Crowdfunding is the process of raising funds for a specific project from a large number of individuals via an online platform. Many different types of crowdfunding exist, including equity, rewards-based, or lending crowdfunding for business ventures and social enterprises. However, most nonprofit organizations rely on donation-based crowdfunding in which individuals contribute funds for social impact projects without expecting any tangible benefit in return.
Crowdfunding is not new. Nonprofits have used crowdfunding for decades—many telethons, special annual fund programs, or other outreach campaigns are fueled by small donations from a large number of individuals. What is new, however, is the way in which digital technology and communications can be harnessed by organizations to engage with supporters, make their case, and use networks to continue to spread the word. Today’s crowdfunding makes the most of enriched digital communication and taps into the power of social connections.
In response to these opportunities, recent years have seen a proliferation of online platforms offering individuals, nonprofits, businesses, and all types of organizations the ability to crowdfund online. The model is similar—the user uploads information about their project online and spreads the word, and donors visit the project and can donate online with their credit card. Once the campaign period is over, the platform transfers the funds raised to the organization, normally retaining a small commission and/or payment processing fee.
HIPGive joins the group of crowdfunding platforms but brings a unique focus—we enable Latino-serving nonprofits to crowdfund on a bilingual, bicultural platform that makes it easy for donors to give to projects throughout the U.S. and Latin America.