5 tips for choosing a crowdfunding platform
Are you determined to start a crowdfunding campaign? awesome! But how do you know which crowdfunding platform is right for you? Whether you are raising money for economic emergencies, business ideas, creative projects, personal dreams, or helping a needy friend, you need to consider the following five factors when choosing the right crowdfunding platform:
- Type of fundraising
- Features and performance
- Customer service
How to choose crowdfunding platform
1、Type of fundraising
Not all fundraising platforms are built for the same thing, so you first need to understand the type of fundraising you need.
1.1 Type of fundraising: individual
If you are an individual who raises funds for a neighbor, friend, family member or organization, you’d better choose a platform that focuses on individual fundraising.
They can help you quickly create projects, including the basic sharing features you need, and allow you to start collecting donations and withdrawals right away.
For example, GoFundMe, YouCaring, AirFunding, Generosity (IndieGoGo’s personal focus platform) and JustGiving. Many of these platforms also allow individuals to raise funds for non-profit organizations and send funds directly to the charity of your choice.
1.2 Types of fundraising: commercial or creative projects
If you’re looking to launch a product or launch a creative activity, consider using a project-focused fundraising platform such as Kickstarter or IndieGoGo. The project’s production process may take longer (Kickstarter’s project will be manually reviewed before it is allowed to be released on its platform), and your fundraising should be closer to the project proposal, so it is important to spend some time.
In addition, these platforms are very focused on providing incentives to your donors to encourage them to donate. Although you can also use a personal fundraising platform for fundraising for business or creative projects, you can raise more donations with a more professional display page on the project-based crowdfunding platform.
1.3 Type of fundraising: non-profit
If you are a non-profit organization that wants to raise funds online, then there are some options. You can do simple one-time fundraising on a number of personal fundraising platforms that offer charity fundraising options.
Some features will be limited, but it can still be made quickly and easily. However, if you want more powerful features, consider a platform like CrowdRise, Classy or FirstGiving. The features they provide make it easier for non-profit organizations to raise funds, such as incorporating event registration into your crowdfunding project or integrating with your nonprofit CRM software.
You can usually try out the free version of the product before you become a paid user to experience more advanced features.
2、Consider the characteristics and performance of the crowdfunding platform
Each platform offers unique features to help their fundraisers succeed, so let’s take a look at some of the most famous features below.
2.1 Consider the characteristics and performance of the crowdfunding platform: Is it flexible to build feedback options?
As long as the platform’s feedback function is solved, it is relatively easy to create and operate crowdfunding projects for others. JustGiving and Generosity will ask you to add bank account information about your beneficiaries, so make sure they are happy to provide you with personal bank account information before signing up.
On the other hand, GoFundMe allows beneficiaries to create a separate but interrelated account, and they can safely enter their own information to withdraw donations. Although YouCaring also offers a reward beneficiary option, both you and your beneficiary need to write to their review unit (the response takes 3 days) to complete the transfer.
If you are raising funds for a non-profit organization, you should first confirm that the charity is on the platform so that they can easily get a donation.
2.2 Consider the characteristics and performance of the crowdfunding platform: How fast can you get donations, are there any restrictions?
Individual fundraising sites such as GoFundMe, HoneyFund and YouCaring typically send funds within 2-5 business days, which is the fastest of all crowdfunding platforms. Project-based crowdfunding platforms like IndieGoGo and Kickstarter take longer, and both require you to achieve the goal of recovering money (Indiegogo is more flexible and organizers don’t have to reach their goals).
Indiegogo will send funds within 15 business days of the end of your crowdfunding program, and Kickstarter will send funds 14 days after you reach your goal.
2.3 Consider the characteristics and performance of the crowdfunding platform: Do you need an app to enhance the user experience?
While most crowdfunding platforms have mobile app apps, managing your project with the same app as the online service will give you the best “anytime, anywhere” experience. Both Kickstarter and GoFundMe have a well-respected APP app on Google Play and the Apple App Store, and users have given a high rating to both platforms.
