What is crowdfunding?
Crowdfunding is raising money directly from a large number of people all putting in relatively small amounts of money.
Who can be a crowdfunder?
Theoretically anyone can be a crowdfunder, contributing or donating to a business, new idea or venture of their choice, however some crowdfunding transactions are more akin to an investment product and are more suitable for sophisticated investors using a regulated platform to raise equity. What is important is that contributor and donors can easily understand what they are putting their money into, what the risks are, where they are paying fees and what the possible return might be (if any). The My.Regional.Community website does not allow for any equity or debt based investments so no financial returns are available via our website.
Who can be a campaigner?
We encourage campaign submissions from across the region. The only criteria we ask be met are the following:
a) All campaigns must identify a suitable individual or Community Venture that is undertaking the proposed project
b) Campaigner must specify the type of campaign type and the expiry date of the campaign
c) A full description of the campaign including what the funds are being used for and if any rewards are being provided;
d) Provide evidence that the project has a benefit to the wider community. This could be employment potential, community representation or some other benefit to the public;
e) The site must not be used to solicit or recruit volunteers or employees.
Campaigners must register as a user on the site before they can submit a campaign for approval. Final approval will be at the sole discretion of the team at My.Regional.Community.
Is there a minimum or maximum amount for a contribution or donation?
These will vary according to the crowdfunding platform and campaign you use and want to support. In some cases investments and donations can be as low as $1, with no ceiling on the amount you invest, others may cap the total investment you can donate. It really depends on the nature of the project you are putting your money into and the risks you are prepared to take with your money.
Is a contribution or donation tax deductible?
When you make a Contribution you will not automatically be provided with a receipt suitable for tax purposes as not all Contributions will be deductible. In some cases Contributions made to a Community Venture will be tax deductible. It is your responsibility to confirm whether a Community Venture has deductible gift recipient status (DGR status) allowing you to claim a tax deduction.
What are the main risks?
Your money is at risk, and there are never any guarantees that you will get the returns or rewards indicated. Debt investments tend to carry lower risks than equity investments for example, but really all investments have different risk profiles and you should always read any campaign material in full and do your research before investing.
As a consumer how am I protected?
Most crowdfunding opportunities fall outside any ASIC legislation. As a crowdfunder you are making your own assessment of opportunity and risk.
>What are the different campaign types?
Campaigns are organised as either “All-or-Nothing”, “Keep-it-All” or “Voting” campaigns.
All-or-Nothing campaigns will not receive any net funding until they have reached the minimum amount specified on their campaign profile. Contributions to an “All-or-Nothing” campaign will be charged to your account at the time of making your Contribution but will not be paid to the Community Project until the minimum amount is reached.
Keep-it-All campaigns receive all funds contributed to their campaign. Contributions to a Keep-it-All campaign will be charged to your account at the time you make your Contribution. Amounts will be placed into a trust account and the net amount paid to the account of the Community Venture responsible for the Community Project within 14 days of your Contribution.
Voting campaigns do not receive funding but are seeking feedback as to the interest or viability of a particular Community Project.
What is the difference between a contribution and an investment?
A donation is essentially a gift: you give money to a project that you like – they may or may not offer a reward such as the product, a T-shirt or your name being included in credits etc.
An investment is where you pay money to a company in the hope of making a return over time.
Why are some crowdfunding platforms regulated and not others?
Every crowdfunding platform has made its own assessment as to whether it needs to be regulated by ASIC or any other body in order to conduct its business. Debt and Equity based platforms are required to be registered however the My.Regional.Community site is only a Donations / Rewards based site only and is not setup to accept any lending or equity type investments.
What happens if a business or venture I invest in or donate to goes bust or doesn’t proceed?
Your money is always at risk and if you make a contribution and the project doesn’t proceed you risk losing some or all of your funds depending on the type of campaign. Contributions to an “All-Or-Nothing” campaign will not be distributed to the Community Venture until they have reached their anticipated target. If they fail to reach that target in the specified timeframe all funds will be returned less any fees charged by an external party such as the Stripe as the credit card merchant.