In Crowdfunding: Why People are Motivated to Post and Fund Projects on Crowdfunding Platforms, crowdfunding is defined as “an open call over the Internet for financial resources in the form of a monetary donation, sometimes in exchange for a future product, service, or reward. ”
Crowdfunding as we’re defining it is only possible through the internet, so it’s a fairly recent development. Of course, the concept of donations has been around forever. They just take a slightly different form online. When you think of donating to charity, you don’t imagine that the money you give will ever be returned to you in any way. But one difference of crowdfunding is that those asking for donations often offer some sort of (usually artistic/creative) services to compensate their givers.
Another difference is the scale. Why People are Motivated also states that “currently, there are more than 50 crowdfunding websites in the US, and they are experiencing an exponential growth in popularity.” This may seem like a lot because of the newness of crowdfunding, but relative to more common nonprofits and personal charity (i.e. when you loan your neighbor $100 to help him move, or giving to someone from your church), there’s not actually that many avenues to pursue for raising money.
It is also, as I’ll be exploring later, much easier to lie.
The first company to dedicate itself to crowdfunding was ArtistShare, in 2001. Since then, sites like GoFundMe, Kickstarter, Indiegogo, and more have taken the concept and run with it, enabling people to donate to real people and charities (and some that aren’t so real) with a few clicks of a button.
I believe that that is a good thing. There are plenty of people in the world who are experiencing tragedy or who are struggling to make ends meet, and those who are more fortunate should be able to easily help them when they can. But that doesn’t mean that there are no drawbacks to the system of online donations.
Crowdfunding: Origins, Concepts, and Future 