Almost US$1.5 billion was raised in 2011 by crowdfunding platforms around the world, according to an industry report released Tuesday by Massolution, the research group of industry body Crowdsourcing.
There were almost 350 crowdfunding platforms, or onlinefundraisingplatforms that generally accept small donations, at the end of 2011,the report found, up by more than 50 percent from the beginning of theyear. The platforms hosted roughly a million campaigns, it said.
Some platforms like Fundly allow nonprofits to use the Web to connectwith charitable donors. Others, like Kiva, seek to provide small loansto individuals in need. The study also tallied crowdfunding effortsthat provide equity or non-monetary rewards in exchange forcontributions, but those accounted for just a small share of theeconomic activity.
Carl Esposti, director of Massolution, said it conducted the studyafter seeing “wild guesses” about the size of the industry that weren’tbased on hard data. As an industry association, Esposti said,Crowdsourcing regularly talks to the platforms, who said no one hadasked how much money they had helped raise.
“This data just wasn’t available before. It was impossible to get thisdata at an aggregated level,” he said.
Crowdfunding can bring dramatic results. The indie musician AmandaPalmer is currently running a campaign on Kickstarter to fund her firstmajor album since breaking with a major record label in 2010. Thecampaign has raised close to $600,000 in six days.
Popularity still growing
The average donation campaigns brings in significantly less: $660.Campaigns that offer equity in a project, which are popular in Europe,bring in nearly $85,000 per campaign, the report said. Espostipredicted that these campaigns will take off in the U.S. whenregulatory requirements become clearer.
The number of crowdfunding platforms will surpass 500 in 2012, and theplatforms will raise $2.8 billion by the end of the year, the studypredicts.
The report’s researchers interviewed 135 platforms which accounted forjust under 40 percent of the market. They gathered data for additionalplatforms accounting for 56 percent of the crowdfunding market, and theremainder was statistically extrapolated.
Cameron Scott covers search, web services and privacy for TheIDG News Service. Follow Cameron on Twitter at CScott_IDG.