Money Makes the World Go Round
Editor’s Note: Originally written in 2017 most of these tools are still good choices. I have, however, updated the cost information and added a few new ones.
It wasn’t all that long ago, that if you wanted to start a business you needed a loan or an investor to fund your idea. If you wanted to raise money for your charity, you knocked on doors, sold cookies, made individual phone calls, and sent direct mail. Then on September 4, 1966, Jerry Lewis simultaneously reached out to people all over the country through the magic of television. The first coast to coast broadcast of the 20+ hour Muscular Dystrophy Campaign was one of the first national “crowd funding campaigns.”
And it worked, raising more than $2.45 billion (yes, that is billion with a “B”) over the 40+ years the program ran. Many of the donations were small, people gave what they could. But when millions of people each give $5, $10, or $50 it adds up. Today, it is easier than ever to “crowd fund” for your new business, political campaign, or charity with an explosion of tools available to help you do just that.
But all these tools are not the same. So which one should you choose to fund your next project? It depends on your objectives, but as you evaluate different tools here a few questions to ask before signing on the dotted line.
- Is there a monthly fee?
- What is the transaction fee? Is that added to the credit card processing fee or in addition to the site fee?
- How easy is it to set up the payment gateway?
- Can I embed the tool into my existing website?
- Does it integrate with my CRM?
- Are there dashboards and reports?
With those questions in mind, let’s look at some of the most popular non-profit fundraising tools and crowd funding for small business options.
Online Donation Tools
Whether you are raising money for an official 501c3 organization, or a school trip, or even your wedding, Fundly can help. What I really like about this product is the amazing integration with Facebook.
The pricing model is also extremely straightforward. Fundly will deduct a 4.9% fee from each donation that you receive. A small credit card processing fee of 2.9% + $.30 will also be deducted from each donation. This is higher than some of the other products available, but there are no setup fees, no monthly fees, and no contracts so you only pay when you actually raise money.
Another strong, peer to peer fundraising tool is QGiv. This is an ideal tool for a more established non-profit with on going fundraising needs. The donation page building tool creates a more polished and professional presentation. The drag and drop editor allows you to create a much more informative and robust online presence. And the reporting tools provide real time insights into who donated and when.
They have updated their pricing model eliminating the monthly subscription fee of $49 per month. The transaction fee is less than Fundly, 3.95% + $0.30 per transaction. The merchant fees are included in this pricing model.
They have also added some amazing enhancements which make this an interesting choice for groups with ongoing needs. There are text-to-donate, advanced CRM with donor summary information which allow you to build smart ongoing campaigns.
If your objective is to collect donations on the spot using mobile devices, @Pay is a great choice. With this tool you can create donate now buttons to be included in an email or on your website, allowing people to donate with just a few clicks. And once your donors have the @Pay account, they can use it again and again. There is also a really slick text to pay option which can be a powerful way to raise funds during events.
You have to have a website or email campaign to embed this into, but if you do the pricing is very reasonable with pricing starting at 2.9% + $0.30 per transaction processing fee.
Online Crowdfunding Tools
Shifting away from nonprofits, what if you have a great idea for a product or a business? Well, there are funding tools for you too.
Just as Kleenex has become synonymous with tissue and Q-tips is the name for all cotton swaps, Kickstarter is often used for any online fundraising tool. It is often used by creative individuals hoping to self-fund the recording of their latest album, or the printing of a new book. It is also popular among inventors hoping to raise funds to pay for a prototype to present to investors; inventions like a personal single-wheel vehicle or a pocket-sized solar charger. It’s not really for buying equipment or helping a nonprofit, and you don’t get to keep your money unless you reach your goal through financial pledges.
In addition to promoting your Kickstarter yourself, you can get additional exposure in their online directory. This platform is really designed to help you decide if your project is worth taking forward. That is why they have an “all or nothing” funding model. You set a goal and you don’t get to keep your money unless you reach your goal through financial pledges. That way you don’t end up with half the money and no way to go forward with the project.
And you don’t pay anything to use the tool or solicit funds if your project doesn’t go forward. If it does, Kickstarter is a little more expensive. They take 5% of your total funds raised. On top of that there are payment processing fees of 3% + $0.20 per pledge. Pledges under $10 have a discounted micro-pledge fee of 5% + $0.05 per pledge. You are looking at a total of 8 – 10% of your fundraising going to the platform.
Similar to Kickstarter, Indiegogo has a directory of all the active offers on their platform. The pricing is similar with 5% platform fees and 3% + $.30 per pledge transaction fees. The big difference is the flexibility with two options. Fixed or Flexible Funding.
- Fixed funding is similar to the Kickstarter approach where all contributions are returned if you don’t meet your goal.
- Flexible Funding allows you to keep all the contributions even if you don’t meet your campaign goal. If some funds are better than no funds Flexible Funding is a great fit.
They also have a platform where they present your ideas to potential investors, helping you reach a wider audience.
Looking for Cash
The money is out there. With these online crowdfunding tools you have an easy way to find it. This list is just the tip of the iceberg and new tools are being created all the time. So dive in, do a little investigation on your own and select the perfect online funding tool to meet your needs.
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