What Is Crowdfunding?

Crowdfunding harnesses the power of social networks and the internet to give people the means to raise funds, help others overcome hardship and meet aspirational goals. With crowdfunding, you can help a friend or an entire community. You can do anything from paying for your own operation to fulfilling a student’s dream of going to university – and so much more.

If you’ve ever found yourself wondering, “What exactly is crowdfunding?” or “What are the benefits of crowdfunding?”, then read on! We’ll answer your questions about crowdfunding and give you tips on how to bring in donations.

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What is crowdfunding? Everything you need to know

The rise of crowdfunding

In recent years, crowdfunding has transformed the traditional fundraising landscape. It has bridged the gap between those in need and those available to help them, making it possible for people to offer direct support to those who need emergency financial assistance. This is all part of the bigger trend of individual giving. In 2020, the sixth annual Australian Communities report found that 82% of Aussies were in the habit of donating to causes they cared about.

People often turn to crowdfunding when they can’t afford unexpected veterinary bills for their beloved pets, need to get a loved one home from abroad quickly, want to stop iconic venues from foreclosing or need help dealing with a frightening medical diagnosis. Some sobering facts about the way Australians handle financial emergencies: 

  • The average household savings rate is under 3%, according to a “financial comfort” study by ME Bank
  • A quarter of Aussie families have less than $1,000 in savings to cover the unexpected
  • One in eight families were in even more dire straights – unable to cough up as little as $100 if needed

Add in the devastating economic impacts of COVID-19 on millions of Aussie workers and small businesses, and it’s no surprise that crowdfunding is increasingly used as a means to help folk get back on their feet.

What are the advantages of crowdfunding?

When funding from the government and charities falls short, crowdfunding can be a lifesaver. Online fundraising removes the traditional barriers that typically exist when asking for support, making it simple to overcome financial obstacles quickly or raise money for a worthy cause. Here are some of the main advantages of crowdfunding:

  • There is no application process
  • You don’t have to wait for ages to receive your funds
  • crowdfunding sites don’t charge a sign-up fee and don’t charge a platform fee, which means that you get to keep more of what you raise
  • Crowdfunding takes the fear out of asking for financial help. It’s simple to share your fundraiser with your network of friends and family members on social media
  • Crowdfunding makes it easy to reach people outside of your network

Four of the most common questions about crowdfunding

  • 1. How do I know if crowdfunding is right for me?

    No cause is too big or too small for crowdfunding. Some people might worry that their fundraiser isn’t as worthy as others – but the beauty of crowdfunding is that it’s there to help all sorts of people and needs. Whether you want to help your pet, raise money to pay for a memorial or get help with bills, crowdfunding can help you to overcome the financial barriers that might be standing in your way.

  • 2. What are the different types of crowdfunding?

    Donation-based crowdfunding: This is one of the most common types of crowdfunding. In donation-based crowdfunding, people support a cause by donating to it without receiving anything in return. The person running the fundraiser isn’t obliged to pay back donors or give them anything else in return for their contributions. GoFundMe is one of the major crowdfunding sites that uses donation-based crowdfunding.

    Equity-based crowdfunding: In equity-based fundraising, the fundraising organiser accepts money from investors, typically to help launch a business. In return, investors will receive a small piece of equity in the business or company.

    Rewards-based: Through rewards-based crowdfunding, the organiser of the fundraiser offers a reward to donors, usually a service or physical item, in exchange for a contribution.

  • 3. Is it all right to raise money for myself?

    Absolutely. Thousands of people start online fundraisers every day to raise money for themselves. It’s understandable that you might be nervous about asking for money. But it’s important to remember that nearly everyone has experienced financial hardship at one point or another. You may well be surprised by the number of people who want to support you when you need it most.

  • 4. What is the best way to get more donations?

    While there’s no magic formula for receiving donations, there are definitely steps you can take to set yourself up for success. The most important thing you can do is create a compelling fundraiser and build a community that is sympathetic towards your cause. This will inspire your network of friends and family to take action. For specific tips on how you can create an engaging fundraiser and share it far and wide, read on.

