Key Term

What is Crowdfunding?

Definition

Crowdfunding is a fundraising method where individuals, nonprofits, or organizations collect small amounts of money from a large number of people, typically through online platforms like GoFundMe, Kickstarter, or Facebook Fundraisers. In charitable giving, it involves leveraging social networks and digital platforms to reach potential donors who can contribute any amount toward a specific cause or project.

Significance

Crowdfunding has revolutionized charitable giving by democratizing philanthropy and making it accessible to anyone with an internet connection. It enables causes to reach a global audience, allows donors to give directly to specific projects or individuals, and provides transparency in fundraising progress. The social sharing aspect of crowdfunding creates a multiplier effect, as donors often become advocates who spread awareness about causes through their networks. This method has become particularly important for grassroots initiatives, emergency relief efforts, and smaller nonprofits that may not have access to traditional fundraising channels.