Crowdfunding and crowdsourcing are words that at first glance have a lot of similarity, but the truth is that they have different meanings and it is better not to confuse them, in this post we will explain the differences.

In advance we want to clarify that they are NOT the same, but if they are related in the way that crowdfunding is a type of crowdsourcing. The best thing is that you continue reading to understand what each one is about.

What is crowdsourcing?

Crowdsourcing is the collaboration of crowds to a company. It is a conglomeration of people who seek the same goal inspired by a person or an organization. The activities generally involve actions, talent, teamwork or capital.

In simpler words, Periodismo Ciudadano defines it as “The transfer of work to the online community”.

This tendency has as a principle that when many people work for the same purpose, it is much easier to solve a problem. That is why it is said that this technique promotes teamwork.

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How does it happen? This occurs when a company (the crowdsourcer) asks for help from its public to solve a problem or summoning tasks to be carried out. This community is also encouraged through prizes, capital or recognition.

According to the PAdigital portal, there are several types of crowdsourcing: creative crowdsourcing, microtrabajo, the wisdom of the crowd, contests, incentive prizes and crowdfunding (our favorite).

What is crowdfunding?

As we have explained before, crowdfunding is collective financing par excellence. It is based on a community making donations to finance a project, emerging business or social cause. It is by far the most popular type of crowdsourcing of all.

Crowdfunding campaigns are characterized by a rewards plan that are small incentives (acknowledgments or advertising material) that motivate the public to invest in the campaign.

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There are also several types of crowdfunding, such as donation, crowdlending, donation crowdfunding, real estate crowdfunding, among others.

Difference between crowdsourcing and crowdfunding

Although both techniques are based on the collaboration of crowds, the main difference is that crowdfunding is collaboration through capital and crowdsourcing is through talent.

And as we said at the beginning of the entry, crowdfunding is a type of crowdsourcing, because when we talk about crowdfunding we refer to a type of collaborative technique that is based on providing capital.

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If you know someone who confuses the term “crowdfunding” and “crowdsourcing” share this post so you know the difference.

We recommend you read: Crowdsourcing: The power of collective collaboration

Working as a team is the key to success