Crowdfunding for Sports: Is That a Thing?

Crowdfunding can help athletes, teams, and clubs to raise funds for projects, refurbishing facilities, buying new equipment, or covering costs for running events. 

Crowdfunding for sports is a great way for athletes to get the needed funding, and for their fans and sponsors – to give money for a cause, support their favorites, and in some cases, to get valuable rewards and even advertise their brands through funding local clubs and teams. 

Picking a crowdfunding model for your sports investment platform

There are several crowdfunding models that work for funding sport-related endeavors, but the most relevant for athletes, teams, and clubs are:

• Donation-based: this is when people are encouraged to fund a project without expecting anything in return. For sports, it works for those who have a large community of followers and people are ready to contribute to support their projects.
  
• Reward-based: people are encouraged to contribute in return for a reward. Normally, rewards depend on the amount donated and can be signed stickers, tickets to events and training sessions, named seats, certificates for exclusive items, mentions on social networks, etc. The higher the funding sum the better the reward.
  
• Equity crowdfunding for sports is a bit less popular due to its complexity. To raise funds under this type of crowdfunding, companies may sell shares to their community members. These shares are known as community shares. Each community member can become a shareholder of their favorite club for as little as $20, with the maximum limitation of $100,000 per shareholder.

Community shares cannot be sold or transferred to somebody else, they can only be withdrawn by the investor under conditions that don’t harm the club. 

While this is a perfect option to raise money and get support from a community, this option isn’t suitable for any sports organization. Only Co-operative societies or Community Benefit Societies are permitted to sell community shares. Therefore, to access this option, a club shall change its legal structure to one of the mentioned which is connected with additional expenses. This is justified only if:

• The community is strong and can provide the needed funding after that.
• Club owners have a clear idea of how they are going to market the club to attract potential investors.
• Club owners are ready to engage shareholders in decision-making processes and know what share of control they are ready to give to shareholders.

By investing in community shares, one shall also understand that returns on community shares are paid to investors only when the club or group feels it is ok to do so. Therefore, in matters of profit, this investment type may be not the top option.

Community shares give investors voting power, however, it is based on a “one member one vote” principle which doesn’t benefit bigger investors. 

Community shares are a risky investment, however, you can count on a tax relief. Investors can claim up to 30% back, so that can be something to consider when investing in this type of asset.

How sports crowdfunding platforms earn money

Many sports crowdfunding platforms do not charge fees for launching a fundraising campaign or investor account opening, but most platforms charge a percentage from raised funds which varies from 5 to 8%.

Some platforms such as Pledgesports include promotional materials and reviews of sports betting websites and applications, and offer personalized packages for those who want to advertise their brands by assisting athletes. In promo packages that come at an additional cost, various options may be included such as:

• Brand alignment
• Sports sponsorship options with direct access to clients
• High impact publicity, etc.

Popular crowdfunding platforms for sport projects

Now, let’s have a look at the most popular crowdfunding platforms that help to raise funds for sports projects.

PledgeSports

PledgeSports is a platform dedicated exclusively to sports fundraising. It was launched in 2014 by Seedrs. 

The platform helps athletes, teams, sports clubs, and sports brands to raise funds for their needs. The platform doesn’t charge fundraisers, and assists in promoting crowdfunding campaigns by advertising them on the platform’s social networks. Even when a campaign finishes, people can continue donating. 

The platform charges 5 to 8% from the sum raised depending on a project. If the funds are raised for charity purposes, only 5% from the raised funds are charged. Additionally, a payment processing fee of 2.4% is applied.

Sportfunder

Sportfunder was launched in 2012 in Canada to assist athletes, teams, and clubs from over 40 countries to raise funds. Now, the platform is present in all the major markets including the European, Australian, and Asian. 

All the fundraisers can use the platform for free, with no membership or setup fees, only a payment processing fee (up to 3%) is charged. Other fees (up to 5% from the raised capital) also may be charged depending on who is raising funds. 

Sporftunder operates on a reward-based basis, so fundraisers are recommended to offer some rewards to their sponsors:

• Placing a sponsor’s logo on the athlete’s page
• Mentioning them on social networks, or similar. 

Fairplaid

Fairplaid was launched in Germany in 2013 to help athletes and teams get funding for equipment, coaching, trips, etc. With the minimum investment of 1 Euro, the platform enables anybody to donate funds in the support of a favorite athlete or team.

The platform charges 7% from the raised funds, and 4% for processing of payments.

Along with hosting a campaign, the platform provides consulting on how to make it successful as well as assists with its advertising on social networks.

Since its launch, Fairplaid has helped to raise over 19 mln Euros for over 320 campaigns.

Plumfund

Plumfund was launched in 2015 by the founders of Honeyfund, a unique gifting platform. Plumfund helps to raise funds for teams and sports clubs. Instead of creating complex fundraising campaigns, the platform collects funds from team members, sponsors, team supporters, and fans, and puts them in a single easily accessible pool. 

The platform charges only a payment processing fee of 2.59% + $0.49 for payments through PayPal, and 2.8% + $0.30 for payments with a card, other fees may apply as well.  

Unlike the majority of platforms, Plumfund is focused on giving & receiving gifts rather than profiting from a donation.

How to launch a sports crowdfunding platform with LenderKit

Launching a sports crowdfunding platform quickly is possible using a white label crowdfunding software offered by LenderKit. You can pick whether you want a donation, a reward, or an equity-based platform or even if you prefer to integrate multiple investment flows and crowdfunding models.

A comprehensive set of already available features allows you to launch your sports crowdfunding platform in a condensed timeline. With LenderKit, all design and functionality elements are customizable to help your business create a dream platform that aligns with your brand and business objectives. 

To learn more about LenderKit and how it can benefit your business, please schedule a live demo session or get in touch with our sales team.