Indiegogo, the tech company that facilitates fundraising, donations, and investment campaigns for businesses and persons, recently launched a new platform called generosity.com, which will exclusively house fundraising campaigns that are socially-minded.
All non-profit campaigns and personal fund-raising campaigns (for instance, helping a mom pay for her chemotherapy treatments) will now be housed on this site as opposed to the normal Indiegogo site.
On the normal Indiegogo website, campaigns are subject to a 5 percent fee on all money raised on the site, a 3 percent payment processing charge, and 30 cents per donation levied on the site.
One of the biggest developments from this new platform is that it will remove all but the payment processing charge for these “generous” crowdfunding campaigns that people and non-profits were previously subject to.
Indiegogo’s two largest competitors, GoFundMe and KickStarter, charge at least 5% platform fees regardless of what the campaign is funding. This new initiative by Indiegogo will surely make its site more appealing than that of competitors to people attempting to crowdfund.
However, this may create a financial problem for the company.
Indiegogo will subsidize the costs of running its new platform since Generosity.com will not be a profit-raising endeavor, and unless this initiative brings in significantly more revenue on Indiegogo’s main site, Indiegogo will likely see an increase in costs and a subsequent loss in profits.
Kickstarter, GoFundMe, and others are definitely the ones that will suffer from this announcement. All of the people that previously would have used these websites for personal crowdfunding campaigns will now likely shift to Generosity.com as this news becomes more public.
Clearly, Indiegogo made a calculated decision in announcing this endeavor. Either the executives believe that this will be a profit-driving initiative within the parent company, or they are truly attempting to address corporate social responsibility head-on and provide a service simply for the betterment of people.
The new website, launched on Oct. 21, already houses thousands of different campaigns. Regardless of Indiegogo’s intention, the result is definitely a win for the people.