Indiegogo Launches Generosity To Compete In Personal Crowdfunding

Indiegogo Launches Generosity To Compete In Personal Crowdfunding
Zack Miller, Crowdfunding Expert, About.com

Over the few years that crowdfunding pioneer Indiegogo has been building its business, it's reinforced its focus on supporting creative endeavors. 

Indiegogo's roots are in the artistic process. If you read more about the establishment of the crowdfunding pioneer, its three founders were dead-set on creating a finance platform to help people donate money to projects they're passionate about:

Since 2008, millions of contributors have empowered hundreds of thousands of inventors, musicians, do-gooders, filmmakers—and other game-changers—to bring big dreams to life.

With so many forms of crowdfunding out there, it was clear that Indiegogo wanted to stay true to its ideals and focus on funding the creative process.

With GoFundMe, personal crowdfunding takes off

Fast forward a couple of years and both Indiegogo and crowdfunding leader, Kickstarter, are concentrating on building out their platforms for creators and backers. This left an opportunity for another player to step in and fill in the crowdfunding void in personal projects: if someone wants to raise money to send their kid to college or to pay medical bills.

That's where GoFundMe spotted an opportunity. It quickly stepped in and owned personal crowdfunding. So much so that earlier this year the crowdfunding platform announced it had received a large investment from a consortium of investors interested in taking GoFundMe to the next level (it's raised $1.2 billion already for crowdfunding projects).

Recognizing an opportunity, Indiegogo announced it would launch Generosity, an Indiegogo-powered site to promote "human goodness". Essentially, Generosity is Indiegogo's response to GoFundMe.

It's important to note that Indiegogo recognized the competitive challenge is saying it's committed to backing the creative process and then entering personal crowdfunding space.

Apparently, that's why the company launched its offering under a different brand (Generosity). Truth is, Indiegogo had kept a toehold in personal crowdfunding with its Indiegogo Life offering. Generosity is a relaunch of this effort.

How Generosity is different

Because many people who turn to personal crowdfunding do so after hitting financial straits, Generosity launched as a cheaper option compared to competitive offerings.

According to the NYT:

The new platform is designed to be a cheaper alternative to traditional crowdfunding sites, including its parent. Indiegogolevies a 5 percent platform fee on money raised through its site, a 3 percent payment processing charge and 30 cents per donation. Generosity.com, like Indiegogo Life, has no platform fee, but processing charges will be deducted before funds are disbursed.

Indiegogo said it would launch a tip jar on the Generosity -- so, even though there's not platform fee (which can be as high as 5% of money raised on other platforms), campaign creators can throw some money Indiegogo's way.

Outside of the difference in fee structure, it appears that Indiegogo's Generosity and GoFundMe are pretty similar in their offerings. According to Forbes:

Indiegogo has done away with time limits on Generosity, allowing a campaign to be an open-ended amount of time similar to what is allowed on GoFundMe. Generosity also provides integrations so that users can run their campaigns on their own personal websites.

Indiegogo's sights set on broader forms of crowdfunding

FastCompany wrote last month about Indiegogo's interest in launching an offering in the equity crowdfunding space. With equity crowdfunding, backers don't merely donate money in return for some perks, they're actually investing in the businesses they support. Leaders in the space like AngelList, OurCrowd, and CircleUp, are growing very quickly (even before regulation has fully opened equity crowdfunding to everyone). 

Sorry, crowdfunders: The $2.4 mil­l­ion you put up via Kickstarter entitled you to posters, T‑shirts, and prerelease versions of the Rift headset, not equity participation in a landmark deal. But Oculus’s journey from crowdfunding phenom to blockbuster acquisition did get people asking a bigger question. Sites such as Kickstarter and its archrival, Indie­gogo, have had a transformative effect on how startups bootstrap themselves. Why shouldn’t the masses be allowed to invest in new companies and have a chance at realizing a profit?

Indiegogo's launch of Generosity demonstrates the company's intentions to expand into other forms of crowdfunding. Is it just a matter of time before we read about Indiegogo's investment offering?