Ummah Crowdfunding

What is Charitable Crowdfunding?

Charitable crowdfunding is a mechanism and vehicle to raise small funds for charitable purposes from a large base of contributors. The innovative element in charitable crowdfunding from traditional giving is the speed, efficiency and reach to millions of people.


Crowdfunding allows people to donate to worthy causes and projects with small sums of money across the world. Similarly, crowdfunding allows campaigners to access a large pool of contributors which are from across the world from one platform.

Charitable Crowdfunding

Charitable crowdfunding is one of the most common forms of crowdfunding. Other forms of crowdfunding include equity-based crowdfunding and debt-based crowdfunding. In equity-based crowdfunding, funders usually acquire a share of a company and seek a profit and return upon exiting the investment in future. In debt-based crowdfunding, funders usually lend funds to a company or project and earn interest on their loan. Charitable crowdfunding is completely different in this regard; charitable crowdfunding is a manifestation of altruism, philanthropy and well-wishing for others.

Charitable crowdfunding does not involve any return or profit, but it is truly praiseworthy and from an Islamic perspective, it is an act of great reward.

Just as an equity-based or debt-based campaigner needs a robust business plan and convincing pitch deck, a campaigner in a charitable crowdfund needs a similar convincing story. Given that people will be donating and not receiving any return, the need and the story of the campaign require genuineness and honesty. The most powerful story and pitch in charitable crowdfunds are those which relay a personal story where there are a clear drive and intent. Funders seek to fill the gap in the campaigner’s life and be the means of transformational impact. This requires transparency, clarity and a clear vision from the campaigner. It is these very principles which tie charitable crowdfunding with other forms of crowdfunding. All forms of crowdfunding require the campaigners to be transparent, be clear in their intent and have a vision for themselves.

The idea is to believe in your vision and make others believe in this vision through the power of your story.

Charitable crowdfunding can take many forms. It includes funding people to build a home, or to pay for urgent medical treatment, or to build a facility, or to build a house and shelter for those sleeping rough, or to empower those seeking independence and self-sustainability, or to simply take care of orphans and those without any support. Charitable crowdfunding comes in all shapes and sizes, with various praiseworthy causes and needs. However, the objective of the funders is always one: make a transformational impact and change in the campaigner.