By Aaron Smith
High-tech inventions tend to dominate news stories about crowdfunding, as well as the “most-funded projects” lists on many of these platforms. But Americans who use these sites are especially likely to say that they have donated to a project geared toward helping someone in need, most specifically friends or family. Some 68% of crowdfunding users report having contributed to a project to help an individual facing some sort of hardship or financial challenge, according to a Pew Report on Internet and Technology. Overall it has become pretty clear that online giving to friends and family is the most popular type of crowdfunding donation currently given and doesn’t seem to be changing anytime soon.
Among those who have contributed to this type of online project to help someone in need, 63% say they have given to help a friend of a friend or an acquaintance, while 62% have contributed to help a close friend or family member. By contrast, just 7% of these donors have given to a campaign to assist a public figure, while 28% have given to help someone who was not a public figure, but whom they did not know personally.
Projects to help someone in need are an especially widespread use of crowdfunding platforms, but contributions to other types of projects are relatively common as well. The survey asked about several other types of projects and found that:
- 34% of crowdfunding donors have contributed to a project to fund a new product or invention.
- 32% have contributed to a project for a school.
- 30% have contributed to a project for a musician or other creative artist.
- 10% have contributed to a project for a new restaurant or another type of business.
In addition to being the most popular type of donation in general, projects to help a person in need hold the widest appeal for frequent and infrequent donors alike. Some 68% of both casual donors (those who have contributed to five or fewer projects) and frequent donors (those who have contributed to six or more projects) have donated to projects of this sort. By contrast, other types of projects – especially those designed to fund a new product or invention – are much more popular among users who have contributed to a wide range of projects. Fully 65% of frequent donors have contributed to a project for a new product or invention, more than double the share of occasional donors (29%) who have done so. These frequent donors are also substantially more likely to have contributed to other types of fundraising projects (such as those to fund a musician or creative artist, or for a restaurant or other business) as well, although these differences tend to be more modest.
Female crowdfunding donors are more likely to contribute to help someone in need; men tend to contribute to a wider variety of projects, especially those funding new products or inventions
Overall, women are a bit more likely than men to donate to a crowdfunding project of any kind: 24% of women and 19% of men have done this. But among project contributors, men are much more active than women – both in terms of the number and type of projects they fund and the size of the contributions they make.
Male donors are roughly twice as likely as female donors to have contributed to six or more projects (17% of male donors have done so, compared with 9% of female donors), and also nearly twice as likely to have contributed more than $100 to an individual project (22% vs. 12%). They are also substantially more likely to have contributed to projects seeking to fund a new product or invention, as well as projects for a musician or other creative artist. On the other hand, women are significantly more likely than men to contribute to a project to help someone in need – 75% of female donors have contributed to this type of project, compared with 58% of men.
Looking within the male donor population, younger men, in particular, stand out for their interest in funding projects relating to new products or inventions. Nearly half of men ages 18-49 who have contributed to a crowdfunding project (48%) have given to a project to fund a new product or invention – a figure that is substantially higher than the share of similarly aged women (31%), older women (20%) or older men (27%) who have done so. By the same token, younger male donors (that is, those ages 18-49) are substantially less likely to have contributed to a project to help someone in need – just 54% have done so, compared with 75% of younger women, 74% of older women and 67% of older men.
Crowdfunding donors value their personal connection to the projects they support and the ability to highlight causes that might not get much attention from established charities
When asked about potential attributes that might describe crowdfunding platforms, users responded especially strongly to the notion that these services foster personal connections between donors and the causes they support and offer a space to highlight businesses or projects that are not widely known. Fully 87% of crowdfunding donors believe that these platforms help contributors feel more connected to the projects they support (just 5% think this is not the case), while 84% believe that these platforms are a good way to highlight causes that might not get much attention otherwise (4% do not think this describes crowdfunding well). And around three-quarters of users (77%) believe that crowdfunding is a simpler way to raise money than applying for a loan or grant.
In terms of negative perceptions, a slight majority of users (56%) believe that crowdfunding platforms contain a lot of frivolous projects. At the same time, most users don’t think these services take attention away from more-deserving charities – just 11% of users believe that this statement describes crowdfunding services well, while 68% feel it does not describe them well.
Users’ views on the merits of crowdfunding show relatively little variation based on the demographic characteristics of donors, although there are some differences in the attitudes of younger and older donors. Compared with older users, crowdfunding donors under the age of 50 are more likely to feel that these services contain lots of frivolous projects (60% vs. 46%), but also to feel that they are a simpler way to raise money than applying for a grant or loan (80% vs. 70%).
By the same token, crowdfunding users tend to have similar views about these services regardless of the quantity or level of their donations. However, users who have donated more than $100 to an individual project are especially likely to indicate that these services are a good way to highlight lesser-known causes or businesses – 94% of these donors believe this statement describes these services well. For other news related to why this and other forms of funding have become so popular and how they’re being used make sure to check our business news section.
The share of Americans who created a fundraising project of their own using a crowdfunding platform is relatively small, with 3% saying they have done so. Many of these project creators are themselves donors to other projects; fully 72% of these project creators have made their own contributions to other people’s projects (looked at a different way, 10% of crowdfunding donors have also created a project of their own).
In addition to asking whether they had created a project of their own, the survey also asked respondents to describe a specific project they had created. A selection of their responses is included below.
Many responses mentioned starting a project in order to pay for medical, veterinary or other personal expenses (either for themselves or for someone else). In a number of instances these projects were designed to appeal to a relatively small group of friends and family, rather than to a wider audience. This has been a key factor on why online giving to friends and family is the most popular type of crowdfunding
“I have to see a specialist in Florida from Maryland. There were expensive tests that I had to pay out of pocket, traveling expenses and 10 days’ hotel costs. Yes, I met my goal. Support was mostly from family & friends.”
“I held a fundraiser for a friend who was diagnosed with stage 4 cancer. We raised over $5,000 in one month. We exceeded our goal.”
“Found a stray puppy with a broken hip that needed surgery. The goal was to raise enough money to get the puppy the surgery. And yes, thankfully raised enough money, I got the puppy the surgery and found her a wonderful home to live in!”
Others were more professional or quasi-professional in nature:
“My band raised money to record an album, with varying rewards for donors. We did meet our goal, and it was great!”
“It was to benefit a feminist conference organized by a volunteer collective. We raised several thousand dollars. It was successful.”
“To fund a business startup idea based out of a college project. We were fully funded and ran the business for the semester.”
Some noted that even though they didn’t meet their initial goal, they still thought of the experience as a positive one:
“I am a foster parent and was raising money for a larger vehicle to support our family. I did not meet the goal but did get quite a bit of money. Around $3,000.”
“I raised $5,000 for the earthquake victims of Nepal. No, I did not reach my goal but was able to provide money to five different ministries including an orphanage.”
“The goal was to fund a summer intensive for my daughter. It was a good way to get exposure but for the most part it was family who contributed, and we didn’t completely meet our goal. We came close enough though and did much better than when we held fundraisers locally where there was a lot of labor and expense going in with a less than stellar payoff. If I were to do it again, I think I’d want to not just ask for money but have the ability to give something back to the donors for helping us (some kind of reciprocity) … it may have created happier donors and made me feel like I did something tangible to say thank you.”
Since online giving to friends and family is the most popular type of crowdfunding you can make use of platforms like YouHelp which is a crowdfunding platform that can help you raise money for a cause or project. If you’d like to read more content on crowdfunding, fundraising, or grants for nonprofits and businesses, check out GrantWatch.
Featured Photo by Gavin Whitner