September 22, 2014 | Read Time: 3 minutes
Indiegogo, a for-profit company created in 2008, operates one of the biggest and best-known crowdfunding sites. It allows individuals or groups to raise money for charities, inventors, artists, and others. It generally offers perks as incentives, which can range from a thanks on Twitter to a product like a book, poster, or T-shirt.
The company does not break down how many of its campaigns benefit nonprofits, but it said about one-third involve social causes.
How much it has raised: Indiegogo does not reveal this number. Co-founder Danae Ringelmann said only that the site has hosted more than 200,000 campaigns and that about 8,000 campaigns are going on at any given time. The nonprofit campaign that raised the most money, she said, was one by MTV stars on behalf of Architecture for Humanity, which drew $1.05-million to help the group rebuild the Jersey Shore after it was devastated by Hurricane Sandy.
Share of campaigns that reach their funding goals: Indiegogo declined to give a number, but industry publications that have analyzed the site report that most have failed to reach their goal.
How it vets nonprofit campaigns: Eligible campaigns carry a badge labeling them a “verified nonprofit campaign” and thus eligible for tax deductions. To qualify, the nonprofit must be included in a database of IRS-approved charities or provide the IRS letter granting it 501(c)(3) status.
How it communicates with donors: FirstGiving, a nonprofit payment processor, sends donations directly to the nonprofit and sends an email to the donor confirming the eligibility for a tax deduction.
Fees: 4 percent of the donation goes to FirstGiving; 3 percent goes to Indiegogo if the campaign reaches its goal, 6.75 percent if it does not.
What happens if a campaign does not reach its goal: The nonprofit still gets the money, but Indiegogo takes a bigger percentage (see above).
Finances: Indiegogo has raised more than $56.5-million in venture capital, with prominent investors including British tycoon Richard Branson and PayPal co-founder Max Levchin.
Sample Campaign
Geeks Doing Good, a campaign for Heifer International
Patrick Rothfuss, a fantasy novelist, created the charity Worldbuilders to raise money for Heifer International, a global antipoverty group that provides livestock and training to farmers overseas. His group normally holds an annual online fundraiser on Heifer’s website. In July, it decided to try a new approach, creating an Indiegogo campaign to raise money to complement the annual effort.
The group offered donors perks, some donated and some purchased, that included art calendars, coloring books, coffee mugs, novels, rings, and signed copies of Mr. Rothfuss’s new novella, The Slow Regard of Silent Things. Maria Davis, the coordinator of Worldbuilders, said the Indiegogo campaign will help her group gauge interest in items it could sell in the online store that it operates to raise revenue.
Fundraising goal: $10,000
Amount raised: $205,032 in one week ending July 14. A portion of that will go to Heifer International after Worldbuilders pays for the perks that donors selected. Ms. Davis says the exact amount will be determined when her charity calculates its overall 2014 contributions to Heifer. In fiscal year 2014, it raised or donated $855,000 to the group.
Donors: 4,749 people contributed. The names are provided to Worldbuilders so it can fulfill the perks orders.
Other crowdfunding efforts: Ms. Davis says Worldbuilders plans to do a crowdfunding campaign for Heifer every year.
