We cannot disagree with the fact that crowdfunding is becoming an increasingly popular way of fundraising. Although traditional fundraising is still prevalent, modern day crowdfunding is taking its shape in India.
What Is Crowdfunding?
In easier terms, crowdfunding is the process of funding your project by accumulating money from various individuals. Whereas, fundraising is seeking financial support for various causes or charity.
Traditional fundraising is mostly done offline. From marketing to branding and conducting the campaign, It's all done offline. Whereas the modern-day crowdfunding, thanks to the influence of the west, it's done online.
How Does crowdfunding work?
Crowdfunding in India used to be difficult in the early stages, as, at the beginning of the 2000s there were no proper online platforms you could use to create a campaign and attract the crowd towards your campaign. In 2017, crowdfunding is as easy as ABC. Anyone who has a basic knowledge about internet can leverage crowdfunding sites like Milaap and get funding for their cause.
Do keep in mind that any fundraising campaign, online or offline requires proper planning and skillful execution.
Crowdfunding can be used for almost anything, to fund your business or a startup. Crowdfunding is also used to raise money for a personal cause and to clear off your college debt.
The difference between crowdfunding and traditional fundraising:
Most often, people get confused between the concepts of crowdfunding and fundraising; Unless you spend your time like us, browsing about fundraising all day, here's the difference.
Crowdfunding is a type of fundraising. Fundraising can happen from any source; you can raise funds from a bank, a corporate or particularly a VC for your startup. But, crowdfunding comes from various individuals who believe in your cause.
Advantages of crowdfunding:
Crowdfunding doesn't know boundaries, whereas traditional fundraising does.
As crowdfunding is taking place online, people from various parts of India have the chance to look and understand the importance of your cause. With just one click of a button, they can donate any amount as much as they're willing to and take your campaign closer to its set target.
Crowdfunding is less time-consuming and inexpensive:
Offline traditional fundraising campaigns require a lot of time to approach people, explaining them your cause, and the cost of marketing via television or newspapers plus hiring graphic designers and the printing costs for banners.etc is probably more time taking and expensive when compared to crowdfunding.
When to build a crowdfunding campaign:
If your cause is more specific and time-bound.
If you want to get a treatment done to your daughter and you require funds to make the medical bills, then crowdfunding is the best option.
If you're low on funds.
As we discussed earlier, spending too much on banner ads in newspapers can prove to be costly.
Crowdfunding is a cheaper alternative.
If you don't want to go through the hassles of traditional fundraising.
Traditional fundraising can prove useful for a long term goal. But, traditional fundraising is mostly done by non-profits and can prove to be difficult to execute for individuals.
If you're a business or startup
If you're having a business or a startup and know the problems you've to face while taking loans from banks or approaching VCs, then crowdfunding is one alternative you can look for. In this way, people will evaluate your idea, and there's a real possibility of increasing brand outreach.
Despite the fact that the numerous advantages crowdfunding has got over traditional fundraising, you must realize that traditional fundraising still has a significant role to play in the world of investments.
Want to begin your journey of crowdfunding? Choose a good crowdfunding platform like Milaap and get started with your crowdfunding journey.