Personal loans, credit card loans or instant loans all provide loans at the time of financial need or monetary crisis. However, if you are facing a shortage of funds and need money, you can opt for Crowdfunding by using fundraising platforms and fill up the money gaps. Apeksha Singh, from Jaipur earlier this year had faced a similar problem. Her parents had a medical emergency and in the absence of a medical insurance cover, they faced a shortage of funds for the treatment. Singh was aware of crowdfunding, hence, through one of the crowdfunding platforms she was able to raise around 50 per cent of the cost of the treatment.
Crowdfunding lets people in need to raise money from a large number of people in small amounts, for various causes. Be it for personal cause or social relief, one can raise funds from these crowdfunding online platforms. Experts suggest people using fundraising platforms should only look at it to fill up the shortage of money they are facing. Dedicated fundraising platforms such as Crowdera, Impact Guru, and Ketto, are some of the popular crowdfunding platforms in India.
Also, during floods or similar natural disasters in the country, many use crowdfunding platforms for raising disaster relief funds.
Here is how you can use it;
Anyone in need of money can start a fundraiser using these platforms. To start a fundraiser one needs to create a campaign by filling out a form with one’s contact details. The reason or cause for which the money is needed also needs to mentioned in the form.
According to experts, the central of crowdfunding is social media, as it plays an important role in this process. For instance, sharing a campaign that has been raised actively on social media, can create the right atmospherics and attract more people to help in raising money.
However, note that even though funds can be raised for both personal and social causes, it is easier to raise money for a social cause. Such as, if the beneficiary is a non-profit organization or a hospital, it will be easier to raise funds, as compared to an individual for a personal reason.
Note that, when used for personal reasons, these platforms are to fill up the shortage of funds needed, hence it is suggested by experts to come with around 20-30 per cent of the funds needed for each cause and campaign. That way it becomes easier to raise funds and with the timeline. However, one can also start raising funds even from nil for a personal or social cause.
For instance, if you are raising money for your higher studies, and need Rs 10 lakh, try to arrange around Rs 3-4 lakh at the least either from your savings or your parents. It should be noted that this money raised from crowdfunding is through donations of people you do not have to repay.
Charges to start a campaign
Even though most fundraising platforms do not charge any money upfront, a success fee, however, for any campaign is charged. It is generally 8-10 per cent of the total money raised that is charged. This fee also includes platform fees, GST and other payment gateway fees.
How to make payment for a fundraising campaign?
If you want to contribute for some social relief or for someone through these platforms, payments can be made through a debit or credit card, net banking, mobile wallets and Unified Payments Interface (UPI). The fund is put directly from the crowdfunding platform to the beneficiary’s account and no third party is involved here.
People donating funds for disaster relief campaign, also are eligible for tax-benefit U/S 80G of the Income Tax Act.