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Review of Online Fundraising Websites

2012 October 25
by HandsOn Suburban Chicago

HandsOn Suburban Chicago exists to mobilize, inspire, and equip people to volunteer and take action to build vibrant and prosperous communities. We help provide nonprofits with tens of thousands of dollars worth of donated volunteer time and skill.

To learn more about how to volunteer and take action, search our database of opportunities.

Not everyone has time to volunteer.
As nonprofits experience loss of traditional and government funding, many are turning to crowdfunding. These sites offer various features that can help the nonprofit world communicate their messages to potential donors.

There are dozens of websites to choose from that allow you to start a project. We have done our own online fundraising campaign, and explored several of these websites. We noticed right away that each website has various strengths and weaknesses in terms of their functionality and cost.

Kickstarter KickStarter

Kickstarter is a very general campaign funder, not geared specifically toward nonprofits. Successful campaigns have ranged from private funds for artists, musicians, designers, and writers to musical performers and video game developers. Nevertheless, there are some advantages for nonprofits. Check out their most popular projects. 

Advantages

  • Lots of reviews agree that Kickstarter has the cleanest and most user-friendly website for fundraising
  • Users say that funders on Kickstarter are more active
  • Kickstarter allows fund creators to set rewards for varying donor levels. You can get really creative in the incentives you want to offer donors if they give a certain amount.
  • Although Kickstarter sets a deadline after your campaign begins (you only get 90 days for the whole thing) and you have to hit your goal (all-or-nothing), some users have said this was very helpful. Some said that it forces others who really want to see you succeed promote your project as if it were their own.

Disadvantages

  • If you don’t reach your goal, Kickstarter returns all the funds to the original donors. This rule allows artists to test their concepts without much risk.
  • Limited time on your project (90 days max). Again, this could be a positive or negative depending on how you look at it.
  • You can’t edit the details of your project once you launch your page

Fee

Kickstarter takes 5% of the amount you raise for your project.

 

Razoo Razoo Logo

Razoo allows users to create fundraising pages for any legally registered nonprofit.

Advantages

  • Appealing, user-friendly interface and a large community of donors
  • Donation-matching for corporations or foundations looking for a way to raise money
  • Creators don’t have to set a deadline on their projects
  • Razoo is one of the cheapest fundraising websites available

Disadvantages

  • Razoo has a huge database of recognized nonprofits, but you may have to use another site if you aren’t in it. Razoo doesn’t allow any random person to start a fundraising project. This may be to discourage scams, so this may not be a negative

Fee
Razoo charges a flat fee of 2.9% of the amount you raise for your project. Check out their success stories.

*Update: Razoo has changed their fee from 2.9% to 4. 9%

 

IndieGoGo IndieGoGo

IndieGoGo brands itself as a collaborative way to fund ideas. It offers any idea (creative, cause or enterprise) the necessary tools and processes to raise money, and tends to have great return.

Advantages

  • Anyone can create a project, and unlike Kickstarter, you keep whatever money gets donated
  • There is no deadline on the project
  • They claim to have an exclusive community of partners, including MTV new media
  • They offer analytics, so you can see which fans, influencers and organizations are driving dollars to your project. Lots of nonprofits might be interested in knowing this information for future fundraising campaigns.
  • The terms are good for small businesses; they offer assistance for funders to make their projects more effective.

Disadvantages

  • Less structured, more clutter
  • Projects are very broad, but tend to be “indie” themed, not necessarily “charity” themed
  • Higher fee if you don’t reach your goal

Fee
IndieGoGo charges a 4% fee for projects that hit their fundraising goal, and 9% for projects that don’t hit their goal. The reason given seems to be that they try to discourage ridiculous projects that would stay on their site forever. Check out their success stories.

Crowdrise Crowdrise

Crowdrise was founded by actor and philanthropist Edward Norton earlier with a goal of harnessing social networking to make giving go viral. You can link your fundraising project to your other social networking sites. When I first read this I thought, “Big deal. I can just use a URL shortener to tweet my project and post it on Facebook in order to drive people to my fundraising page.” After playing around on the website a bit, however, I agree that Crowdrise makes it as easy as possible to spread the word about your project to your social network. Of course, other crowdfunders also help with social media sharing as well.

Advantages

  • Crowdrise offers incentives for donors to stick around, thus growing the potential community of donors
  • They offer promotions and sweepstakes that you can add to your project to incentivize people to donate
  • You can win some cool prizes and titles from the website to show off by earning points (you earn points by donating and having people vote for you)
  • Crowdrise really is a social media site in itself, where you create your own profile, add friends, message people and comment on other friends’ pages
  • They have an active community of donors, including numerous celebrities
  • Some users noted crowdrise’s great sense of humor!

Disadvantages

  • Although there is no cost to start a project, Crowdrise is a little more expensive than other fundraising websites. Projects tend to be slightly smaller in size.

Fee
Crowdrise takes 5% of all donations, plus a $1 transaction fee for donations under $25 and a $2.50 transaction fee for donations $25 and over, which works out to around ~7.5%-9% depending on how much a person gives. Check out their success stories

GoFundMeGoFundMe

GoFundMe allows users to create fundraising campaigns for any project, so you don’t have to be a nonprofit to start a page. They tend to focus on helping people after accidents and disasters.

Advantages of GoFundMe:

  • Users can track donations and measure how many visits they receive
  • Project pages are very social, and allow users to add updates on their campaigns and comments
  • Offers donation options that include both online or offline payments
  • Focus on charitable causes

Disadvantages of GoFundMe:

  • The website doesn’t seem to have an active community similar to sites like Crowdrise, so most of your fundraising is probably going to come from only people you know or friends of friends

Fee

GoFundMe deducts 5% from every donation, along with the 2.9% for using PayPal.

 

GiveForward 

GiveForward raises money specifically for medical or natural disaster causes. They bill themselves as a way for people to help their neighbors. For nonprofits involved with emergency preparedness or first responders, this is a great resource.

Advantages:

  • Simple interface, easy to create a page.
  • Personal and responsive support staff
  • Lots of successful funders, raising upwards of $100,000
  • Donors can include personalized notes, while maintaining a secure transaction
  • Donations over $500 are eligible for a matching-funds program

Disadvantages

  • Limit of 4 months for a fundraiser – they argue that successful fundraisers last between 4-6 weeks
  • National donators only
  • Because GiveForward is for-profit, donations are not tax-deductible

Fee

  • 7% transaction fee, covering credit fees (2.5%), paypal fees, and overhead.

GiveForward is a great crowdfunder for natural and health related disasters. It is not a nonprofit, so they have slightly higher processing fees. They argue that being for-profit allows them to maximize efficiency rather than waste time and resources on fundraising for themselves. Each fundraiser gets 4 months.

Other sites:

DonorShare

GoGetFunding

Which ones did we forget?  Which ones have you had success with?  Share with us in the comments section!Related stories

*This is an updated version of an immensely popular November 2010 post; I have taken some time to update it and include reader feedback. Thanks for your comments!

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