Contributing money to a crowd funding project can be a great way of showing your support for a creative, social or business initiative you believe has merit. However, you need to do some research to ensure your money is being used for a legitimate project. Here are some things to consider before you decide to get involved.
Crowd funding is used by artists and entrepreneurs to find money to fund their projects. Money is usually raised through a crowd funding website. The website enables people who are not professional financiers to pool their money towards a project.
Most crowd funding websites will have information on the project's aims and objectives, how it will work and its budget. Crowd source funding websites can be based in Australia or overseas. The projects they fund are usually creative, business or social initiatives with relatively small budgets.
Crowd funding projects are usually promoted using social media and word-of-mouth. Often project sponsors are friends and family, or people easily contacted through existing networks. However, anyone can pledge money to the project via the website and some get world-wide support from complete strangers.
There is no monetary reward for supporting a project and sponsors are often enticed with a small gift such as a signed CD, a free T-shirt or a discount on products in return for their support.
In most cases, only projects that raise enough money can go ahead. Most, but not all sites return funds if the target amount is not reached.
Crowd source funding websites make money through a levy on the total funds received for the campaign. Often the levy is only deducted if the campaign goes ahead.
If you want to participate in crowd source funding you'll need to:
Once the project has reached it's target funding, the money you've pledged will be deducted from your account.
Most crowd funding websites do not have Deductible Gift Recipient (DGR) status so you will not be able to claim a tax deduction for the money you pledge.
However, the project creator may have DGR status. If so, it is up to them to provide you with a tax deductible receipt if you request one.
You cannot claim a tax deduction if you have received a gift, reward or discount.
Raising money for a crowd funding project relies heavily on trust.
Even if there's a small gift involved, the main motivation for sponsoring a project is usually because you have an interest in the project and a desire to see it succeed.
If you've heard about a crowd source funding project that you'd like to support make sure you check the legitimacy of any website or social media page you're directed to. Remember to carefully read the terms and conditions on the crowd funding site before signing up.
You should also try to find out as much information as you can about the project and its owner before you sponsor them. For example:
Don't give your credit card details unless you're comfortable that the website, the project and its owners are legitimate.
Visit our credit card scams page to find out what to do if you think your credit card details have been compromised or you think you've been scammed.
Supporting a project you really believe in can be a rewarding experience but you need to be careful someone isn't taking advantage of your generosity.
Last updated: 07 Aug 2016
See the article here:
Crowd funding | ASIC's MoneySmart
- This 13-year-old from Bengaluru is crowd funding to set up refrigerators for the poor - EdexLive - August 6th, 2020
- State to match crowdfunding money raised to help restaurant recovery from pandemic - FOX 2 Detroit - June 17th, 2020
- Impact of COVID-19 Outbreak on Global Crowd Funding Market 2020 Industry Size, Advancement Strategy, Top Players, SWOT Analysis and 2025 Forecasts -... - June 17th, 2020
