Crowdsourcing vs. Crowdfunding: What's the Difference?

By: Sammie Schweissguth | Published: July 23, 2013

crowdsourcing-vs-crowdfundingCrowdsourcing and crowdfunding are both innovative new developments that use mass collaboration to get things done. Tapping into the crowd for talent and capital can fuel growth, increase efficiency and make anything possible.

Whether you’re a trendsetting enterprise manager, a global retail giant, an entrepreneur, a progressive business manager, a digital content creation manager, the developer of the next big social media site or iPhone app, or the leader of a disaster relief effort, capitalizing on the vast stores of knowledge and skills available through the crowd can revolutionize the way you accomplish your goals.

Although they are similar, there are differences between crowdsourcing and crowdfunding. The following definitions should help you identify the tools you need to supercharge your efforts with the power of the crowd.


Crowdsourcing is the tool you need to if you’re looking to divide and conquer.

At its core, crowdsourcing is distributed problem solving. Business projects are drilled down to microtasks, which are then distributed to workers with the exact skills to complete them quickly and efficiently. With crowdsourcing, an on-demand workforce tackles projects of any scale to deliver high-value output.

Crowdsourcing provides businesses access to copywriters with the skills to deliver digital SEO content that boosts sales and helps build relationships. Others rely upon programmers, web developers, scientists and more to solve complex problems or make unprecedented breakthroughs. With the power of hundreds to thousands of creative minds throughout the world, microtasks can be performed simultaneously, and projects can be completed more efficiently and cost effectively.

Beyond moving the unthinkable into the realm of the possible, crowdsourcing offers five significant benefits:

1. Access to a flexible workforce

2. Broad access to creative talent

3. Increased cost-effectiveness

4. Increased business capabilities

5. Reduced time to market and faster project delivery


If you’re in need of capital to start or further your efforts, crowdfunding is the tool for you.

Like crowdsourcing, crowdfunding taps into the power of the crowd. Instead of tackling microtasks, however, crowdfunding tackles a type of microfunding.

Crowdfunding platforms bring together an individual or entity in need of funding with community members willing to contribute cash. Although pessimists find it inexplicable, it’s been demonstrated over and over again – people worldwide will share a little (sometimes a lot!) of their hard-earned money to help support a project they believe in – whether that’s an entrepreneurial product or service, disaster relief, a startup, an artist’s vision or something else entirely.

According to Massolution’s 2015CF – Crowdfunding Industry Report, global crowdfunding in 2014 expanded by 167 percent, reaching $16.2 billion in contributions, up from $6.1 billion in 2013. Insiders expect that number to reach $34.4 billion in 2015.

Through crowdfunding, new technologies are developed. Artists create films, music and art. Developers design new games. Disaster relief is empowered with an influx of cash. The innovations crowdfunding makes possible are really only limited by the ways forward thinkers can find to involve the crowd in funding a project.

Regardless of the project being funded, crowdfunding offers a host of benefits:

1. Access to capital with hedged risk

2. Built-in marketing

3. An easier source of funding than traditional channels

4. Introduction to potential loyal customers

5. Free PR and an opportunity for advance sales


Through crowdfunding or crowdsourcing, the businesses, entrepreneurs, humanitarian efforts and individuals of today harness the power of mass collaboration to build future success.

Interested in crowdsourcing, but not sure where to start? Download our white paper, and discover how the power of the crowd can transform your business processes with proven methods that get results.



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