repaid your funds over a period of time,” he said.

And for all its apparent success, some would say that mainstream crowdfunding has escaped the realm of business. Others would say there is indeed some silliness surrounding non-corporate use of some platforms.

In 2014,  Zach “Danger” Brown started a Kickstarter to raise money for a potato salad with a goal of $10. He raised about $55,000.

Computer science sophomore Andrew Hernandez said the most ridiculous GoFundMe he has seen was when people started to raise money to relieve Kanye West’s supposed debt.

Nursing sophomore Kaylyn Bryner said health-oriented crowdfunding, to help offset medical expenses, is the most appropriate use of the medium — things that pertain to preserving a person’s livelihood and needs as opposed wants.

Hernandez said besides buying drugs, just about anything goes for crowdfunding.

“I just think if you’re desperate or you really want something, sure, why don’t you ask people online,” he said. “You never know what you’re going to get online.”

He said he doesn’t like the idea of being restricted beyond the absolute, consensus-backed rules of society. Much in the sense that there is a free country, he believes in a free internet. If people are willing to fund it, so be it.

Hernandez said a sign of a successful crowdfunding effort is when the developer of the effort is engaged with the community. If the contributors of a Kickstarter are left in the dark, then it’s a sign there are some issues with the project.

Some would say a problem with crowdfunding is when projects go south, and contributors have nothing to show for their contributions.

“Living in a capitalist world, some money is going to be won, but at the same time some, money is going to be lost,” Hernandez said. “It’s kind of inevitable.”

If he donated to an effort that he truly believed in, he said he would not be perturbed if the effort didn’t manifest.

Music education junior Reagan Stephens said crowdfunding should be used for people that protect. His sister, a police officer, participated in crowdfunding for the Forth Worth police officer who was assaulted during duty. They raised a little more than $90,000. .

Colin O’Pry, biology and psychology senior, said he enjoys silly crowdfunding efforts with a good cause. Demetrios Hrysikos of South Carolina created a GoFundMe late in December 2016 to keep Betty White alive against the supposed bad odds of celebrities living through 2016. The proceeds of a little upward of $8,000 went to a nearby community theater, with the intention of creating more Betty Whites.

O’Pry said an appropriate use of a crowdfunding effort is when it’s going to a good cause. When it’s not going to directly the solicitor, but perhaps, going to them to help other people, as opposed to themselves, for personal gain. Although he’d prefer causes to be helpful, he does not scorn the idea of donating to something ridiculous. People can do what they want with their hard-earned money.

“I might not agree with it, but it doesn’t mean they’re right or wrong,” O’Pry said.

He said crowdfunding is like people going door-to-door selling cookie dough, just on larger scale because it can be shared with hundreds of thousands of people within seconds. The prospect of person living off of crowdfunding money is acceptable only if they are doing charity work that doesn’t pay and must rely on it to live and work. They must also put the money they do collect personally to good use, he said.

Perspective #3 – what encourages them to donate? 

  • an exciting or new venture that captures their imagination
  • something that wouldn’t normally get the money

or the opposite

  • one that’s worked before and tried somewhere new – it should work

That shows people have very different attitudes to campaigns – what does your crowd think? And also they want to

  • benefit in some way
  • see the social benefits
  • like the person behind the project – enthusiastic, confident, authentic
  • know the project fits with their values

And most importantly, a personal connection! 

Four things investors look for in a startup:

  1. The team behind the idea and their story
  2. A history of executing effectively
  3. That the founders have taken the idea as far as they can strategically and financially
  4. and then – the quality of the idea

What acts as a barrier to giving away their money?

  • unsure about the credibility of the person or group
  • have they done the market research to find an audience
  • nothing in it for them
  • how will they be accountable
  • do they have a plan
  • what’s the risk the project won’t happen

So ensure you have good rewards and  evidence your experience, credibility, your plan. Convince them that if you get the money the project will happen and that they will know about it.

Make a likeable video – involve your audience with your enthusiasm. And be thankful – you are asking individuals for money.

Would you give money to someone else’s crowdfunding project? If not … should you ask others to give to yours …Just a thought!

Unlike going for grants where you know there is a pot of money available there is no money out there waiting to fall into your lap. There isn’t a crowd waiting to donate to any project. There may be a few individuals who donate on a  regular basis but they are few are far between.

You have to find, connect and continually engage with your crowd. Starting with the people closest to you then working out to those who have an indirect connection with you, the project theme, the area or venue.

You can have the best idea in the world, but what good is it if no one ever sees it?

That’s the big question with crowdfunding campaigns. The good news is that it’s entirely possible to run a successful PR campaign for your project.

Here’s a list of proven PR tactics and strategies for your campaign!

  1. Hire a small agency that focuses on pre-seed startups. I recommend Kristen Tischauser of TalkTechCOMM. She is amazing, as is her partner Rebekah. Tell them I sent you :). The reason they are good is because they have relationships with journalists who are used to covering startups that do not have a product yet. That’s very important.
  2. Go viral. Forget the press release and instead make some viral videos and share them on your social media channels. This doesn’t always work, but when it does, it really works!
  3. Promote content on social media. Look at using your PR budget to advertise on Facebook and Instagram. Build campaigns around certain audiences with Facebook’s ad campaign builder. And don’t forget about Instagram either.
  4. Engage influencers. This is another great alternative to a PR agency. Use your PR budget to engage influencers on blogs and social media. Focus on the small to mid tier bloggers, social media influencers and Youtubers. You don’t want the big influencers because they are too expensive. It’s better to have a dozen mid-sized influencers than one big one.
  5. **SECRET TIP: Ask influencers for help before the campaign. No one ever does this and it boggles my mind. Reach out to influencers before your campaign and get them involved in the process of building the campaign. If you find a passionate person in your niche, ask them to give you ideas on how to market your campaign or what page copy might produce the most conversions. Some influencers are great people and will want to help you out.
  6. Do your homework. Research the best campaigns that have a similar product or audience as your idea. Study what they did, and their timing. Did they do any stretch goals? Did they send out any email blasts mid-way through?
  7. Schedule out your whole campaign. You should outline each action you want to take during your campaign. The reason is because it’s too crazy to figure it out while you’re campaign is happening. Schedule your tweets, email blasts, influencer outreach and facebook ad campaigns before you start.
  8. Use Email. When you launch your campaign, add your contributors to your mailchimp account so you can email them through the campaign.
  9. Use the power of referral. Turn your backers into salespeople by giving them an affiliate code. Indiegogo makes this easy with a built in affiliate tool.