- Funding defamation and privacy proceedings - are there still options? - Lexology - June 17th, 2020
- Wallingford RFC raise money to replace kit after it was stolen by thieves - Oxford Mail - June 17th, 2020
- How Crowdfunding platforms help businesses cushion the effects of the COVID-19 crisis - Born2Invest - June 8th, 2020
- Impact of COVID-19 on Crowd Funding 2020 by Manufacturers, Regions, Type and Application, Forecast to 2026 - Cole of Duty - May 29th, 2020
- Milagrow ventures into crowdfunding with launch of massaging robot Wheeme 2020 - Economic Times - May 25th, 2020
- Hotel resorts to crowd funding to stay afloat - Daily Business - April 21st, 2020
- Global Crowd Funding Market: Which companies will have a strong foothold? - Feed Road - March 2nd, 2020
- Crowd Funding Market to Witness Slow Growth Owing to Unfavorable Government Policies in 2016 2022 - Redhill Local Councillors - February 16th, 2020
- How the sands have shifted on Awaroa, 'New Zealand's beach' - Stuff.co.nz - February 16th, 2020
- Online crowdfunding platform market was estimated to be US$ 456.51 Mn in 2018 and is expected to reach US$ 752.56 Mn by 2027 growing at a CAGR of 5.2%... - February 14th, 2020
- Online Crowdfunding Platform Market Estimated to be US$ 456.51 Mn in 2018 and is Expected to Reach US$ 752.56 Mn by 2027 Growing at a CAGR of 5.2%... - February 1st, 2020
- Crowdfunding platforms probably wont replace investment banks, but they will shake things up a bit - Stockhead - February 1st, 2020
- Hundreds of Canadian transplant patients crowd fund to cover costs, study says - National Post - January 12th, 2020
- Now, BBMP looking at CSR to rejuvenate lakes - The Hindu - December 21st, 2019
- Crowd funding initiative for government school - The Hindu - December 10th, 2019
- EXCLUSIVE: Intergreatme's over R32m crowdfund - reduced to R6m after 'suspect pledges' - Ventureburn - December 10th, 2019
- Crowd Funding Market 2025: Topmost manufacturers With Size, Regions, Types, Major Drivers, Profits - BoundWatch - December 10th, 2019
- Crowd Funding Size, Growth, Analysis Of Key- players Types And Application, Outlook 2025 - 101Newsindustry - December 7th, 2019
- Parents of Beatriz Farmer-Maia raise over 30000 to fund her treatment to beat childhood cancer - Islington Gazette - November 19th, 2019
- How to Crowdfund (with Pictures) - wikiHow - June 7th, 2018
- Property Crowd Funding - The Magic of Modern Day Investing - HuffPost - September 4th, 2017
- Getting Crowdfunding Fundamentals Down to A Science In Advance Of Campaign Key To Success - HuffPost - August 28th, 2017
- Dreamhost Crowd-Funding Legal Action Against DOJ - eWeek - August 22nd, 2017
- Buy a share in a brewery: Pozible launches equity crowd-funding site Birchal - The Sydney Morning Herald - August 1st, 2017
- Woman who contracted E.Coli returns home from Turkey after crowd funding appeal - Glasgow Live - July 9th, 2017
- Africa's first impact-focused equity crowd funding portal founder ... - CNBCAfrica.com - July 5th, 2017
- Crowd funding campaign to save a two-year-old kid - Times of India - July 2nd, 2017
- Arrowtown musician Holly Arrowsmith crowd funding new album - The Southland Times - June 26th, 2017
- Ex-Googler Lina Gantar launches crowd funding agency in Manchester - Manchester Evening News - June 25th, 2017
- Crowd funding could be used to buy the long-vacant Bell Building downtown - Wyoming Tribune - June 24th, 2017
- Wyo. Sec of State unveils new crowdfunding platform - Wyoming Business Report - June 16th, 2017
- Wyo. Sect'y of State unveils new crowdfunding platform - Wyoming Business Report - June 14th, 2017
- Where is the crowd-funding for the destitute? - News24 - June 9th, 2017
