What is Crowdfunding? The Clear and Simple Answer

Crowdfunding harnesses the power of social networks and the internet to give people the means to raise funds, help others overcome hardship, and meet aspirational goals. The core principle behind crowdfunding is that you can help a friend or help an entire community.

You can do everything from raising money for your surgery to fulfilling a student’s dream of attending university—and much more. You can also easily share your crowdfunding fundraiser via WhatsApp with friends and family or on TikTok and Instagram to use the power of social media.

If you’ve ever found yourself wondering, “What is crowdfunding?” “What does crowdfunding mean?” or “What are the benefits of crowdfunding?” then keep reading. We’ll answer your questions about crowdfunding and give you top tips on bringing in donations.

Start crowdfunding

The rise of crowdfunding

In recent years, crowdfunding has transformed the traditional fundraising landscape, breaking down barriers between those in need and those available to help them.

A record £13.9 billion was donated to charity in 2023. Crowdfunding has made it possible for people to directly support those who need emergency financial assistance, contributing to the larger trend of individual giving. People often turn to crowdfunding when they can’t afford the rapidly increasing cost of medical care or health insurance and have to pay for out-of-pocket costs.

What are the advantages of crowdfunding?

Sometimes, when government and nonprofit funding falls short, getting the help you need can be challenging. That’s why crowdfunding can be such a valuable resource. It allows you to reach out to your community for support in a way that’s easy and accessible. Whether you’re facing financial difficulties or hoping to impact the world positively, online fundraising can help you achieve your goals.

For those looking for crowdfunding basics, here are some of the main advantages of crowdfunding:

There are no long wait periods to receive your funds.
Crowdfunding takes the fear out of asking for financial help. Sharing your fundraiser with your network of friends and family members on TikTok or Instagram is simple.
Crowdfunding makes it easy to reach people outside of your network.

Start Crowdfunding

4 of the most common questions about crowdfunding

How do I know if crowdfunding is right for me?

Crowdfunding can work for anybody, and there is no cause too big or too small. Crowdfunding helps bring people together to help others fundraise and ultimately thrive.

Some people might worry that their fundraiser isn’t as worthy as others—but crowdfunding exists to help an array of people and needs. Whether you want to help your pet, raise money to pay for a memorial, or get help with bills, crowdfunding can allow you to overcome the financial barriers that may stand in the way when you need it the most.

Crowdfunding services are not just for individuals seeking emergency financial aid. Businesses can also use them to raise capital and fund new projects. Entrepreneurs can also use crowdfunding to finance their creative ideas or cover damages caused by burglary.

What are the different types of crowdfunding?

Donation-based crowdfunding: This type of crowdfunding is the most common when looking up “what is a crowdfunding campaign.” In donation-based crowdfunding, people search for and support a cause by donating to it without receiving anything in return.

The person running the fundraiser isn’t obligated to pay back donors or give them anything else in return for their contributions. GoFundMe crowdfunding is one of the major sites that uses donation-based crowdfunding.

Equity-based crowdfunding: In equity-based fundraising, the fundraiser organiser accepts money from people looking to invest, typically to help launch a business. In return, investors will receive small equity in the business or company.

Rewards-based: Through rewards-based crowdfunding on platforms like Indiegogo and Kickstarter, the fundraiser organiser provides a reward or products to donors, usually a service or physical item, in exchange for a contribution.

Note: GoFundMe only allows donation-based crowdfunding.

Is it okay to raise money for myself?

Absolutely. Feeling nervous about asking for help when fundraising online for personal needs is understandable. However, it’s important to remember that financial difficulties are something that many people go through. You might be pleasantly surprised to find out just how many people are willing to lend a helping hand during tough times.

What is the best way to get more donations?

While there’s no magic formula for crowdfunding the most donations, you can definitely take steps to set yourself up for success. It’s crucial to develop a fundraiser that is captivating and resonates with your community. Investing time into your fundraiser story will inspire your network of friends and family to take action.

How is crowdfunding on GoFundMe different?

