Crowdfunding is a method of raising finance from a large number of people who each contribute small amounts of money. It has grown significantly in recent years due to new online crowdfunding platforms. Crowdfunding can collect money through donations or loans and campaigns can be set up with an "all or nothing" or "keep it all" funding goal. Campaign creators offer rewards to backers and must consider the advantages of broader funding access versus the disadvantages of increased workload and intellectual property risks before starting a crowdfunding campaign.

1. Online crowdfunding

2. What is crowdfunding?
Raising finance from ‘the crowd’ – usually raising small sums from a
large number of people
• It’s not that new!
• New opportunities online – lots of different cloudfunding platforms
that host your ‘pitch’ and facilitate financial transactions for a fee
• Can collect finance in the form of loans or donations
• All or nothing / keep it all approaches
• Rewards can be offered in return (but don’t have to be)
• Equity crowdfunding is different (we can’t cover that today)

3. Facts and
figures
Information taken from Nesta publication
‘The Rise of Future Finance’
www.nesta.org.uk/sites/default/files/the_ri
se_of_future_finance.pdf
Backers, donors and investors
6.35million 2011
7.69million 2012
9.4million 2013
A 21.5% increase each year

4. How does it work?
www.whitefusemedia.com/blog/crowdfunding-viable-
option-uk-charities
1. Pitch – your idea / project with fundraising target or
milestones
2. Screening – the ‘platform’ (website you use) will
screen your pitch before it goes live
3. Pitch goes live – your pitch gets a webpage which
will include your project details, targets,
milestones, funding deadline, any rewards and
amount raised so far
4. Public pledge money before your deadline. If your
funding is ‘all or nothing’, you will receive funding if
your target is reached, otherwise backers will
receive the amount they’ve pledged back. If your
funding is the ‘keep it all’ model, you will receive
money pledged even if your target isn’t reached
5. Project development. If you have offered rewards
to those who have pledged, this is the time to give
them.

5. Things to consider before jumping in
Advantages Disadvantages
Access to capital funding that traditional
funders may not support, especially in a
more competitive climate
Lots of work and no substitute for other
forms of fundraising
Shows you real demand for your project
rather than perceived demand
Risk / pressure – all or nothing model
A cheaper way to fail! Intellectual property may be at risk
Online nature means you can go beyond
your geographical area
Beware what legislation may apply to
you
Could help with marketing

6. Further reading / information
Nesta is a great starting point for all things crowdfunding. It is currently running a crowdfunding project and has lots of
information on its website, as well as a blog to give you some further guidance about whether crowdfunding is right
for you: www.nesta.org.uk/project/crowdfunding
One of those blog posts by Nesta. This one gives ‘10.5 tips to help you reach your crowdfunding goal’:
www.nesta.org.uk/news/crowdfunding-tips
Nesta has also launched a website called Crowding In, which has a useful FAQ on the topic, as well as a directory to
help you choose the right crowdfunding platform for you: www.crowdingin.com
Funding Central’s introduction to crowdfunding: www.fundingcentral.org.uk/Page.aspx?SP=6549
Useful guide to crowdfunding and some hints and tips for getting started, choosing a platform and making an engaging
pitch: www.thefundraisingauthority.com/internet-fundraising/crowd-funding-your-non-profit
Charity Comms article on how to run a successful crowdfunding campaign: www.charitycomms.org.uk/articles/how-
to-run-a-successful-crowdfunding-campaign
A summary of crowdfunding platforms available to UK charities: www.whitefusemedia.com/blog/crowdfunding-viable-
option-uk-charities