Current Issues in Online Fundraising
Online crowdfunding has changed the way people raise money for businesses and projects. It offers the ability to set up a system where average people can invest in the products and services they want to see made real by other people and companies. Certainly, even the author has pledged money in the past for charity, software, and physical rewards which would not have been possible through more traditional methods of fundraising. However, since the launch of the most popular online crowdfunding sites in the late 00’s, a number of problems with the services have become apparent, and it is clear that technology has outpaced the novelty of promising things to be made in the future.
Online fundraising has many benefits, including how easy and fast it is for people to donate. The added efficiency and cost savings has been a boon to charities and fundraising campaigns worldwide. In fact, one in every four individual fundraising dollars are from online giving. There are a couple of disadvantages, too, including how between 2014 and 2016 online donations shrunk from 48% to 32% of the overall average gift in 2016. One way to combat this is to bridge the divide between large companies and smaller organizations and charities with online fundraising campaigns that make it easy and beneficial for everyone using the platform.
Commercial partnerships, choice, and ease of use may be the answer. There are a limited number of causes that customers want to support, and if a business chooses to partner with a certain cause, they traditionally will sell products at a higher price point, then donate part or all of the proceeds to the selected cause. What about their regular customers who do not want to donate to the selected cause? They will not be willing to pay extra for the same goods and services, and other people who want to support a specific cause may wish to put their money elsewhere. This is just one example of how there is a lack of incentives in current online fundraising platforms for businesses to effectively partner with creators, other companies, and the platforms themselves.
FundCru addresses this by selling goods and services at a lower cost and not overcharge for the same products by lowering the cost of customer acquisition and not needing to pay for sometimes overwhelming operational costs of charitable organizations. We also partner with many different companies and charities so that the buyer’s choices are virtually unlimited, and we make the entire process easy and fast. We save you time and money and make it easy for you to donate to your favorite causes.
Platform fees are also hindering the growth of the crowdfunding industry. For a variety of reasons including overhead, processing and transfer fees, corporate policy, and other fees, the most popular fundraising platforms can reach up to 12%. That is a substantial amount of money to ask for anyone to give up, be they artist, celebrity, charity, or an established corporation. The high percentage of fees is not going to the end cause and hurts projects which might be able to raise $500,000 but fall short of the needed $560,000 to cover the fees. It is also particularly upsetting for people donating to emergency aid campaigns to learn approximately 10 cents of every dollar they give are being taken by the platform itself, something they were trying to avoid with traditional charities and their well-known overhead and operation costs. We believe that as much money as possible should go directly to the causes and companies that raise them.
Finally, there is a lack of cryptocurrency support across the most popular crowdfunding and fundraising sites. While many customers may not currently use Bitcoin or Etherium, the number of people who use these currencies is growing by the day and shows no signs of slowing down. Many customers value their anonymity when making purchases, and there’s an untapped market for people looking to donate, pledge, and invest using cryptocurrencies and the benefits they provide. Additionally, the benefits these methods of paying have for fundraising solve many of the problems inherent in the current models, especially in reducing overhead.
We are not here to bash the current online fundraising models. After all, it is currently a multi-billion dollar global industry which allows money to be used to aid, innovate, and grow. They help families raise money for expensive and possibly unattainable medical treatments, allow individuals and companies to raise money for projects which would not be feasible under traditional investment practices, and has given birth to entirely new industries (and even revived a few old ones).
We’re simply illustrating some of the issues fundraising platforms currently face, as well as those being seen industry-wide. I can’t wait to show you how FundCru aims to solve these problems and bring fundraising into the future.
