The concept of fundraising has been around for years and it’s been the common term used for raising money for a certain cause. But for the past couple of years crowdfunding circled around the Internet communities creating all sorts of buzz and gave birth to various products from the wacky to the mighty useful. But taking a general look at both terms, crowdfunding and fundraising seem synonymous.’But when you look at what actually takes place during the activity, crowdfunding is a bit more like an evolved form of fundraising.
Fundraising is an activity that is more familiar to the average individual. People will immediately associate it to words like “non-profit”, “charities” and “donations”. People who donate money to these fundraisers know not to expect anything in return and understand that these contributions could have long-term effects depending on the cause.
Crowdfunding takes the fundraiser idea a bit further by modernizing the means of donating on the Internet and adds a few twists. It is different than fundraising in the sense that the raised money will be used for short-term projects and causes. Of course, these projects and causes could span years of development depending on what it is but most projects that need funding are very open to the public on things like the timeframe and things that need to be done to attain the goal.
Another highlight of crowdfunding is the rewards system where people who donate money get some sort of reward depending on the amount contributed. Oftentimes, people who donate small amounts will get the finished product they helped the project creator make. The amount is usually lower than the normal cost of the product which gives an incentive to people who contribute to the project before it is completed.
This is where the line between crowdfunding and fundraising gets blurry. But always remember that crowdfunding in general should still be associated to donating. Giving money to support a project doesn’t entitle you to the indicated reward. Creators are encouraged to do their very best to keep their donors happy but donors should only give their money if they support the creator’s vision whether it is some project or charity with rewards. Crowdfunding is set to overtake the traditional forms of fundraising but never forget its roots.