What it is
Crowdfunding is the practice of gathering small contributions from many people, usually online, to support a specific purpose. Supporters often find a campaign through a link shared by friends, family, a congregation, or a community group.
There are several general kinds. Donation-based campaigns ask for gifts with nothing expected in return. Rewards-based campaigns offer a thank-you item or experience. Equity crowdfunding is a different category, where companies offer ownership stakes under securities rules.
Equity raises are regulated. Under Regulation Crowdfunding (Reg CF), they must go through an SEC-registered funding portal or broker-dealer, and investing is risky and illiquid. This page is general education only and does not offer or recommend any investment. Readers should check the SEC's website and speak with a securities attorney.
How it’s traditionally been approached
Long before the internet, communities pooled resources for shared needs: barn raisings, church benefit dinners, neighborhood collections, and passing the hat. Online crowdfunding is a newer way to do something people have always done.
Most people have approached it by choosing a platform, writing a short description, adding a photo or video, setting a goal, and sharing the link with their personal network. Many learn by trial and error, and results vary widely from one campaign to the next.
Platforms differ in their terms of service, fee structures, and payout policies, so careful readers review those details before launching. It also helps to understand that funds are generally raised for a stated purpose and should be used as described.
How the right fundraising pro may help
The right fundraising pro may help a beginner think through the basics: who the campaign is for, what the money is for, and how to explain it honestly and specifically. A campaign strategy and planning provider may help you map out a timeline and a realistic way to reach your supporters. Nothing can guarantee a campaign will succeed.
A story, copy, and campaign video provider may help you tell your story in your own voice, with clear writing and a short video that feels genuine. A first conversation is generally a chance to share your goal, ask questions, and learn how that person works.
Good questions to ask include: What experience do you have with campaigns like mine? How do you handle honesty and transparency? What will you do, and what will remain my responsibility? How are you paid, and is that in writing? Also ask who to talk to about tax questions, since a tax professional is the right person for that.
The bigger picture
Asking for help can feel vulnerable, whether you are supporting a family need, a ministry, or a small business. Many people feel more at ease when they have a clear plan, realistic expectations, and a few trusted people beside them. Taking it step by step may help protect your peace of mind.
Money worries and wellbeing are closely connected, so it helps to pace yourself and keep your family and faith community close. If you also want support for the personal side of a stressful season, Providers.plus is one place to explore. Every approach, from going it alone to getting guidance, can be a reasonable choice depending on your situation.
Keep in mind
- Be truthful and specific; misusing donations or misleading supporters can be fraud.
- Whether funds are taxable or deductible depends on the facts, so ask a tax professional.
- Read each platform's terms of service, fee details, and payout policies, and follow them.
- No one can promise a campaign will succeed, and equity crowdfunding involves risky, illiquid investments that must go through SEC-registered channels.
Not sure where to start? Answer a few gentle questions and choose who you’d like to hear from.
Start a fundraiser →Frequently asked questions
What is crowdfunding for beginners?
Crowdfunding for beginners means learning the basics of raising small amounts from many people toward a clear goal. It usually involves a campaign page, a story, a goal, and sharing with your network. Learning the terms and rules first may help you avoid common surprises.
How does crowdfunding work?
Crowdfunding generally works by publishing a campaign online that explains your purpose and goal, then sharing it so people can contribute. Each platform has its own terms, fees, and payout policies, so read them before you start. Results vary and are never guaranteed.
What are the different types of crowdfunding?
Common types include donation-based, rewards-based, and equity crowdfunding. Donation and rewards campaigns are typically about gifts or thank-you items. Equity crowdfunding involves securities and is regulated, so it is best discussed with a securities attorney.
Do I need a fundraising pro to start a campaign?
No, many people start on their own. A fundraising pro may help with planning, storytelling, or video if you want guidance, but it is optional. Ask about the scope of work and how they are paid before agreeing to anything.
Is crowdfunding money taxable?
It depends on the facts, including the type of campaign and who receives the funds. Do not assume any outcome either way. A tax professional can review your situation and explain what applies to you.
Can anyone raise equity through crowdfunding?
Equity raises are subject to securities rules, including Regulation Crowdfunding (Reg CF) in some cases, and must go through an SEC-registered funding portal or broker-dealer. Rules and limits change, so check the SEC and consult a securities attorney. Investing is risky and illiquid.
Educational resource. 2A Crowd shares general information and connects people with independent fundraising pros. It is not professional advice. Talk with a qualified professional about your own situation.