The honest comparison
- Speed — a crowdfunding campaign runs in weeks; grant cycles typically run in months.
- Restriction — grant money often comes tied to a programme and a reporting schedule. Community money is tied to the project you described and nothing else.
- Effort — grant writing is concentrated work by one or two people. Crowdfunding is lighter but public, and it needs your whole network.
- What is left afterwards — a grant ends. A campaign leaves you with a list of named supporters who already gave once.
When crowdfunding is the better fit
A specific, visible, fundable thing — a van, a kitchen, a season of a programme, an emergency. Something a supporter can picture and tell a friend about.
It fits less well for general operating costs, multi-year salaries or anything that cannot be explained in two sentences.
Running both
Most organisations should. A campaign can fund the piece a grant refuses to cover, and a funded campaign is evidence of community support that strengthens the next grant application. Verified nonprofits on Pledzy pay a 3% platform fee instead of 5%.
Common questions
Do we need 501(c)(3) status?
To get the reduced nonprofit rate we verify the organisation, including its EIN. Groups without that status can still run a regular campaign at the standard rate.
Is crowdfunding money a donation?
On Pledzy backers receive a reward, so a pledge is generally not a tax-deductible charitable gift. Check with your accountant about how to record it.
Keep reading
How churches, youth sports, community groups and registered nonprofits run a reward-based fundraising campaign — with a reduced platform fee and EIN verification.
What an EIN is, what we check before a nonprofit gets the reduced rate and the verified badge, and what happens to the documents you upload.