GoFundMe recently launched a unified application experience where donors can browse crowdfunding projects, and event organizers and feedback beneficiaries can easily manage their accounts. Kickstarter’s app is great for exploring other successful projects to inspire creative thinking, making it easy to be the next sponsor of a popular crowdfunding project.
3、Assess the credit safety regulations of the crowdfunding platform
For any online fundraising platform, it is important that they have the necessary security to ensure that you and your donors can operate financial information with confidence.
3.1 Assessing the credit safety norms of the crowdfunding platform: network security
All crowdfunding platforms need to use encrypted Secure Sockets Layer (SSL) technology to process payments, the same technology used by banks. Since the industry needs this, publicly displaying this hint does not necessarily make the site more secure because it is required. The real difference is whether the site’s PCI user security is up to standard (if any).
At the current security level, Facebook and GoFundMe have the highest level of PCI user security level relative to other platforms, while others like Fundly are unable to reach level 1 because they do not handle sufficient payment capabilities.
3.2 Assessing the credit safety norms of the crowdfunding platform: the commercial rating of the platform
If the company conducts an A + BBB review and publicly responds to customer complaints, they truly value the customer experience. If the company has A+ comments but does not respond to the user’s public complaints, this may have some obvious problems in their business operations, and the result is likely to be a lack of good customer service.
3.3 Assess credit security practices for crowdfunding platforms: trust and security
This is a good sign if you can easily report a project. All credit-worthy websites should have the option to report fraudulent activities to ensure the security of the site. YouCaring, Kickstarter and GoFundMe can easily report suspected fraudulent projects and publicly mention their credit and security technology service teams. GoFundMe’s user safety credit guarantees have surpassed GoFundMe’s guarantee that you don’t have to pay for crowdfunding insurance.
4、Customer service mechanism of the crowdfunding platform
The perfect project is the smooth and perfect execution of the platform from start to finish, you do not need to ask for help. However, this situation is rare. Because you may at least seek the assistance of an online customer service to assess whether the fundraising platform can continue to establish contact with the platform, so that you can better understand the expected results after participating in the fundraising project.
5、Utilize the cost of the crowdfunding platform
Although the crowdfunding platform provides a simple and easy way to raise funds, there is a price to pay for using the platform. Most platforms share a certain percentage of the funds you raise, other platforms need to pay extra upfront fees, and some platforms offer a 0% fee, and sponsors can leave optional tips. Most platforms currently have mandatory platform fees. It is important to understand the entire cost structure before starting to share crowdfunding projects and accepting donations.
5.1 Costs of using the crowdfunding platform: platform costs
Indiegogo and Kickstarter need to pay for the platform, but ask the organizers to reach their funding targets for crowdfunding. (Indiegogo also offers a “flexible financing” option that allows organizers to retain all funds raised, minus platform fees) but if not met, all sponsors will receive a 100% refund of the donation.
5.2 Costs of using the crowdfunding platform: upfront costs
In addition to platform and/or payment fees, well-known crowdfunding platforms such as Classy, CrowdRise Premium and HoneyFund Elite have a subscription fee mechanism. While the overall cost will increase, the extra features they provide may be worth the user experience. There are also other websites that offer less platform fees to reduce upfront costs.
5.3 Cost of using the crowdfunding platform: sponsor tips
Both YouCaring and GoFundMe offer a free fundraising platform that allows donors to pay for platform fees through a “fundraising platform”. All fundraising platforms are subject to a handling fee, and the sponsor’s extra tip generally does not cover these platform fees.
Make your choice between comparing crowdfunding platforms and suitable scenarios
There are so many options for online fundraising, I believe that you will rarely choose a platform that provides a relatively poor user experience as your first choice. However, we hope that the suggested items in this list will help you to screen out the most suitable fundraising platform for you.
Whether it’s a creative project, a birthday surprise party, or the best honeymoon you can ask, fundraising is the quickest and easiest way to get money from family and friends and the online community. Try starting your first crowdfunding project!
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