Pros and cons of crowdfunding that Christians should consider before giving
Crowdfunding is the practice of raising funds for a project or cause by using a network of people who give small donations.
You may have seen it used to raise money for a new business or personal medical expenses, or to help a family member with funeral costs.
But crowdfunding is also being used by Christian ministries and nonprofit organizations as an alternative to traditional fundraising methods.
Before you decide whether to donate to someone's crowdfunding campaign, here are some pros and cons of crowdfunding that Christians should consider before giving.
Pros of crowdfunding
More resources — Crowdfunding can give people in need access to resources they otherwise wouldn't have. Many people turn to crowdfunding when they've already exhausted other avenues of financial support. In those situations, it can be a great resource.
Launching something new — Crowdfunding can help people get things off the ground in any walk of life, whether it’s an entrepreneur who’s launching a new product or service or an artist who’s trying to make a film or album. Even though many of these projects may end up not being worth funding, sometimes we may find something incredible!
Help for emergencies — Crowdfunding can help someone cover expenses related to medical procedures and treatments that insurance doesn't cover in full or at all. This is especially crucial as health care costs continue to rise.
Gaining access to the new community of people — Crowdfunding welcomes and unites a large community of people who love to give and help others. The more you share and get the word out about your campaign, the more beautiful people you have the chance to connect with because they supported your campaign! Christians could also win some souls back to the ways of God when they see the generous giving by God’s people.
Building momentum — Driving a fundraiser to help the needy builds momentum, and seeing and hearing other people talk about helping in the initiative encourages more people to jump in and help.
If you have ever participated in a fundraiser, you might note that some campaigns collect more money than others. This depends on the marketing strategy (not just the quality of the movement itself) and the givers' choices.
Cons of crowdfunding
Crowdfunding sites are not regulated — Crowdfunding sites aren't held accountable the same way nonprofit organizations are. Anybody can create a page asking for money to fund their project or personal cause, whether it's true or not.
You might not get your money back — Because there's no guarantee that a crowdfunding campaign will reach its goal, you could end up paying for something that doesn't happen. For instance, your gift could help pay for an adoption that falls through.
Your donation isn't tax deductible — If you give through a crowdfunding site (instead of giving directly to a nonprofit), you can't deduct it from your taxes. There is an exception if a tax-exempt organization sets up its own crowdfunding site.
Accountability — There's no guarantee that a person who makes a crowdfunding campaign will use the money wisely or effectively. Someone might present a request strictly for food, shelter and medical needs but then use money from donors to go on vacation. This is not something anyone wants to happen with their donated money, which is why it's essential to be aware of this possibility.
There are plenty more pros and cons of crowdfunding. Just give generously and wisely. Don't give more than you can afford to lose! Pay attention to any key players in the community that are giving, or even mutual friends. Do some homework on the crowdfunding campaign owners if you don't know them personally.
If you feel good about it, send your prayers that every seed would be multiplied and used for its intended purposes.
Centerpoint Church is ready to walk with you on your faith journey
At Centerpoint, our community believes in purpose and passion, and we would love to walk with you on your journey in finding yours. You can also find out what our community’s drive and passion are all about by checking out some of the past sermons we’ve posted on our website.
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