These ideas are proven! Your odds of success are MUCH better with these ideas I listed than paying a medium or big agency 15k a month.

What is success?

In today’s era everyone wants success within the shortest time period. People get smarter if they are broke as fuck they start running a crowdfunding campaign. Tell people your idea with prototype get a lot of money from people and bam huge success. But some people fail, they don’t reach their money goal even if they have a brilliant visionary idea because they don’t reach massive audience.

On average people spend most of their time on emails instead of any tweet or any other post. Believe me you can make millions with the idea of light bulb if you have a great marketing strategy

Sell your story and leverage existing networks to find the people who you believe either share your struggle or can relate and sympathize with your cause.

First and foremost, try to raise 30% of the amount before you even begin. Talk to your closest friends and family about donating in advance so that when you begin people who would otherwise be on the fence feel compelled to give to your successful campaign.

Statistics & More Perspectives & Reviews of Crowdfunding campaigns

22% of American adults have contributed to a crowdsourced online fundraising project.

The vast majority of crowdfunding users have contributed to a handful of projects, with most making relatively small contributions.

Contributions to help an individual in need – often a friend or family member – are the most common type of crowdfunding donation.

Female crowdfunding donors are more likely to contribute to help someone in need; men tend to contribute to a wider variety of projects, especially those funding new products or inventions.

Crowdfunding donors value their personal connection to the projects they support and the ability to highlight causes that might not get much attention from established charities.

3% of American adults have created their own online fundraising project.


“I have to see a specialist in Florida from Maryland. There were expensive tests that I had to pay out of pocket, traveling expenses and 10 days hotel costs. Yes, I met my goal. Support was mostly from family & friends.”

“I’m a teacher and used GoFundMe to get updated technology (Chromebooks) for my classroom. I met the goal relatively quickly through donations by parents and other community members.”

“Found a stray puppy with a broken hip that needed surgery. The goal was to raise enough money to get the puppy the surgery. And yes thankfully raised enough money, I got the puppy the surgery and found her a wonderful home to live in!”

“To raise money to help my mother in law pay for a seeing-eye dog. We met the goal.”

“A good friend had just gotten engaged and was moving to live with his fiancée. He couldn’t afford to go on our annual guy’s boat trip so we all chipped in via GoFundMe to pay for his trip and make it his bachelor party.”

“I created a profile on GoFundMe today to help me pay for a trip around Europe this upcoming December. I don’t have enough to pay for all of my hostels and thought I could give this a try.”

“To help my family get a vehicle because ours died and we need one for my son who has autism and other medical problems. No we did not meet our goal.”

“My band raised money to record an album, with varying rewards for donors. We did meet our goal, and it was great!”

“My husband and I run a recording studio. We have done two Kickstarters to raise money for artists to record albums. First was [$5,000] and was not successful. The second was [$8,000] and was successful. It is dependent on how much effort the artist invests in the project as well as the size and activity of their social circles.”

“I’ve run several projects. Each was a short-run collection of memorabilia of interest to fans of H.P. Lovecraft. All three projects met their funding goals.”

“I did it twice; once to help a small restaurant get money for flood repairs, and once to help my daughter raise enough money to go to Disneyland with her school choir. We met the goal for my daughter, but not the goal for the restaurant.”

“I work in nonprofit development and marketing. It was for a few clients of mine and it took about 30 minutes to enter all of the content. The goals were between $1,000 – $10,000. Some were met and others were not for a variety of reasons.”

“It was to benefit feminist conference organized by a volunteer collective. We raised several thousand dollars. It was successful.”

“To fund a business startup idea based out of a college project. We were fully funded and ran the business for the semester.”


“I am a foster parent and was raising money for a larger vehicle to support our family. I did not meet the goal, but did get quite a bit of money. Around $3,000.”

“I raised $5,000 for the earthquake victims of Nepal. No, I did not reach my goal but was able to provide money to five different ministries including an orphanage.”

“The goal was to fund a summer intensive for my daughter. It was a good way to get exposure but for the most part it was family who contributed and we didn’t completely meet our goal. We came close enough though and did much better than when we held fundraisers locally where there was a lot of labor and expense going in with a less than stellar payoff. If I were to do it again, I think I’d want to not just ask for money but have the ability to give something back to the donors for helping us (some kind of reciprocity) … it may have created happier donors and made me feel like I did something tangible to say thank you.”

“I wanted help getting down to CA to be with my dog when she passed away but I had no means to get there myself. My goal was only $375 but I did not get a single donation. Therefore I did not reach my goal.”

“My grandfather passed away, I needed help with funeral. I didn’t earn a dime. This was a waste of my time and hope.”

“My sister died and we didn’t have enough money for a grave plot and headstone near my mom and grandparents at forest lawn but I didn’t get any contributors.”

“Needed money for a used car. Started a GoFundMe account. People made fun of me on GoFundMe. I had to wait months to save money like most people do. I did not get any money.”

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