The Best Free Crowdfunding Sites To Look Out for in 2023
Crowdfunding has become an essential way to raise money for businesses, individuals, and nonprofits alike. It can help startups find investors to get off of the ground or funds to move forward with specific projects. Whatever the case, it can be difficult to sift through all of the noise to find the right crowdfunder for you as you consider site features, fee structures, and more.
We are here to help by providing you with a list of the best crowdfunding sites for nonprofits that have the lowest fees. Keep on reading to find out:
- What Is Crowdfunding?
- Common Fees Associated With Crowdfunding
- #1: FreeFunder
- #2: GiveButter
- #3: FundRazr
- #4: Funraise
- Final Thoughts
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What Is Crowdfunding?
Crowdfunding is a form of fundraising that asks a large number of people to support a cause by donating a small amount of money in a short period of time. Crowdfunding is done online, usually through social networking sites. This makes it easy for supporters to share a cause that they are passionate about with their peers.
There are two main models of crowdfunding: donation-based and investment.
Donation-based: Backers contribute a monetary donation toward an overall goal for a project or cause. These contributors might receive a reward for donating. Crowdfunding for nonprofits falls into donation-based funding.
Investment: This type of funding is when businesses in need of capital sell ownership stakes in the form of equity or debt. Investors become owners or shareholders, giving them the potential for financial gain.
Salma loves a good crowdfunding campaign!
Most platforms for crowdfunding have the following characteristics:
Fundraising pages where you can describe, promote, and update your cause
Shareable campaigns across social media
Ability to accept donations via online payments
Ability to charge various fees
Some of the most well-known crowdfunding sites are GoFundMe, Kickstarter, and Indiegogo. Keep in mind, however, that hundreds of these platforms exist. Once you have chosen a worthy site, follow these six easy steps:
Sign up for a profile.
Start your fundraiser by telling your story and setting your goal.
Share it via email, text, and social media.
Watch donations roll in.
Thank donors for their support.
Withdraw the funds from the platform.
Pro Tip: You want to present a compelling story on your fundraising page. The more transparent and relatable your story is, the more attractive your campaign will be to potential donors.
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Common Fees Associated With Crowdfunding
Are there any free crowdfunding sites? The short answer is no. While many of these websites claim to be free, they typically mean it is free to start or sign up. Crowdfunding sites need a way to make money, and they do so by building in a percentage-based fee structure.
A subscription fee, or sign-up fee, is a one-time, monthly, or annual fee that a crowdfunding platform charges for you to use its services. For example, MightyCause has two subscription plans starting at $59 a month that are billed monthly or annually. However, you will find that most crowdfunding sites do not charge a subscription fee; rather, they make money from platform fees.
A platform fee, or fundraiser fee, is a percentage of each donation that the platform keeps as a form of payment. Most crowdfunding sites have a platform fee of 5%. Patreon, for example, is free to sign up for, but it charges a different platform fee for each of its three pricing plans. Patreon’s cheapest plan charges 5% of the monthly income you make, and its most expensive plan charges 12%.
Donor fees are charged to the donors instead of the fundraiser creators. A donor fee is an alternative to a platform fee. Crowdfunders usually list it as a voluntary "tip" that the donor can provide to help fuel the platform’s expenses. For instance, DonateKindly has a suggested 4.9% tip during the donation process.
A transaction fee, also known as a third-party processing fee, is a percentage of each donation that the credit card processor charges to handle the transaction. Most transaction fees are the industry standard of 2.9% plus $0.30 per donation. Bonfire, an online T-shirt fundraiser, is an example of one crowdfunder that charges a high processing fee of 8%. However, for verified nonprofits, the fee is reduced to 3.5%, which is still higher than most.
I guess there's no such thing as a free lunch, is there, Anthony?
Be aware that some crowdfunding platforms have other fees. For example, SeedInvest, an equity crowdfunder that connects startups to investors, charges a cash fee of 7.5% in addition to an equity fee of 5% from the amount of raised capital.
Pro Tip: According to Candid, less than half of all crowdfunding campaigns reach their goal. Some sites have an all-or-nothing policy, which means that if you do not reach your goal, you do not get any of the money. Be sure to read and understand any crowdfunding site’s terms and conditions before you start a campaign.
As we previously mentioned earlier, a 100% free crowdfunding platform does not exist. The following companies have some transaction fees but no sign-up fees.
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Who They Are
FreeFunder hosts several types of fundraisers that nonprofits and individuals alike use. Some common campaigns include ones for education and emergency help.
FreeFunder offers easy-to-use, customizable pages. With the page editor, you can change the font color and size, add a description, attach pictures, and more. Plus, your campaign page transfers seamlessly from desktop to mobile, which is helpful for the text-to-donate feature.
You can also create a custom link for your page, which adds to the ease of sharing across social media platforms. Once you create and share the page, you can update supporters about the campaign via email and add team members to get help managing it.
