Crowdfunding Goes Private: How People Are Bankrolling Their Personal Lives

Colleen Oakley
Posted

A Hand Up or a Handout?

Most people cringe at the thought of asking for financial support, and tend to proceed with caution when asking friends or family for money—even for worthy causes. So what makes doing it online so much more acceptable?

“It’s a lot less uncomfortable to ask someone to check out your campaign than to put your hand out,” says Wyman. “And for life events, such as a wedding, look at it this way: It’s similar to registering for gifts at a store, except now the couple can ‘register’ for something that’s more meaningful than china. And unlike just giving cash, guests know that their contributions are going toward a couple’s real goal.”

“People just want to help others. It’s a strong emotion that drives the crowdfunding industry as a whole.”

According to Sperling, crowdfunding isn’t just benefiting those raising the funds, either—it’s giving everyone a chance to give back. “Sometimes people just want to help others,” she says. “It’s a strong emotion that drives the crowdfunding industry as a whole.”

RELATED: How to Budget for Giving All Year Long

Crowdfunding 101: A Primer for Success

Before you jump on a crowdfunding bandwagon yourself, Wyman says that there are a few things you should know when it comes to creating a good campaign:

1. Set a Realistic Financial Goal. If potential contributors don’t think that you’ll be able to reach your goal, they’ll think twice about contributing to your campaign.

2. Craft a Smart Elevator Pitch. You should be able to explain your cause in two to three concise sentences. And before you share that pitch with potential donors, practice it on your friends and family.

3. Be Your Best Marketing Team. Tell everyone you know that you’ve launched a campaign, and invite them to visit. And be sure to consistently update the campaign, so there’s a reason for people to keep on visiting your site.

  • LaJacqueReal

    This is phenomenal advice and great food for thought. Here is a realistic solution to the help we so desperately need as young professionals in this country. Thanks so much for the great info LearnVest!

  • Coffee123

    This article seems to ignore the fact that this young woman took out $200,000 in student loans for her undergraduate degree. Learnvest should feature an article exploring why in the world she made such a poor financial decision.

    • Kelli

      Hi, Coffee123, Kelli here. Unfortunately, LearnVest (and accessible personal finance advice in general) weren’t as readily available to me at the time – or perhaps I was just young and idealistic and would have ignored it anyway. I made poor choices but have luckily come out much better for it, and much more financially aware, in the end. Now I hope to help others who might be in similarly difficult circumstances.

      • LeeLee

        While the information was available at the time, it’s probably true that most college freshmen don’t consider this before signing all those loans. It’s very sad that so many 18 year olds sign their life away without fully realizing the ramifications.

        That being said, I love the idea of your charity crowd sourcing. It’s a great idea with so much merit. To me, it says, “I’m not looking for a hand out. I just want my hard work to pay off, and wouldn’t it be nice if it helped others in the process?” When I tried to go through the website, it doesn’t look like there’s a way for me to donate, though. Am I missing something?

  • Orly

    Crowdfunding is great, but not a magical solution. Running a crowdfunding campaign is a lot of work. It’s not as easy as posting your story on the web and hoping sympathetic souls will donate. Anyone who wants to run a campaign to cover loans, debts, or bills really needs to work on how to best present themselves and their situation, how to share their campaign, and the types of perks that both strangers and their community would be interested in receiving. The last bit of this article, the “crowdfunding 101″ section, is helpful, but really just the tip of the iceberg in terms of how to make your campaign successful. Take the time to read over all of the insights and tips and guides you can find (Indiegogo has some great ones, but I’m biased because I work there) before launching your campaign. Also look over successful campaigns similar to yours, and don’t be afraid to copy that campaign’s tactics in order to make yourself successful. And good luck!

  • Aymee B

    I think this a great idea.. I’m surprised I had not heard at all of “crowdfunding” before this article. I come from a family that did not teach me anything about being financially stable. Now after a divorce and career change in later life, it is just as hard to recover as it is for a college graduate starting a new career. Harder at times actually because a lot of employers would prefer college grads to someone of my age/experience. I personally don’t have much family and not too much support emotionally or financially. I think even though campaigning is somewhat difficult (which in my opinion should be part of this process) it’s a way for people like me to get back on track, develop new and better financial skills and to also give back after they have been given to. It really does seem like it promotes a great sense of community – if used appropriately. I never want to just ask for a hand-out, but right now I could use a hand-up. :) It’s a great idea I plan to pursue… Thanks for the article!

  • Tania

    A part of me likes this idea and another part of me cringes. While you would have authenthic campaigns/causes, it’s also ripe for fraud. I already see so much questionable calls for donations and sympathy (including possible munchausen syndrome) on every social media platform I’m on including resale marketplaces. While I have personally raised money through events and community rummage sales for a friend sick with cancer or for documentarians/artists who need funds to complete an interesting project, I don’t think I’d do the same for someone with debt. It just doesn’t sit right with me. As far as education goes, I would rather contribute to a scholarship fund than an individual marketing themselves because I’d feel uncomfortable with the lack on controls to ensure the money is used as intended. Also if you give money to an individual as a gift, it will be taxable to the recipient and not deductible to the donor, a donation to a eligible NFP scholarship fund is deductible and exempt. If the crowdsourcing for personal reasons becomes a thing, I do suspect it will create a whole other venue for cons/frauds (not saying that everyone who participates are defrauding anyone).

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