Crowdfunding vs. Fundraising - what are the differences?

Crowdfunding vs. Fundraising - what are the differences?

While fundraising is for non-profit organisations where the purpose of raising money is to support people in need or community projects, crowdfunding is about launching personal projects or business ideas.
Fundraising means nothing other than "collecting donations" and is always based on a charitable purpose. With fundraising, donors can give as much money as they want to the organisation or private person who is asking for financial help. There is no funding target. Fundraising is purpose-driven and there is usually nothing in return for the donor. Donors usually have no personal connection to the organisations or private persons asking for donations. They simply want to do something good and work for something positive.

Examples of fundraising:

  • Fundraising for charitable purposes (e.g. aid in war zones)
  • Fundraising for people in need (e.g. helping people in poorer countries - general supplies, building school systems, food, hygiene items, etc.)
  • Fundraising for oneself (e.g. to be able to pay for hospital costs or serious crises)

Crowdfunding can be translated as "swarm funding". Donors almost always receive something in return for their donation. Crowdfunding projects are well planned, follow a schedule and have a fixed funding target. Crowdfunding is also about the "all-or-nothing" principle. If the project is not fully funded, donors get their money back. The most important thing in crowdfunding is promotion! Because the majority of donors come from one's own environment - family, friends, acquaintances, as well as people and organisations who have become aware of one through good promotion.

Crowdfunding examples:

  • Business ideas (e.g. the opening of a new business)
  • Personal projects (e.g. the renovation or reconstruction of a building that serves a specific personal purpose)
  • Social projects (e.g. projects that support people in need, that you kow personally or have a connection to).

Differences fundraising vs. crowdfunding



No precisely defined term

Time frame is specified 

Variation of the target amount

Target amount is fixed (stage funding possible)

All funds raised go to the organisation

All-or-nothing principle

No quid pro quo for supporters

Quid pro quo for supporters (goodies)

Donations can be used for different purposes

Concrete and planned implementation concept (proof of concept)