Digital technologies have opened up new ways of helping others, giving money towards new ventures and products, and spreading awareness of causes. Social media makes it easier to spread the word about the work of charities and publicise calls for donations and funding. Crowdfunding websites such as Kickstarter and GoFundMe provide a framework for individuals and businesses to raise money for specific purposes.
Crowdfunding is a way of asking for voluntary financial contribution over the internet for a specific goal or purpose. It is a form of crowdsourcing: putting out a call for others to voluntarily participate in an activity. The concept of crowdfunding has been going long before the internet – for example through benefit events or fundraising activities – but digital technologies have opened up the playing field. People around the world can contribute money towards something if they’re interested in the product or goal at the end, using an online intermediary. These online crowdfunding platforms mean that ordinary people, without technical knowledge or money, can ask for funds, and, similarly, anyone who can pay for something online can support a project or donate money to someone.
The rise in crowdfunding has seen different platforms aimed at different kinds of money raising. Kickstarter is a platform that has become synonymous with crowdsourcing funding for creative projects and business ideas, though other platforms like Indiegogo are trying to compete by emphasising innovation and getting something before everyone else can get it. On these platforms, the money is usually given in return for specific ‘rewards’, whether these be a named credit, a finished product, or an exclusive experience. Crowdfunded projects like this can vary from small artistic projects to large scale ventures seeking vast amounts of seed capital.
Another facet of crowdfunding is fundraising for specific people and causes. On sites like GoFundMe and YouCaring (which has now been acquired by GoFundMe), people can set up a fundraiser for themselves, someone else, or for a specific charitable cause they want to contribute towards. A major way these sites are used is to crowdfund for healthcare, particularly in countries where many procedures are not covered by health insurance or a health service:
A real focus on any crowdfunding platform is sharing, using social media communities like we looked at earlier this week. Sometimes, people target messages at celebrities to try and get them to help out, whether by sharing the campaign with their follower base or more directly pledging money (as grime star Stormzy did for a student in 2017). Digital technology allows these campaigns to reach not only the creator’s circle of family and friends online, but also a much wider audience.
Crowdfunding boasts a feel-good factor for those giving money, with the satisfaction of helping someone or getting something created that otherwise wouldn’t have been. With campaigns supporting personal healthcare and similar, there can be a direct connection to the person: you might be helping out a friend or relative. Giving is listed by the mental health charity Mind as one of “Five ways to wellbeing” and crowdfunding is a quick and easy way to help someone, whether you know them personally or not.
Supporting a fundraising campaign, whether one that offers rewards or is a charitable donation, can also build a sense of community, a connection with others with a similar interest or cause. This community participation increases social belonging and the feeling of being part of making something happen.
Kaye, A. (2017). “Crowdsourcing” in University of York: Becoming a Digital Citizen, FutureLearn.
Money Advice Service: Crowdfunding: what you need to know
Rodriguez-Ricardo, Y. et al, (2018). “What drives crowdfunding participation? The influence of personal and social traits”, Spanish Journal of Marketing - ESIC.
Steigenberger, N, (2017). “Why supporters contribute to reward-based crowdfunding”, International Journal of Entrepreneurial Behavior & Research, Vol. 23 Issue: 2, pp.336-353.
© University of York (author: Siobhan Dunlop)