Crowdsourcing vs Fundraising

Today, you can often hear the words “crowdfunding/crowdsourcing” and “fundraising.” What is the difference between these terms? Let’s figure it out.

Crowdfunding is the collective cooperation of people who voluntarily unite mainly through web money or other resources to support the efforts of other people or organizations in any business or undertaking.

Crowdfunding is “younger brother” of crowdsourcing, which assumes that a large number of people solve a certain problem at once, who exchange ideas and opinions, prepare their solutions. However, crowdfunding implies financial assistance in solving the problem.

An example of crowdfunding: the director has an idea for the film but has no money to implement this idea. He presents his idea at various special sites on the network and invites everyone to help him raise money for the implementation of the idea. As a gift to those who make their contribution, the director may offer a reference in the credits of the film, a free movie disc, or even things from the set.

Crowdfunding actually appeared a long time ago: in fact, it relates to all created monuments, buildings, or even art objects for which funds were collected by the “the whole world” (for example, donations for the construction of temples, publishing books).

But everything became much easier when the Internet appeared and online fundraising appeared.

A well-known example of crowdfunding is the collection of money by the founder of Wikipedia, Jimbo Wales, on creating an online encyclopedia. Since this is one of the most popular resources all over the world, there is no need to use third-party sites to search for funds.

Although crowdfunding is actively used in various start-ups, fundraising is more common in the business environment. This is essentially the same thing. The difference is that fundraising is the collection of funds by any organization or company for the implementation of its project. Crowdfunding is more used in relation to individuals or creative teams.

The most popular crowdfunding sites are Kickstarter, GoFundMe, Indiegogo, Patreon, RocketHub, GoGetFunding, Ulule, CircleUp.

The conditions for collecting money are somewhat different on different Internet sites. But usually tight deadlines are set everywhere, for example, 60 days. If the necessary amount was not collected during this period, the money is returned back to all who supported the project.