Considering Online Crowdfunding? Read This First

Over the past few years, fundraising websites have leapt en masse to the forefront of the donating world. Although early iterations such as Indiegogo and Kickstarter, originally created to support funding of the arts, have been around for nearly a decade, newer sites like GoFundMe and YouCaring have become effective ways for people to finance everything from medical bills to international charity trips with the help of family, friends and occasionally even kind strangers. Thinking of trying one of these sites for your next fundraising endeavor? Here’s how four of the most popular stack up.


Indiegogo has long been home to burgeoning artists in need of a financial boost — indeed more than 41,000 films have been funded using the site. Today, it plays host to campaigns supporting everything from self-publishing a book to launching a small business.

John Amble, one of the co-founders of the multimedia platform War On the Rocks, used Indiegogo to great effect, raising more than $60,000 in just a month. Producing a website about the military, by the military, Amble and his co-founders initially used Kickstarter to raise about $5,000 for the seed money and then turned to Indiegogo.

“It was between Kickstarter and Indiegogo but we talked to a lot of people who had done this kind of thing before, which is why we went with Indiegogo,” Amble says.

According to Amble, War On the Rocks has two very separate reader audiences — one in their 20s and 30s and one in their 60s and 70s, which caused some trouble when it came to online donations.

“We found [people are] completely happy using PayPal if you’re young,” Amble says “Some of the older people who contributed were uncomfortable with that and sent us checks, so that wasn’t reflected on the website. We raised about $6,000 or $7,000 separately.”

Amble and his team had no idea where they wanted to set their fundraising goal, and had people recommend everything from $10,000 to $150,000. In the end, they settled on a goal of $100,000.

“We did a lot of reading about how to encourage contributors and setting up your rewards,” Amble says. “Shorter campaigns, a month or less, do better because you can put all your energy behind it and people don’t get tired of it.”

One of Amble’s favorite things about working with Indiegogo was that it offered the option to create custom URLs for contests. Essentially, anyone could create their own link to a specific campaign and share it on their own social media platforms to funnel money toward the campaign in exchange for a special giveaway.

“Whoever refers the most contribution gets a customized War On the Rocks set of whiskey tumblers or that kind of thing,” Amble says. “That was one of the things that really helped us the most.”

Unfortunately, like most other fundraising websites, Indiegogo takes a substantial cut of the money raised — a 3 to 5 percent PayPal fee, a 5 percent platform fee and 3 percent plus 30 cents a donation for all third-party credit cards.

“You set your goal, and if you reach it, they take a cut. If you don’t reach the goal, that cut almost doubles,” Amble says. “In our case, that was over $6,000.”

Amble says he can’t really complain, however. “If there was room in the market for someone to come in and take less, they would have done it,” he says.


Like Indiegogo, Kickstarter has traditionally been grounded in support of arts-based projects. Brett Bulthuis, a photographer, used Kickstarter to fund a book of photographs he shot on a recent trip to Japan. His campaign was relatively small, with a goal of only $500 (although he and a partner ended up raising close to $900).

The fundraising took a few months, Bulthuis says, although a majority of the donations came in the first few weeks before he left for the trip. The remaining 30 percent or so trickled in up until the deadline they had sent for the campaign.

“Kickstarter is very much about the deadline, the timeline. If you don’t reach your goal by the end [then] everyone gets their money back and you get nothing,” Bulthuis says. “We set [our deadline] for longer than we needed so people could decide to join in.”

Robert Avakian, a member of a team of ex-athletes in the process of developing an all-natural sports drink called TRUenergy, used Kickstarter to raise more than $22,000 to get production up and running.

“Especially for my product, which is a drink, Kickstarter is the best for food and beverage crowdfunding,” Avakian says. “You can get some decent information on your pledges and how they’re finding your product. They give you a lot of opportunities to get noticed.”

Avakian and his team set their campaign to last for 30 days and passed the goal within a week of the deadline. At first it was people who already knew about the campaign donating, but slowly buzz — and donations — began to build.

“The goal was to have as many people as possible know about TRUenergy. We had press features, blogs and we were able to generate some really good pushes in the beginning, which was a major key for the Kickstarter algorithm,” Avakian says.

