What is donation-based crowdfunding?

A donation-based crowdfunding campaign is one in which there is no expected tangible or financial return to the donor or capital contributor.  Many people routinely donate to charities and nonprofits online or other online fundraising campaigns that assist victims of natural disasters or persons who need financial assistance for medical bills.

The primary difference between a securities-based or rewards-based crowdfunding campaign and a donation-based crowdfunding campaign is the presence of some form of expectation of a return on capital. In a donation-based campaign, there is no expected tangible or financial return on capital.

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