We empower people to rally support for personal and charitable causes. We built our reputation by serving and supporting our community of organisers and donors, and we continue to build on that trust every day. GoFundMe’s giving community is more than 50 million strong and has raised more than $9 billion.

How it works

Our industry-leading fundraising tools help individuals, groups, and organisations share their stories far and wide. Even small donations can eventually grow into something extraordinary.

1. Create your fundraiser

GoFundMe helps you quickly create a fundraiser and tell your story. You can raise money as an individual or invite others to join your fundraising team. Learn more about team fundraising.

2. Share your fundraiser

Our sharing tools help you spread the word about your story via social media, emails, and even text messages. We make it easy to keep your network informed so you can raise more money quickly.

3. Easily accept donations

GoFundMe allows you to send donations directly to your or your beneficiary’s bank account, so you can get help right away.

Find out how it works

Choosing the right crowdfunding platform

Here’s what sets GoFundMe apart from the rest:

Trust & safety

Backed by the GoFundMe Giving Guarantee, our platform is the safest, most secure place to give and receive donations. We have a dedicated Trust & Safety team that works day and night to prevent misuse and make sure funds reach the right hands.

Advanced tools

The key to fundraising success is sharing your fundraiser with as many people as you can. With built-in social fundraising technology, GoFundMe crowdfunding makes it easy to spread awareness for your fundraiser so you can increase donations.

Fundraising resources

Our resource centre offers proven fundraising tips to set you up for success. Our blog is packed with content that helps you drive more donations to your fundraiser.

Crowdfunding best practices

Tell a compelling story

From your title to your story and photos, your fundraiser story should be based on your needs and it should inspire people to donate. Before getting started, learn how to make your fundraiser successful with our fundraiser story tips. And don’t forget to upload several high-quality photos or a video to exponentially increase donations to your fundraiser.

Share and update

Every time you share your fundraiser, you’ll bring in an average of £33 in donations—so share your fundraiser often on Instagram, Facebook, TikTok and other social platforms to encourage others to do the same. If you get enough momentum going, your fundraiser could go viral. Well-written updates with any news you share will keep supporters and potential donors engaged and in the loop.

Thank your donors

It’s crucial to show donors that their contributions are greatly appreciated, just like we thank someone for doing a good deed. Instead of giving them gifts or rewards, sending heartfelt thank-you messages is an excellent way to let each donor know how much their support means to you.

Expressing gratitude can inspire donors to give even more and continue supporting your cause beyond the original crowdfunding goal.

Our blog post, How to Write a Donation Thank-You Letter That Gets You to Your Goal, will walk you through crafting the best thank-you possible. Be sure to check out our 20 Affordable Ways to Say Thank You to Donors list if you’d like to show your gratitude beyond an email.

View more tips

Fundraiser Success Stories

When Constance was 13, she was offered a place at The Hammond School to study ballet. Her mum, who is raising Constance as a single parent, couldn’t afford the fees and all the associated costs – so turned to GoFundMe so that Constance could achieve her dream. Since the fundraiser was started in 2021, more than £120,000 has been raised and Constance confirmed her place at the school. Her mum wrote in an update on the page: “I cannot beleive its been a year since you lovely people changed my daughter’s life.” She’s since passed all her GCSEs with “flying colours” too.

Florrie Bark is an inspirational little girl. Florrie was diagnosed with cancer in 2022 and her positive attitude and infectious personality has earned her thousands of followers on social media. Florrie decided she wanted to help other children with cancer and began making videos explaining what went on with her treatment and hospitals so they felt less scared. Florrie has also launched her own charity, BeMoreFab, to continue this work. She’s fundraising here.

In 2023, Storm Babet hit the UK hard. One of the worst affected areas was Chesterfield, in Derbyshire. Hundreds of people were affected by flooding from the adverse weather, destroying homes, businesses and livelihoods. The community came together to start this fundraiser to help. More than £100,000 was raised to help people start to rebuild their lives in the area.

Start a GoFundMe

Become our next success story

Our crowdfunding lessons help make fundraising simple.

Crowdfunding lessons

Lesson one: Sharing

Lesson two: Photos

Start Crowdfunding