Both Avakian and Bulthuis say that while friends, family and coworkers contributed the initial investments, money also came in from total strangers.

“A few random people joined in at the end for some of our largest contributions, our angel investors if you will,” Bulthuis says. “One guy just said he found it while looking through the arts section and just said he supports the arts and threw in 100 bucks.”

Users like Bulthuis find the all-or-nothing principle to be one of the biggest drawbacks to using Kickstarter, however.

“Originally I wanted a campaign with a much higher goal — I wanted to completely fund my trip … but then I read the fine print,” Bulthuis says.

For this reason, many have instead turned to sites like GoFundMe that do not require you to reach your goal in order to receive your funds.


GoFundMe, a fundraising website launched in 2010, is a popular choice for people who need help with personal issues, like medical bills or funeral costs.

The site offers built-in social media tools to help you share your campaign with family and Facebook friends but also offers search functions like other sites so that strangers can offer help to causes that speak to them.

“GoFundMe removes the physical barriers traditionally associated with receiving financial support from the people in our lives,” says Kelsea Little, GoFundMe media director. “[It] helps you raise more money, more quickly.”

Sajji Lazarus
Photo courtesy of Sajji Lazarus.

Sajji Lazarus, a senior graphic artist in New York City, raised $4,625 for a trip to India with a nonprofit that teaches rescued adolescent sex workers self defense.

Lazarus’ initial goal was only $2,000 but she later increased it to $5,000. She raised all of her funds in a little over a month.

“Since we’re predominantly self-funded, [GoFundMe] was an extremely fruitful venue, and was enough to purchase my flight to India and back,” Lazarus says.

Lazarus’ favorite part of using GoFundMe was its user interface and the ease of communication via social media outlets — partly because that made asking for donations so much easier.

“I could post to all my accounts automatically and simultaneously,” Lazarus says. “The fact that it was online permitted me a wider audience and allowed me to hide my face online while still unabashedly asking for donations.”

According to Little, more than 10,000 new campaigns are started each day on GoFundMe. The most popular categories are medical, memorials, volunteering, education and sports, she says.

GoFundMe users are also hit hard by fees though — the site charges 7.9 percent of the total and 30 cents per donation. Lazarus says she wasn’t aware of how high the percentage was and “lost nearly $900 of my total amount collected [which was] very bittersweet.”

Lazarus says that while she would use an online platform to fundraise again, she would avoid GoFundMe in the future due to the considerable fees.

“It’s a trusted service … but the percentage they took from my donations was astronomical, and included docking me for every individual time I transferred money to my bank,” Lazarus says. “I wish they had been more transparent about fees, but ultimately it was my own ignorance in not knowing beforehand.”


Fundraisers who prioritize avoiding hefty fees increasingly turn to YouCaring.

Leonard Lee, head of communications at YouCaring, says the site is unique in that it describes itself as the “pioneer in free cause-based crowdfunding.” YouCaring doesn’t charge any fees to start a campaign or to donate, apart from a 3 percent PayPal credit card processing fee that all crowdfunding websites are required to charge.

“Most of the other crowdfunding sites [charge] fees for donating, somewhere between 5 and 10 percent so the beneficiary doesn’t receive 100 percent of the donations,” Lee says. “We don’t charge any fees beyond [the PayPal fee]. But other crowdfunding platforms put a fee on top of that for their services.”

Like GoFundMe, the majority of campaigns — about 50 percent, according to Lee — deal with medical expenses. They also offer 13 other categories from funerals and memorials to disaster relief, adoptions, education, pets, volunteer and service projects. YouCaring hosted about 170,000 campaigns last year, and many repeat donors to the myriad causes supported on the site.

Lee says it’s surprising how many donors return time and again to give money, sometimes to complete strangers.

“They might come initially to donate to a friend but [then] they see the wide scope of campaigns we run,” Lee says. “Many people become regular donors to campaigns that really strike a chord with them.”

Asking for online donations through a platform like YouCaring or GoFundMe is very humbling, Lee says.

“People have to reveal very personal situations involving themselves and their family. It’s difficult for people to ask for help,” Lee says. “We all like to think we’re strong and self-reliant. But once people take that leap of opening up … they’re often amazed by the response and the outpouring of not just generosity, but support they get when they ask for help.”

More from Make It Better: