Social Impact Fundraising/Crowdfunding Sites
Most global crowdfunding sites have employed different vetting processes to ensure the selected projects comply with their policies. Kickstarter, for instance, has a vetting criterion that allows specific types of projects on its site, while Indiegogo has a less stringent vetting process and is open for all prospective project creators.
How Crowdfunding Sites Decide if Organizations/Programs are Qualified for Inclusion
- Most crowdfunding sites perform rigorous due diligence on programs before they are launched to ensure they align with their standards and policies. Some sites like GlobalGiving require every organization to present its financial records, legal documents, and list of board members and senior staff. Others like GoFundMe require organizations to provide details that describe who they are, the beneficiary of the funds, their relationship with the beneficiary, how funds will be spent, and how the beneficiary will receive the funds.
Vetting Process(es) and Criteria Used
- Some sites are open for all prospective project creators, while others accept projects that are within specified categories. For instance, Indiegogo features projects in several categories, including film, environment, technology, animal, politics, sports, religion, and health. Kickstarter allows projects that are in the following categories only; "art, comics, crafts, dance, design, fashion, film & video, food, games, journalism, music, photography, publishing, technology, and theater."
- Projects must be honest and clearly presented. The vetting process also includes evaluating organizations' ability to communicate about their work, and their capacity to implement activities. They must also comply with international regulations for philanthropy and anti-terror guidelines. Furthermore, a background check is performed on every organization/program to determine its relationship with previous funders.
- Once accepted in the crowdsourcing community, the organizations are required to present their projects’ quarterly reports. The reports are then emailed to donors and published on their pages so that supporters can see how their donations have been used. When vetting for renewal, platforms like GlobalGiving send representatives to visit every organization.
The Success of their Approaches
- More than $34 billion has been raised via crowdfunding globally, with Kickstarter leading with the most completed projects.
- Over $5billion has been pledged on the Kickstarter platform to date. On Indiegogo, about 250 projects have raised $100,000, while over $1 million has been raised by about 30 projects. Over $9 billion has been raised on GoFundMe since its inception in 2010. The Good Exchange has raised over £17 million.
Limitations of these Approaches
- Some sites like Kickstarter charge a somewhat hefty payment processing fee and they take a long time to approve projects. Projects that fail to adhere to their "all for nothing funding" model do not receive any funds at the end of the crowdfunding campaigning period.
- Although Kickstarter is open to backers from across the globe, project creation is limited to selected countries. It also prohibits charitable and political fundraising and does not allow organizations to offer equity. Other sites like Indiegogo are limited to one-time projects.
To What Degree do Leading Social Impact Fundraising/Crowdfunding and Discovery Sites Present Large Pools of Organizations versus Highly-Vetted, Curated Pools?
- Social impact fundraising/crowdfunding sites present organizations differently. Sites like GoFundMe, GlobalGiving, The Good Exchange, have listed lots of organizations.
- GiveWell presents a smaller number of organizations that have been carefully vetted and analyzed. Charity Navigator has also presented the top ten list of organizations in each category with perfect scores. Benevity and GuideStar have also presented top brands that are using the platforms.
How Leading Crowdfunding Sites Approach Their Follow Up Communication with Individual Donors
Types of Information Typically Communicated by the Beneficiary Organization
- Most crowdfunding sites, including GoFundMe, Indiegogo, Good Exchange, Benevity, and Patreon have published the beneficiaries' fundraising stories and feedback.
How Communication Differs According to Donation Frequency and Donation Level
- After a thorough search through several leading sites like GoFundMe, The Good Exchange, Rockethub, Global Giving, Benevity, and Guidestar, the research team did not uncover any information that shows how communication by beneficiary organizations varies by donation Level or donation frequency. GoFundMe, for instance, has published several projects with different donation levels, including those that have met their goals, exceeded their goals, or are below their targets.
- The research team also addressed this section from the donor's perspective as well because of the phrase. Following this, the research team searched through articles, blogs, and press releases of crowdfunding sites such as GoFundMe, Kickstarter, Indiegogo, Good Exchange, Charity Navigator, Global Giving, Benevity, and Guidestar, and was unable to find any information on how donors communicate based on donation frequency. Also, by sampling different fundraising pages, we discovered no comments or communication made by the crowdfunding companies to any individual donor. As such, we are unable to present a comparison based on the amount donated.