The best crowd­fund­ing sites – a com­par­i­son

Crowd­fund­ing is a popular way to finance private projects and start-ups. A crowd­fund­ing campaign is used to launch an appeal for donations, sometimes with a funding target and reward system for backers (those who donate to the campaign), although this is optional. Thanks to crowd­fund­ing, many in­ter­est­ing projects from a wide variety of subject areas have already turned designers’ dreams into reality. Projects include fundrais­ing campaigns for charities, the design and pro­duc­tion of personal, everyday objects, as well as artistic projects.

The main advantage of crowd­fund­ing is that it does not rely on a few, rich investors, but instead on a large number of in­ter­est­ed private in­di­vid­u­als – hence “crowd” in the name. If the project sells itself, funding momentum can pick up within a group or community, which increases how quickly the project pro­gress­es, and its pop­u­lar­i­ty. Trans­paren­cy and com­mu­ni­ca­tion with your backers are key factors in a suc­cess­ful crowd­fund­ing campaign.

The in­creas­ing pop­u­lar­i­ty of this form of financing has led to a wide range of crowd­fund­ing sites where you can present and manage your campaign, and also process any donations your campaign receives. The most popular websites have managed to integrate them­selves into the language of crowd­fund­ing: “I kicked off my project” has become part of crowd­fund­ing jargon. The platform kick­starter.com is the most popular worldwide, but over the years other good com­peti­tors have developed, some of which are more spe­cial­ized than Kick­starter and draw a specific crowd.

The choice of a suitable crowd­fund­ing website depends on a few factors. For example, you can plan your project as a private in­di­vid­ual, or as a start-up. The industry which your project is part of, and the target group you want to address, as well as the crowd­fund­ing model you use and the size of your project, are also factors which will influence which crowd­fund­ing site you choose. Fur­ther­more, the con­di­tions and fees of the re­spec­tive platform are just as decisive as the question of how it deals with failed projects and embezzled donations.

The idea of crowd­fund­ing itself is fairly old. Going back even to the 19th century, book printing was financed by donations from those in­ter­est­ed in the book. Even the Statue of Liberty in New York was co-financed by donation campaigns, which raised a total of $160,000 to complete the base con­struc­tion. However, crowd­fund­ing in the modern sense only became an easily ac­ces­si­ble financing model based on the social and globally networked structure of Web 2.0 with the launch of the crowd­fund­ing sites Indiegogo (2008) and Kick­starter (2009).

The campaign pages at Kick­starter are stylish and clearly formatted. In the header, Kick­starter shows how much money the project has already collected, how many in­di­vid­ual backers have already par­tic­i­pat­ed, and how much time remains to achieve the financing goal. Under “campaign” the de­vel­op­ers present their project and list the rewards, stretch goals, and other important details of the campaign. Under “updates” you can inform your backer base and other potential in­ter­est­ed backers about the progress of the project in the form of a timeline. Reg­is­tered users can post sug­ges­tions, criticism, and praise under “comments.”

The “community” section shows in­ter­est­ing and important in­for­ma­tion about the backer base and how it is spread out. In addition, some sup­port­ers who have already gained some recog­ni­tion in the Kick­starter community are mentioned here. After all, it is good publicity for a project if dedicated and famous investors could be brought on board – even if the focus is on crowd funding, it never hurts to have the extra support.

A problem that the crowd­fund­ing community has to face, and that remains unsolved by Kick­starter, is how to handle the suc­cess­ful­ly financed, but nev­er­the­less failed projects. A lot of in­di­vid­u­als’ money has gone down the drain, because de­vel­op­ers broke off the re­spec­tive project after suc­cess­ful crowd­fund­ing without re­im­burs­ing the donated money. In some cases, there were simply no more updates to certain projects, which then had to be reg­is­tered as inactive, and the backers were simply abandoned. Whatever the reasons, crowd­fund­ing is always a risk in­vest­ment. Kick­starter does not seem to be actively looking for a solution to the problem – the rather short rules of Kick­starter do mention it in brief, but not enough to tackle the problem.

