So what happens when you want to raise some money for your business but you don’t have access to bank loans or you don’t come from a wealthy family? Well, a long time ago, people used to organize fundraising events (known as Harambees in Kenya) in order to tap into a wider community for financial assistance.
Others used to call together their family members and agree on which assets to sell in order to raise money. But times have really changed, and although some of these methods are still being used, crowdfunding has really improved the way things are done – essentially saving the asker a lot of time, and in the case of business-related fundraising efforts, time and money.
Talking about crowdfunding, GoFundMe remains the most popular website around. You simply log in, create a convincing proposal, and within a short time, people from all walks of life start contributing to your quest. As simple as that!
But as with any other good thing, there are always alternatives. Here we share with you some 5 good examples (of alternatives) including one from Kenya.
YouCaring was founded in 2011 by individuals who returned from an international mission trip and wanted to continue helping others when they returned home.
Their motto is “compassionate crowdfunding.” The “compassionate” component of this motto is in recognition of their commitment to supporting humanitarian fundraising efforts, ranging from medical missions to saving the lives of family pets. They advertise 5 major fundraising categories: medical, memorial, adoption, tuition, and neighbors and community.
Requiring a Facebook profile or email address for account registration, YouCaring offers its platform free to all users.
YouCaring users have the ability to create a webpage from which to share their story or explain the reason they need the funds. Using a template, users can upload videos and pictures and immediately share their webpages funding pages via their social networks, such as Facebook and Twitter.
Founded in 2007, Indiegogo seeks to “empower people to unite around ideas that matter to them and together make those ideas come to life.” In other words, they are a hub for creative ideas and the entrepreneurs who want to share those ideas with others. Entrepreneurs can choose from a variety of funding categories, including animals, fashion, food, photography, religion, and technology.
To start a fundraising campaign, entrepreneurs need a Facebook account or an email address.
Indiegogo offers two fundraising funding options:
The first is a fixed funding option. With this option, an entrepreneur sets the amount of money that they want to raise. If that threshold is not reached at the end of the funding campaign, the money is returned to all contributors.
The second option is a flexible funding option. With this option, entrepreneurs keep all the contributions regardless of the amount raised.
Entrepreneurs have access to a personal funding page from which they can describe their product and share with others via social media. Indiegogo provides product development support through a product development company. They also have partnerships with fulfillment and retail companies to minimize the entrepreneurs’ efforts in getting their products out into the marketplace.
Kickstarter was founded in 2009 and seeks to help musicians, filmmakers, and other creative individuals get financial backing for their project creations. In 2015, the company became a Benefit Corporation. This means that, as a for-profit company, they commit to critically thinking about how their business decisions and investments influence society as a whole. Upon becoming a Benefit Corporation, Kickstarter expanded their charter to highlight company values, including a commitment to fight inequality in the arts, business, and technology.
An email address or Facebook account is required to start a Kickstarter fundraising campaign. The platform offers creators an “all or nothing” funding option that is based on a predetermined funding goal. With this funding option, contributors make a pledge for a specific amount.
However, the amount is only collected if the funding goal is met. As part of the fundraising efforts, creators can develop a project page to show prototypes of a finished project or a description of the final project.
This crowdfunding platform was launched in 2010 as a Facebook app.
The service is now available via a stand-alone website. Fund seekers need a Facebook, Google+, or Linked In profile to create an account. They can also create an account with an email address.
While the platform can be used to raise funds for a variety of causes and ventures, the broad categories include healthcare and medical bills, accidents and disasters, funerals and memorials, animals and pets, nonprofit endeavors, and small business and entrepreneurs. The services to nonprofit organizations include management tools such as automatic creation of tax receipts for donors.
Fund seekers can set up accounts using one of two options. The personal campaign is for personal use only. The organization campaign is for those seeking funds on behalf of an organization. In this case, the person setting up the campaign must be authorized to collect funds on behalf of the organization.
Funding options include a “Keep it All” option. Funds are immediately accessible using this option. The alternative funding option is called “All or Nothing”. With this option, fundraising pledges are approved but money is only collected after the funding goal is met. Social networking tools are integrated for sharing the campaign website, which can include videos and pictures, with potential funders.
This is a Kenyan-based crowdfunding site that has been in existent for a couple of years, though most people don’t know it yet. The system uses mobile money systems such as Mpesa, Orange Money, Airtel Money and Equitel.
As you can see, there is more to crowdsourcing than just GoFundMe. So whether you want to raise funds to jump-start your business or you simply want to donate to a worthy cause, your options are not limited. Just compare the differences between these platforms and decide what is the most relevant and practical method to meet your needs.
The author is passionate about crowdsourcing and finance related topics.