In a single year, crowdfunding raised over $34 billion dollars – making it just as competitive, if not more so, than venture capital funding.
The most successful campaigns only take an average of about 9 weeks to make their funding goals.
When you need money in your pocket, or if you’re just trying to get your company off the ground, you should seriously consider looking into crowdfunding.
Of course, one of the most important decisions you’ll make in the process is which crowdfunding platform to use to launch your business. In the past, sites like GoFundMe and Kickstarter were two of the biggest names in the crowdfunding.
Now, however, site like GoFundMe have a new challenger – Facebook!
Read on to learn more about the competition.
GoFundMe is one of the most popular crowdsourcing sites on the market today.
First of all, it’s incredibly easy to use. It only takes a minute to set up your account, and even less time to share it on social media. You can raise funds for a project, a charity, yourself, or someone you care about.
You can even raise the funds to start your company or to fund a prototype for a new product you want to create!
It’s popular because there aren’t any deadlines – meaning that even if you don’t hit your goal, you’ll still be able to keep the funds you did raise.
It’s also popular because it’s a great bargain. It’s completely free to set up your account/campaign, as well as to share it online. GoFundMe takes just an 8% profit from each individual donation you get – and it’s automatically deducted.
5% of that is the fee to list on the site, and 3% is a processing fee.
Also, you can even keep raising funds once you achieve your initial goal. This means that you can keep growing and expanding your dreams based on the support you get and the interest you generate.
About Facebook’s Fundraising Tool
While there was nothing wrong with GoFundMe, even the crowdfunding industry isn’t afraid of a little healthy competition (after all, there are already several crowdfunding platforms out there to choose from!)
As long as you’re over the age of 18, you can start a fundraiser on your Facebook account for yourself or a friend. You’ll even be able to raise funds for people that don’t have a Facebook account.
You may know that in the past, Facebook allowed nonprofits exclusively to raise funds on the social media platform. But now, it’s open to all.
Facebook Crowdfunding Fees:
While nonprofits will stay pay the same 5% fee that they did in the past when crowdfunding on Facebook, personal campaigns will need to pay a 6.9% transaction fee. Personal campaigns will also be charged 30 cents for every donation received.
Facebook Crowdfunding Categories
The campaigns will fit into 1 of 6 possible categories:
- personal medical expenses,
- vet bills for a pet,
- crisis relief/aid,
- funeral/grief expenses, &
- personal emergencies.
Facebook says they want to be able to offer more categories in the future.
Before your campaign goes live, it will be reviewed within 24 hours. Also, while those that don’t have Facebook accounts are able to view the fundraiser, they can’t donate unless they create an account.
So, Which One Should You Go With?
Which option you decide to go with depends on several things.
First of all, what are you raising money for? If it’s for a business idea, to get your company off the ground, or to fund other commercial interests, you’re likely better off going with GoFundMe.
This is because everyone who has Internet access has the possibility of seeing it. Also, keep in mind that so far, business-related funding isn’t a category on Facebook’s fundraising tool.
However, if you’re raising funds for personal emergencies or a nonprofit of some kind, it’s likely that Facebook might be a better option.
First of all, it offers the enormous benefit of showing up in your newsfeed – right in front of people who know you personally and (hopefully!) care about you and your fund.
Though more people may see your campaign on public crowdfunding sites, it’s likely that far less of them will know you on a personal level, as your Facebook friends likely do.
Facebook does have a lower fee, but it also may take longer to process the money you receive. However, if you are able to wait about 2 weeks to get the funds after the campaign ends, it may be a better option.
After all, every little bit helps!
Finally, it just depends on how comfortable you are working with a newer crowdfunding site. Of course, GoFundMe has been around for quite some time and is familiar to more people.
It also has a proven track record of success. While we don’t doubt that Facebook’s fundraising tool will be just as successful, it’s certainly not immune from many of the glitches or just “kinks” that any kind of new online platform is usually faced with.
In the end, it all really comes down to personal preference and the reasons why you’re trying to raise funds.
Need More Crowdfunding Advice?
Of course, this article has only covered two of the possible crowdfunding platforms out there!
When you’re thinking about getting into crowdfunding, it’s incredibly important that you take the time to really get familiar with the intricacies of what it’s all about.
You need to know as much as you can about all the different platforms outside of GoFundMe. You need to look into what makes for a good campaign, and why so many others fail.
You need to know how to craft compelling content, and how to tell the kinds of stories that make people drop what they’re doing and run to get their credit cards. You also need to know how you can determine the amount of funds you need to raise.
As you can see, there’s a lot to think about and to work on!
Don’t worry – we’re here to help make the process of crowdfunding just a little bit easier.