Kick­starter has also been crit­i­cized for in­flu­enc­ing the success of projects too much itself. “Staff pick” badges show the Kick­starter team’s favorite projects. This enables Kick­starter to control which projects attract more attention. However, it is not clear exactly how a project can earn the badge, as the criteria for this do not seem to be easily ac­ces­si­ble.

The nav­i­ga­tion of the website is not as straight­for­ward as it could be. If you want to see all projects in one category it often takes a while to get to the right page. Until you get to this page, only a selection of projects will be presented, e.g. projects that are close to the financing goal or have already generated a lot of attention. Many visitors simply don’t see most of the projects, because they don’t trawl through the pages and filters of the website. This is a dis­ad­van­tage for projects which haven’t had much coverage or support yet.

Donations to a GoFundMe project can be made via credit card. After donating, you can also leave messages on the campaign’s page, depending on the type of campaign: e.g. recovery wishes, en­cour­ag­ing con­tri­bu­tions, or requests for further donations. The focus of GoFundMe on social projects can also be seen in how the campaigns are cat­e­go­rized by the site itself: education, medical, charity, emer­gen­cies, and com­mem­o­ra­tions are listed first, while common crowd­fund­ing cat­e­gories such as creative projects and companies don’t play such a big role.

GoFundMe is also on top of things in terms of customer support. If you want, you can consult so-called “coaches” who help to make the campaign page as at­trac­tive as possible. The GoFundMe help center also provides rel­a­tive­ly detailed guides on how to use the crowd­fund­ing site. In­ter­est­ed backers can also find out about their rights, and how to process donations. In the event of a mistaken donation, or a fraud­u­lent campaign, GoFundMe will provide a contact form if a donation made should be refunded. The operators also promise to control the funds very strictly, and to ensure that all donations go to the right address. If the security measures fail, GoFundMe even agrees to reimburse lost amounts or to pay the dif­fer­ence in donations itself.

However, GoFundMe has an issue in the way it is perceived, because too many personal projects end up on the website. Because private in­di­vid­u­als can be sponsored here for their personal plans, many GoFundMe projects have already led to minor scandals. Donation requests from people who want to have their wedding financed is an example of the more innocent kind of personal project, but still does not align with the crowd-funding mindset. Quality control at GoFundMe is not con­sid­ered par­tic­u­lar­ly well developed, so well-in­ten­tioned projects are sometimes lost in the mass of mini-campaigns.

When it comes to its design, Indiegogo has a modern, min­i­mal­is­tic style. The simple structure of the website directs visitors’ attention to the campaigns. Nav­i­gat­ing this crowd­fund­ing site is smooth and simple. It is also well struc­tured, es­pe­cial­ly the way the projects are sorted. In addition, projects can generally be sorted by pop­u­lar­i­ty and funding strength. Otherwise, they are divided into the usual com­mer­cial cat­e­gories and sub­cat­e­gories.

Indiegogo’s special feature is that you as project creator receive most donations im­me­di­ate­ly. Since the majority of donations are made via the PayPal payment service, there is no need for a waiting time for the donation to be deducted from your account. Indiegogo also offers payment by credit card; however, these donations will not be credited to your account until about two weeks after the end of the campaign. The platform charges the standard 5 percent fee for each donation, with credit card payments at an ad­di­tion­al 3 percent plus a fixed 30 cents.

Indiegogo has a few ground rules which must be observed before starting a project. Project leaders under 18 years of age need the per­mis­sion of a parent or guardian to start a campaign. In addition, projects which aim to collect money for illegal ac­tiv­i­ties, or where the basic idea is absurd or un­re­al­is­tic, are deleted. Perks which offer drugs, weapons, or gambling rewards are pro­hib­it­ed, and campaigns that promote any kind of physical or psy­cho­log­i­cal violence are banned.

