Charities and Crowdfunding

The term "crowdfunding" has become one of the many ways funds are raised for charitable purposes, but because there are different forms of crowdfunding, it's not always clear what this term means. Crowdfunding generally means funding a project through the donations of a large number of people. It is typically conducted online and in some cases, campaigns can go viral and quickly attract significant attention and money. Crowdfunding for donations is where money is requested, but no services or goods are offered in return.

Charities use a wide variety of methods to raise charitable donations. New and powerful technologies utilize not only the internet and email, but also social media and mobile phones. Today, a volunteer can create a fundraising page and start soliciting on behalf of a charity in minutes. So, too, can a fraudster. To help charities and fundraising platforms understand their rights and obligations in this rapidly evolving fundraising environment and to help donors make informed giving decisions, the Secretary of State’s Charities Program offers the following tips.