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What Is Crowd Sourced Funding?

A while back, I wrote about social lending websites like Zopa, Prosper, and Lending Club. Today, I wanted to write about a similar type of service, though their focus is slightly different than the social networking peer loan sites.

What I’m talking about is crowd-sourced funding, usually just shortened to “crowdfunding”. This type of revenue streaming is influenced by the crowdsourcing phenomenon, where companies outsources work to groups of non-paid people in the undefined public, instead of a specifc paid employee or team of workers. Similar concepts include crowdvoting, microwork, and especially crowdpurchasing.

In each of these related topics, the idea is the “crowd has power”. In some cases, that power comes from collective knowledge or wisdom. In others, it comes from collective purchasing power or financial resources. That’s what social lending taps into, while it’s also what crowd sourcing seeks to tap, too. The differences between the two are what reciprocal benefits are asked.

Online Money Flow

When you’re talking about P2P loans, the reciprocal benefits are straightforward: the lenders want their money back with interest. They are no different than bankers, financiars, loan sharks, or investors. The investors in person-to-person lending sites want a profit from what they give.

It’s completely different when you talk about crowdfunding. In this case, the people contributing money are a cross between donors to a charity and fans wanting access to their object of affection. The crowdfunders want to help out the person they’re providing money. Their incentive isn’t just to give, though. Many want to get to know the person on the other end of the contribution, either through blog updates, webcasts, podcasts, special previews, or other perks.

Who Gets Funded?

How Crowd Sourced Funding Works

Crowd Sourced Funding is a Success When People Make a Basic Human Connection.

The people asking for these funds come from many different fields and many walks of life. Many are artistic people wanting contributions from their fandom, much like an artist or musician of old would seek patronage from a rich patron.

In the age of democracy and mass consumerism, the patron is no longer a single aristocrat, but a crowd of rabid fans. You’ll see amateur filmmakers, professional bands and musicians, starving artists, and comic book writers trying to get the revenues to get their project off the ground.

The same can be said about inventors, innovators, and scientists. If they can’t get the grant money needed for their project, they can take their story and idea to the online masses. Game designers have been known to do the same.

A lot of people outside the creative fields have gotten into this market, seeking donors and collected benefactors who might be touched by their stories. Startup companies, entrepreneurs in developing countries, students needing loans for college or university, and regular people with medical bills all have asked for financial help over the Internet. In many cases, they’ve gotten what they wanted.

Crowdfunding Websites

In fact, whole websites exist to help people get the funding they need and deserve. Below is a list of the companies, both big and small, which offer people the chance to appeal for financial help. If you fit any of the description below, you might be able to get your project financed by the online crowds.

  • Kickstarter – Creative Projects in the USA
  • Fundly – Nonprofits needing Donors
  • Microryza – Fund Innovative Research
  • GreenUnite – Projects with Positive Impact on the Environment
  • Mobcaster – Fund and Watch Independent TV
  • Crowdtilt – Groupfund Anything by Starting a Campaign
  • YouCaring – Free Online Fundraising Made Easy for Medical Expenses, Adoptions
  • TakeaShine – Crowd funding for Underprivileged College Students
  • GiveForward – Raise Money Online for a Medical Crisis
  • GoFundMe – Easy Online Fundraising with Simple Personal Donation Websites
  • 8-Bit Funding – Crowdfunding for the Indie Gaming Community
  • HelpersUnite – Charitable Giving for Artistic Projects, Business Ventures
  • Petridish – Finance Science, Explore the World with Renowned Researchers
  • Rockethub – Creative Projects in the US and Internationally
  • IndieGoGo – Creative, Commercial, and Cause-Related Projects in the US, Europe, Australia, and Canada

These are just some of the most prominent companies in this niche. Many others are available or will become available as this practice becomes better known and gains more mainstream acceptance. If you’re ever wanted to become a benefactor for an artist, a philanthropist for the needy, or a funder of creative projects, learn more about crowd-sourced funding.

Get Funded by the Masses

Certainly, if you’re a struggling artist, a person battling a disease and rising medical expenses, an entrepreneur or inventor needing some revenue to launch your plan or idea, or a university student who wants to close the gap between demonstrated and real need, choose the most appropriate site and start convincing people to finance your dreams. Stop worrying about the bankers and financiers and start appealing to people like yourself. If everyone you meet online contributes $5, you’ll have the cash you need in no time. People are crowding in to contribute.

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