Have you heard about crowdfunding yet? No? That’s pretty amazing, considering that crowdfunding has been mentioned Huffington Post, Mashable, and even the New York Times. It’s not really a new phenomenon, as it started long ago in terms of giving to charity. With every contribution you have ever made to a worthy cause, you’re participating in crowdfunding.
A fundamental difference between general crowdfunding and charity donations is first, crowdfunding contributions are not tax deductible, unless the project involves a charity. And second, you don’t have to be a non-profit organization to put a crowdfunding project up online.
Crowdfunding is nothing more than petitioning complete strangers to donate to a project that they want to see finished. There have been crowdfunding sites online since 2004, and only now is the process really catching on. This form of fund raising has successfully been applied to artists, musicians, inventors, and even businesspeople, and one project involved something as whimsical as rapping about potatoes.
Today, there are several different crowdfunding sites online. Some of them are named appropriately enough: Kickstarter, Indiegogo, Amazee, CreateaFund, and Helpalot. All of the sites have one or more people working toward a goal, and getting perfect strangers to give them the money to complete their projects in exchange for some type of perk.
A $1 crowdfunding donation will commonly get a minimal perk. For example, if the project has a website, you may be mentioned as a supporter there. More money might get you a film or album credit. And the higher the contribution, the bigger the perk
Several crowdfunding sites will only allow projects from people in the United States, but there are international crowdfunding sites, as well. Amazee is one, as an example. However, there is a universal thread. Most of the projects that are successful have a real value to some community.
That’s not to say that all projects have to be about the community at large. Projects that appeal to the musical community might be best put in a site where the audience for music-related projects are extremely successful, such as SellaBand. Or, aesthetic works are easily made part of the community just from aesthetic value alone. They improve the environment, and if people like the work of a particular artist, they’re much more likely to want to see the project completed so that they can a) take part in its success and b) find it available for purchase. In effect, the process of crowdfunding not only gains supporters, but customers, as well.
You can find more information about crowdfunding online at sites like Wikipedia, and some sites have very long lists of all the crowdfunding sites that exist online.
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