Crowdfunding is a process in which individuals or groups pool money and other resources to fund projects initiated by other people or organizations "without standard financial intermediaries.
"[1] Crowdfunded projects may include creative works, products, nonprofit organizations, supporting entrepreneurship, businesses, or donations for a specific purpose (e.g., to pay for a medical procedure).
Crowdfunding usually takes place via an online portal that handles the financial transactions involved and may also provide services such as media hosting, social networking, and facilitating contact with contributors.
"[1] An individual or organization may not qualify for a traditional bank loan, and crowdfunding provides another opportunity to gain financial support from others.
"[2] Those unable to procure funding from traditional methods may be interested in pursuing crowdfunding as an option; however, the success rate may be a deterrent.
[3] This type of crowdfunding "is part of a trend in which people are relying less on charities to help them fulfill their philanthropic aims".
[7] Another important factor is that online donors are not limited by their geographic location and can give to individuals or organizations anywhere in the world.
Once a fundraiser is created, individuals can share the details anywhere to attract donors and gather funds for their cause.When it comes to motives, donations are made to individuals to help them reach a goal and typically drop off once that is met; however, donations to organizations are made for a greater societal good.
"[8] This is important for online campaign organizers to note as they determine their target audience; however, those over 50 have increased their social media usage and have a presence on Facebook.
There are benefits to online crowdfunding as it has the ability to tap into audiences that are not close in geographic proximity to an individual or organization and to increase awareness about a campaign.