Apart from these common-sense rules, Indiegogo sets no limits to its projects, making it quite an open platform in com­par­i­son to its com­peti­tors. However, some filters are missing that prevent non­sen­si­cal or immoral projects from ending up online on the website. The overall quality of the projects is not, generally speaking, that high, although that does not mean that there are not ingenious projects on the site.

Indiegogo does not take re­spon­si­bil­i­ty for the content of in­di­vid­ual campaigns, and does not assume any re­spon­si­bil­i­ty in cases of fraud. The “trust & safety” pro­tec­tion program is based solely on trusting the in­ter­ac­tion between the in­di­vid­u­als in the community. After all, in the event of problems, the site provides a special service that can be contacted around the clock. Otherwise Indiegogo mainly relies on personal re­spon­si­bil­i­ty: potential backers are en­cour­aged to analyze the campaigns in detail before making a donation, as well as to ask questions and to express concerns. Project creators are asked to ensure full trans­paren­cy, and to com­mu­ni­cate regularly with backers.

It is worth men­tion­ing the extensive education center, which offers a crowd­fund­ing for beginners guide with com­pre­hen­sive in­for­ma­tion, as well as tutorials and webinars. However, it is fair to question whether any project creators actually make use of it.

In addition to the fixed monthly donation, Patreon also offers a payment method that comes close to a typical sub­scrip­tion. You can determine a fixed sum from backers when you upload or send something, e.g. a new video. Sub­scrip­tions can be adjusted or cancelled at any time. Backers often increase their monthly con­tri­bu­tion if you add a new funding target and combine this with certain promises such as even more regular content.

Due to the sub­scrip­tion model, the community aspect is par­tic­u­lar­ly strong at Patreon. The sub­scribers not only ensure you receive regular income, but also act as a feedback source. The in­ter­ac­tion with this community is even more important than with tra­di­tion­al crowd­fund­ing platforms based on one-time donations. Finally, you will be actively supported by your backers, whose personal com­mit­ment to your project is much stronger due to their monthly payments. That means that at Patreon, community work is the most important aspect if you want to suc­cess­ful­ly finance your projects over a long time. It is essential that you include this regular effort in your planning.

This crowd­fund­ing site has rel­a­tive­ly relaxed reg­u­la­tions about what kind of content is put online. Only violent, and porno­graph­ic content, is banned. Nev­er­the­less, Patreon seems to have certain rules that are not fully com­mu­ni­cat­ed. One con­tro­ver­sial issue was when a YouTuber project was banned in July 2017, in which the YouTuber requested donations for activity in the Defend Europe group to document the violent blockade of NGO ships. Patreon defended their ban of this project stating that they did not want to promote projects which harm other people. There was also criticism when Patreon deleted the project page of an anarchist group. Patreon was accused of double standards, but promised to improve their policies and eval­u­a­tion processes.

Barn­rais­er’s design is very focused on images, with lots of bright and quality photos taking center stage. It is not quite as polished as Kick­starter or Indiegogo, but it is also a newer platform, and less focused on tech and design – perhaps it could be con­sid­ered to be in keeping that the site places its focus on the projects and end-product, rather than con­vinc­ing visitors through its design. Nav­i­gat­ing the site is a little frus­trat­ing, and finding essential pages such as the FAQs or trans­ac­tion policies is a little taxing. However, once you have located them, they are useful and fairly trans­par­ent. Barn­rais­er takes 5% of a suc­cess­ful campaign’s final amount, and you can boost your project using “premium services,” which place your project higher up in searches, for example. These must be paid for, and the revenue for this feature alongside the revenue from sponsored content and the 5% trans­ac­tion fees make up the business model for this crowd­fund­ing site. You can pay for your pledge via credit card, and in­ter­na­tion­al cards are fine too. Just be aware that the amount won’t be deducted from your card until the project is done, so make sure you’re pledging from an account that’s always covered.