Crowdfunding is the process of raising capital for a project or a venture from a large number of people, typically over the internet. The practice makes use of social media platforms and crowdfunding websites to collect amounts as little as even $10 from volunteers willing to donate.
With the world being attacked by the deadly coronavirus since December 2019, crowdfunding has become a major S.O.S for the needy and distressed. Crowdfunding raised record amounts in 2020. Crowdfunding sites like GoFunfMe have become a very popular source to donate. The website claimed that it attracted funds worth $625 million for Covid relief between March, 2020- June, 2020.
In the UK, Coronavuirus has had a big impact on the type of crowdfunding. Crowdfunding platforms related to rewards and donations have been raising funds for frontline workers. In the domain of equity crowdfunding, UK based fintech startup Freetrade raised 7 million pounds from around 8000 backers in just five days.
Gluten Free premium cup noodles company – Pure Food Company raised funds for themselves to scale up their sales and marketing efforts amidst the chaos to help the poor eat better via their products.
In addition to that, many celebrities, influencers, social media bloggers and fundraising networks organised fund collection drives for various causes like college tuition, medical expenses etc. to help the distressed sail through the tough times.
But while the social media platforms and crowdfunding websites employ highly technical and reliable safeguards against hackers and frauds, there have been cases of misuse of funds collected in all parts of the world.
There are many ways to ensure the authenticity of a fundraiser and give without getting scammed. In case of fundraising via a social media platform, check as to who is raising the funds, whether they are an influencer or the family member of the grieved itself.
In case of involvement of a middle party like an influencer, check their reach and how they are related to the grieved. In case of a social media profile, check the number of followers and the profile photo. A freshly constructed profile just for the sake of one fundraising campaign is something that one would want to steer clear of.
To assess posted pictures and profile photos, a Google reverse image search can be performed by dragging the photo into the site’s search window and checking if it’s an original photo or picked up from stock images.
Some of the top crowdfunding websites are Crowdcube, Kickstarter, Syndicate Room, Indiegogo, GoFunfMe, JustGiving, Crowdfunder and Seedrs. Many of these platforms like Crowdfunder do not charge any platform fee for donations, medical related charities, personal cause projects and fundraising related to Covid-19 cases.
In these unprecedented times, many companies have been forced to layoff employees to reduce operating costs. National charities are doing their but but giving to non-profit organisations and standing up for genuine causes is the best way to help the community and stay clear from scams.