Browse Definitions :
Definition

crowdfunding

Contributor(s): Ivy Wigmore

Crowdfunding is a financing method that involves funding a project with relatively modest contributions from a large group of individuals, rather than seeking substantial sums from a small number of investors. The funding campaign and transactions are typically conducted online through dedicated crowdfunding sites, often in conjunction with social networking sites. Depending on the project, campaign contributors may be essentially making donations, investing for a potential future return on investment (ROI), or prepaying for a product or service.

Similarly to crowdsourcing, the concept from which it developed, crowdfunding's success relies upon the ability to canvass a sufficiently large group of potential contributors. The idea is the same as that behind many fundraising campaigns: convincing enough people to contribute to reach a target figure.

Crowdfunding sites are sometimes referred to as platforms because they provide a venue for all aspects of a campaign, such as creation of the public interface, campaign and project tracking, a payment mechanism and disbursement of funds.

A sampling of crowdfunding sites:

  • IndieGoGo, established in 2008, allows anyone to set up a campaign for free. A fee is charged on money raised. Writers, musicians, film makers and visual artists often use the platform to fund projects but anyone can post any type of campaign. A recent campaign soliciting money to send a bullied school bus monitor on vacation amassed enough money to fund her retirement.
  • Kickstarter, also founded in 2008, is a platform for funding creative projects. Campaigns include music, film, publishing, theater and video game projects. Contributions are pledged and only charged when/if the target figure has been reached.
  • 40Billion is a platform for funding business startups. Any entrepreneur with a United States address can create a campaign.
  • Funding4Learning is dedicated to education-related projects. Most campaigns are to fund continuing education. Other projects seeking funding include student debt payment and education-related travel.
  • FirstGiving is a platform that allows individuals to create their own person-to-person fundraising pages for the benefit of any United States-based non-profit organization.
  • Spot.us is a platform for what it calls "community-funded reporting." Journalists pitch story ideas and the community collaboratively evaluates the ideas and pays to have the successful ones written. The site partners with news organizations for distribution.

In the United States, the Jumpstart Our Business Startups (JOBS) Act, signed into effect in April 2012, includes crowdfunding provisions designed to make it easier for entrepreneurs to raise funds and get new businesses established before they have to deal with compliance requirements.

This was last updated in June 2012

Continue Reading About crowdfunding

Join the conversation

2 comments

Send me notifications when other members comment.

Please create a username to comment.

How can you leave out GoFundMe? 3rd largest crowdfunding site in the world based on traffic.

Here's a recent Techcrunch article: http://techcrunch.com/2012/06/29/gofundme/
Cancel
100% free crowdfunding at fanblaze.net Other sites charge up to 10%. Keep your money for the cause! Plus, FanBlaze has more social tools.
Cancel

-ADS BY GOOGLE

File Extensions and File Formats

Powered by:

SearchCompliance

  • Whistleblower Protection Act

    The Whistleblower Protection Act of 1989 is a law that protects federal government employees in the United States from ...

  • smart contract

    A smart contract, also known as a cryptocontract, is a computer program that directly controls the transfer of digital currencies...

  • risk map (risk heat map)

    A risk map, also known as a risk heat map, is a data visualization tool for communicating specific risks an organization faces. A...

SearchSecurity

  • challenge-response authentication

    In information security, challenge-response authentication is a type of authentication protocol where one entity presents a ...

  • Secure Shell (SSH)

    SSH, also known as Secure Shell or Secure Socket Shell, is a network protocol that gives users, particularly system ...

  • honeypot (computing)

    A honeypot is a network-attached system set up as a decoy to lure cyberattackers and to detect, deflect or study hacking attempts...

SearchHealthIT

SearchDisasterRecovery

  • virtual disaster recovery

    Virtual disaster recovery is a type of DR that typically involves replication and allows a user to fail over to virtualized ...

  • tabletop exercise (TTX)

    A tabletop exercise (TTX) is a disaster preparedness activity that takes participants through the process of dealing with a ...

  • risk mitigation

    Risk mitigation is a strategy to prepare for and lessen the effects of threats faced by a data center.

SearchStorage

  • exbibyte (EiB)

    An exbibyte (EiB) is a unit used to measure data capacity.

  • zebibyte (ZiB)

    A zebibyte (ZiB) is a unit used to measure computing and storage capacity.

  • tiered storage

    Tiered storage is a way to assign different categories of data to various types of storage media with the objective of reducing ...

Close