- Florida education news: #HB7069, teacher diversity, crowd funding and more - Tampabay.com (blog) - June 5th, 2017
- BBB Has Advice Before You Contribute To A Crowd Funding Site - Newstalkkgvo - June 2nd, 2017
- Catapooolt all set to Catapult Crowdfunding in India with an Asian Record - Bizztor (press release) (blog) - May 19th, 2017
- Should you invest in Bitcoins, crowd funding, P2P lending? - Economic Times - May 15th, 2017
- Cork Foundation's Live Crowd Funding event - The Avondhu Press (press release) - May 6th, 2017
- Will crowdfunding get a synthetic biology win? - PLoS Blogs (blog) - May 3rd, 2017
- Impact Guru, GlobalGiving tie-up to scale crowd funding in India - Daily News & Analysis - May 2nd, 2017
- Plastc Card Is Cancelled: The Dangers Of Crowd Funding Tech - Forbes - April 29th, 2017
- Can crowd funding help scale up solar power for Africa's poor? - The Standard (press release) - April 25th, 2017
- Donate safely: Avoiding crowd funding scams - KXLY Spokane - April 20th, 2017
- Maharashtra schools raise Rs 216 crore via crowd funding - The Indian Express - April 18th, 2017
- Crowdfunding: affordable bee surveillance for hive health - Scoop.co.nz (press release) - March 29th, 2017
- Crowd funding: SECP warns of false scheme - The Express Tribune - March 28th, 2017
- Arsenal fan plots sensational crowdfunding campaign to BUY the club from owner Stan Kroenke - The Sun - March 23rd, 2017
- How to make crowdfunding work for you - Buffalo Business First - February 13th, 2017
- Crowd Funding - October 23rd, 2015
- Crowdfunding - P2P Foundation - October 23rd, 2015
- Comparison of crowdfunding services - Wikipedia, the free ... - September 5th, 2015
- Fundraising Script,Crowd Funding Script,Crowdfunding ... - August 14th, 2015
- The Life Chest: Crowd Funding Video - Video - May 5th, 2015
- THIS TOKYO #FASHION BRAND GIFT CLOTHING & ACCESSORIES SURPRISE! #THIStm - Video - May 4th, 2015
- THIS LOVE #FASHION BRAND GIFT CLOTHING & ACCESSORIES SURPRISE! #THIStm - Video - May 4th, 2015
- THIS PSYCHIC #FASHION BRAND GIFT CLOTHING & ACCESSORIES SURPRISE! #THIStm - Video - May 4th, 2015
- THIS SUPER #FASHION BRAND GIFT CLOTHING & ACCESSORIES SURPRISE! #THIStm - Video - May 4th, 2015
- THIS ROADHOUSE #FASHION BRAND GIFT CLOTHING & ACCESSORIES SURPRISE! #THIStm - Video - May 4th, 2015
- THIS BEYOND #FASHION BRAND GIFT CLOTHING & ACCESSORIES SURPRISE! #THIStm - Video - May 4th, 2015
- THIS HEARTBREAKER #FASHION BRAND GIFT CLOTHING & ACCESSORIES SURPRISE! #THIStm - Video - May 4th, 2015
- THIS WWW #FASHION BRAND GIFT CLOTHING & ACCESSORIES SURPRISE! #THIStm - Video - May 4th, 2015
- THIS GENUINE #FASHION BRAND GIFT CLOTHING & ACCESSORIES SURPRISE! #THIStm - Video - May 4th, 2015
- True Colours Crowd funding Campaign - Video - May 4th, 2015
- THIS NEW YORK 2015 #FASHION BRAND GIFT CLOTHING & ACCESSORIES SURPRISE! #THIStm - Video - May 4th, 2015
- Armitage Dinosaur - crowd-funding video - Video - May 3rd, 2015
- Who benefits from crowd funding? - Video - May 3rd, 2015
- The Man Who Found His Freedom - Video - May 3rd, 2015
- Crowd Funding proof V1 - Video - May 3rd, 2015
- TEN FOOT TONE - New CD - TASTE GOOD - Video - May 3rd, 2015
- One Spark/Tamarin Fruits - Video - May 1st, 2015
- Crowd Funding Video- BROKEN ROAD (Short Film) - Video - April 30th, 2015
- Crowd Funding video San Jose Bike Clinic - Video - April 28th, 2015
- Domestic Violence & Abuse Help Break the Cycle - Seed the Books Crowd Funding Campaign - Video - April 28th, 2015
- LEARN IT | BUILD IT | MANAGE IT: FINANCING - Crowd Funding - Video - April 27th, 2015
- Crowd Funding- Habitat for Humanity Charity Trip to Cebu in June 2015 - Video - April 27th, 2015
- Annalakshmi on the swan Crowd funding 14 04 15 WM - Video - April 26th, 2015
- Beat Buddy Inside Story - Video - April 26th, 2015