What’s different about crowdfunding on GoFundMe?

GoFundMe is the No. 1 and most trusted leader in online fundraising. We empower people to rally support for personal and charitable causes. We built our reputation by serving and supporting our community of organisers and donors and we earn that trust back every day. GoFundMe’s giving community is more than 50 million strong and it’s raised over $5 billion.

How it works

Our industry-leading fundraising tools help individuals, groups and organisations share their stories far and wide. Even small donations can add up to something extraordinary.


Create your fundraiser

GoFundMe helps you to set up a fundraiser quickly and tell your story. You can raise money as an individual or invite others to join your fundraising team. Learn more about team fundraising.


Share your fundraiser

Our sharing tools help you spread the word about your story via social media, emails and text messages. We make it easy to keep your network informed so you can raise more money quickly.


Easily accept donations

GoFundMe enables you to send donations directly to your own or your beneficiary’s bank account, so you can get help straight away. Also, our platform means that you keep most of the money from each donation.

Choosing the right crowdfunding platform

More people use GoFundMe than any other platform – and they’ve raised more money than anywhere else. Here’s what makes GoFundMe stand out from the crowd:

Trust and security

Backed by the GoFundMe Guarantee, our platform is the safest and most secure place to give and receive donations. We have a dedicated Trust & Safety team that works night and day to prevent fraud and make sure that funds get into the right hands.

Advanced tools

The key to fundraising success is sharing your fundraiser with as many people as you can. With built-in social fundraising tools, GoFundMe crowdfunding makes it easy to spread awareness for your fundraiser so that you can increase donations.

Fundraising resources

Our fundraising hub offers tried-and-tested fundraising ideas and fundraising tips to help set you up for success. Our blog is packed with new content regularly to help your fundraiser attract more donations.

Crowdfunding best-practice

Tell a compelling story

From your title to your story and photos, your fundraiser should inspire people to donate. Learn how to do just that with our fundraiser story tips. And don’t forget to upload several high-quality photos and videos to maximise donations to your fundraiser.

For more tips, see these helpful blog posts:

Share and update

Every time you share your fundraiser, you’ll bring in an average of $43 in donations – so share your fundraiser often on social media and encourage others to do so too. If you build up enough momentum, your fundraiser could go viral! Well-written updates also keep supporters and potential donors engaged and in the loop.

For more tips, see these blog posts:

Thank your donors

Everyone loves being thanked after doing a good deed and it’s no different with your donors. Sending thank-you messages to each donor will make them feel appreciated. And as an added bonus, expressing gratitude can encourage additional donations and increase donor retention.

Our blog post How to Write a Donation Thank-You Letter That Gets You to Your Goal will walk you through the process of composing the best thank-you possible. Also have a look at 20 Affordable Ways to Say Thank You to Donors if you’d like to show your thanks beyond an email.

View more tips

Crowdfunding fundraiser success stories

Walt & Naima’s Winter Shelter Wish


Walt is only 7 years old but he has a huge heart. That’s why, after devastating fires swept through Northern California, he wanted to do something to help the most vulnerable people in the San Francisco Bay Area. He started a GoFundMe to help a local homeless shelter and raised over $11,000.

Support Rancho Relaxo’s Expansion


Caitlin has a simple mission: to save as many animals as possible from abuse or neglect. She does this on Rancho Relaxo, an animal rescue farm that she founded. So far, she’s saved more than 300 animals and she can continue her mission thanks to a GoFundMe that has raised over $147,000.

From Compton 2 Harvard


Growing up in Compton, E-Jayy had no shortage of obstacles. Despite the odds, this dedicated young man got accepted into Harvard, but he still needed help with all the expenses that came with an Ivy League education. Donors gave nearly $25,000 to help him in his first year at university.

View more success stories

Become our next success story

Our crowdfunding lessons help make fundraising simple. 


  1. 2020 Australian Communities Report
  2. ME Bank Financial Comfort Survey, via ABC News