FreeFunder has no fees outside of the third-party processing fee of 2.9% plus $0.30 per donation. The site relies on the optional tips from the campaign backers. The backers can click on the recommended donation link and type zero if they want to bypass the tip.
FreeFinder prides itself on fast customer support. Following the support link on its page, you can submit a contact form to describe your issue. After that, someone will get back to you within 24 hours. In addition, you can message the team through the platform’s Facebook page.
FreeFinder’s website also has an FAQ section that tells you how to navigate the platform as well as a blog that gives you general crowdfunding tips.
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Who They Are
GiveButter is accessible to everyone, making it popular for well-established nonprofits as well as newbie fundraisers. Organizations of varying sizes can raise funds and host events.
GiveButter has a multitude of features. To get started, you can create and customize fundraising pages and donation forms. In addition to the typical crowdfunding, you can host auctions as well as other in-person, virtual, and hybrid events.
This site allows you to accept donations both online and offline with an easy payout system. In terms of management, GiveButter offers data tracking, ticket management, and conversion tracking.
There are no sign-up fees or platform fees on GiveButter. The 2.9% plus $0.30 per donation processing fee applies, but 95% of donors end up covering this fee. You can choose to disable the donor tip feature, but GiveButter will charge a platform fee from 1-5% depending on the feature that you are utilizing.
Oliver is ready to check out some of these crowdfunding sites!
GiveButter’s customer support starts with its help center, where you can find articles that cover everything you need to know about any of its features. You can also contact the customer service team via email and chat Monday through Friday from 8 a.m. to 8 p.m. EST or via phone Monday through Friday from 10 a.m. to 1 p.m. and 2 p.m. to 6 p.m. EST. The support team is not available on holidays or Thursdays from 1 p.m. to 2 p.m. EST.
In addition to its help center articles, it also has blog articles that give tips and tricks for navigating fundraising in general.
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Who They Are
FundRazr is an award-winning crowdfunding platform that helps individuals, nonprofits, and businesses raise money for causes that they care about. Its mission is to create the best fundraising platform to solve the world’s most challenging social issues.
You can get started right away with FundRazr’s donation pages, custom branding, and secure donations. You can then engage your community through social sharing and automatic updating.
Aside from the standard features, FundRazr also offers a perks and wishlist feature to increase donor retention and an analytics feature to track data.
As with GiveButter and FreeFunder, FundRazr has no subscription or platform fees on top of its standard processing fee of 2.9% plus $0.30 per donation. FundRazr also asks backers to provide a small tip, which usually covers the processing fee. This is called the Simply Free Plan.
FundRazr has two other plans that come with increasingly better perks. With Nearly Free, the site asks supporters to cover the 5% platform fee. Not Free follows the industry-standard fee structure, where the platform fee is taken from the contribution.
FundRazr’s site features an FAQ section as well as a help center to walk you through the platform’s functions. It also has a submittable message form and an email address for any inquiries.
Like the other crowdfunding sites, FundRazr has a blog. However, you have to enter your name and email to access it.
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Who They Are
Funraise is a state-of-the-art fundraising platform that employs advanced yet easy-to-use tools to make fundraising more accessible and manageable.
You can start your fundraising journey off right with Funraise’s wealth screening, which is a built-in tool that helps you match your nonprofit to the best potential donors.
In addition to helping you create crowdfunding pages, it can also host virtual events, promote activities on social media, send automated texts and emails, create donation buttons and forms, use reporting dashboards, and so much more.
Funraise is free, aside from the industry-standard processing fee. Funraise encourages donor tips, as this makes the company a little extra money.
However, the company does have a paid subscription plan, Enterprise, which starts at $2,500 a year. This plan includes everything you get with the free version plus extra features, such as peer-to-peer fundraising.
Sam is browsing Funraise's site right now!
Funraise has an online chat service as well as an email address that you can reach Monday through Friday from 8 a.m. to 5 p.m. PST. The website also has an entire tab dedicated to resources with a blog, form, podcast, and more.
Pro Tip: Before you choose a crowdfunding site for your nonprofit, put a fundraising plan into place. By ensuring that you know who your target audience is and what type of campaign you want to run, you can choose a site that meets your needs.
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Despite the fees, crowdfunding is still a cost-effective method of fundraising. There are a lot of crowdfunding platforms to choose from, with each one offering its own unique features. Get fundraising today by partnering with one of these low-cost crowdfunding websites!
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💡Is there a free crowdfunding website?
No. There are no totally free crowdfunding websites. However, some platforms only charge the low industry-standard processing fee of 2.9% plus $0.30 per donation. Find out more.
🔑 What is the cheapest crowdfunding website?
The cheapest crowdfunding websites are FreeFunder, GiveButter, FundRazr, and Funraise. Find out more.
📝 What fees do crowdfunding websites charge?
Crowdfunding sites usually charge subscription fees, platform fees, donor fees, and/or transaction fees. Find out more.