What it is
Crowdfunding is the practice of gathering small and medium contributions from a large group of people, usually online, to support a purpose. That purpose might be a personal need, a community project, a creative work, a small business idea, or a cause you care about. Instead of asking one source for everything, you share your story with many supporters.
There are several common types. Donation-based crowdfunding asks people to give without expecting anything back. Rewards-based crowdfunding offers a thank-you item or experience. Equity crowdfunding is different: it involves selling securities to investors, and it is regulated. Each type has its own rules, expectations and risks.
Most campaigns share a few basics: a clear goal, a truthful story, a way to receive payments, and a plan to tell people about it. Platforms generally have their own terms of service, fee structures and payout policies, so it is wise to read them carefully before you begin.
How it’s traditionally been approached
Long before the internet, communities pooled resources in familiar ways: passing the hat, church benefit dinners, neighborhood barn raisings, bake sales, car washes and mailed appeals. The idea that many hands can lighten a load is very old, and it fits naturally with values of neighborliness and mutual support.
Online tools changed how far a message can travel. Today, people often share a campaign page by text, email and social media, and supporters can give in minutes from anywhere. Many people still pair online efforts with in-person gatherings and word of mouth.
Traditionally, organizers have handled everything themselves: writing the story, choosing a goal, making a video, and updating supporters. Others have sought outside help, such as a planner, writer or video producer. Neither path is wrong; the right fit depends on your comfort, time and the kind of campaign.
How the right fundraising pro may help
The right fundraising pro may help you think through the basics before you launch: what you are raising money for, who might care, what a realistic plan looks like, and how to describe your need honestly. A campaign strategy and planning provider may help you organize your goals, timeline and outreach so that you feel prepared. No one can promise a campaign will succeed, but planning may help you avoid common missteps.
A story, copy and campaign video provider may help you put your message into clear, genuine words and images. A first conversation is generally a chance to share your situation, ask how they work, and see examples of their past work. They may also help you present your story in a way that is specific, respectful and true to your voice.
Good questions to ask any provider include: What is your experience with campaigns like mine? What will you do and what will I be responsible for? How do you communicate and how often? How do you handle platform terms and payout rules? How are you paid, and is everything in writing? Be cautious of anyone who guarantees results. For tax, legal or securities questions, ask a qualified professional.
The bigger picture
Asking for help can feel vulnerable, especially when the reason is personal or financial. Many people feel stress, pride or worry about how they will be seen. It can help to remember that inviting a community to support something meaningful is a long-standing tradition, and that your wellbeing matters as much as the goal.
Think about your whole life as you decide: your finances, your family, your time and your peace of mind. A campaign takes ongoing energy for updates and thank-yous, so pace yourself and lean on trusted people. If money stress is weighing on your overall wellbeing, Providers.plus may be a resource to explore, and if you ever feel in crisis, the 988 Lifeline is available.
Keep in mind
- Be truthful and specific. Use funds only as you describe them, because misusing donations can be considered fraud.
- Whether money raised is taxable or deductible depends on the facts, so ask a tax professional before you launch.
- Equity crowdfunding must go through an SEC-registered funding portal or broker-dealer. Investing is risky and illiquid, and rules and limits change, so check with the SEC and a securities attorney.
- Read each platform's terms of service, fees and payout policies, and follow them. Nothing here is legal, tax, accounting or investment advice, and no campaign is guaranteed to succeed.
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 in simple terms?
Crowdfunding is raising money by asking many people to each contribute toward a shared goal, usually through an online page. The goal might be personal, creative, business-related or community-focused. Supporters give because they care about the person or purpose.
How does crowdfunding work?
Generally, an organizer creates a campaign page with a goal and a story, then shares it with their network. Supporters contribute online, and the platform processes payments under its own terms. Payout timing, fees and rules vary, so read the terms before you start.
What are the main types of crowdfunding?
The common types are donation-based, rewards-based and equity crowdfunding. Donation and rewards campaigns ask for gifts or offer a thank-you item. Equity crowdfunding involves securities and is regulated, so it must go through an SEC-registered funding portal or broker-dealer.
Is crowdfunding safe?
Crowdfunding carries risks for both organizers and supporters, so it helps to be careful. Organizers should be truthful and use funds as described, and supporters should give only to people and causes they trust. Equity crowdfunding is risky and illiquid, and investors may lose money.
Is money raised through crowdfunding taxable?
It depends on the facts of your situation, including the type of campaign and how the money is used. Because tax treatment can vary, it is best to ask a qualified tax professional. This page cannot tell you how your funds will be treated.
Can a fundraising pro help with my campaign?
A fundraising pro may help with planning, storytelling, writing or video, but they cannot guarantee results. Ask about their experience, scope, communication and how they are paid. When you are ready, you can start a fundraiser on 2a.support.
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.