Best Crowdfunding Platforms for Creators

In the olden days, artists like Leonardo da Vinci lived on the support of their patrons. And you had to be super rich or super powerful to be a patron. Later on, artists like Beethoven were able to sell concert tickets to make money (but they still had patrons too). In today’s electronic world, creators continue to get patron support. Except the patrons no longer have to be rich or powerful. They can be ordinary folks who pay a few dollars every month or give just a one-time tip. So, as a creator, how do you set up one of these tipping or donation services? We looked through the crowdfunding services and found the best crowdfunding platforms for creators.

Many Content Platforms Already Have a Tipping or Subscription Function

Most of the major content platforms like Facebook, YouTube, and TikTok already have tipping and subscription functions built into the platform. If you show your content on these sites, it might be more convenient for you to just activate these functions if you can. (Some sites require a minimum follower count before you can use these functions.)

However, these tipping and subscription functions are tied to the platforms. So, if you move from YouTube to TikTok, for example, you’ll have to set up tips and subscriptions all over again.

The crowdfunding platforms we profile in this article work differently. They’re platform agnostic, which means you can use them no matter where you show your content. Sometimes, the platforms will let you link to your tipping/donation platform directly. Other times, you’ll have to give the information out yourself.

It’s a personal preference whether you use the tipping/donation functions native to a specific platform, use one of these specialized tipping/donation platforms, or use both. Often, the only difference is in how you prefer to keep your books.

You Can Always Set Up Your Own Tipping or Subscription Service

Strictly speaking, you can probably set up your very own tipping and subscription service without the help from these crowdfunding platforms. But setting up and maintaining your own service would be time consuming.

Still, if you want to look into it, here are some of the steps to take to set up your own service:

• Sign up with a payment processor like PayPal or Stripe. Once you sign up with a payment processor, you can take tips or subscriptions with a shopping cart just like any e-commerce store. PayPal, Stripe, and many other payment processors all support recurring payments for subscriptions. Here’s our article with a quick summary of PayPal and Stripe’s processing rates.
• Set up special access for your subscribers on a social media platform. Most crowdfunding platforms let creators set up private groups so they can give special attention to their supporters. Facebook, Discord, and Reddit are just some of the platforms that will let you set up private groups for free.
• Consider sending thank-you gifts to your top donors. There are plenty of print-on-demand businesses that can print your logo or artwork on things like pens, mugs, T-shirts, etc. You can order the items and send them as thank-you gifts to your donors. Or you can simply sell the items like any merchandise.

So, why don’t more people do this? It’s a lot of work. The crowdfunding platforms have put all this together for you. For most people, it makes sense to pay a little for the platform to save time and tech-related headaches.

We Looked Through Several Crowdfunding Platforms and Selected Just Three for This Article

Crowdfunding platforms that help folks collect contributions aren’t new. From a technology standpoint, they tend to work in a similar way.

Some of the platforms we considered but decided against profiling include:

• GoFundMe
• Kickstarter
• Indiegogo

These crowdfunding platforms tend to be branded differently. They’re better known for charity contributions, tech startup funding, and similar. Yes, we know that some creative projects like the Veronica Mars movie were funded on Kickstarter. But, for the most part, creators tend to use them less.

We want this article to focus on tipping and subscription platforms for creators. So, the platforms we picked for this article tend to be used almost exclusively by the creator community.

These crowdfunding platforms are:

• Patreon
• Buy Me a Coffee
• Ko-fi

Let’s start with the oldest and probably the most well-known creator-focused crowdfunding platform: Patreon.

Patreon is a Creator-Focused Crowdfunding Platform with All the Bells and Whistles

Patreon is the oldest of the three platforms we profile in this article. (Indiegogo is the oldest of the ones we mention, but we’re not profiling them.) From the start, Patreon has focused on helping creators collect donations to support their work.

Patreon Tiers and Pricing

Patreon is free to sign up. They make money by taking a percentage of your supporter’s monthly payments to you.

Patreon has three tiers of service—Lite, Pro, and Premium. Patreon’s rev share for each tier is 5%, 8%, and 12%, respectively. Naturally, each higher tier gives you more features. Probably the most important feature is that, at the Pro tier, you can set up multiple levels of membership. This way, you can set up a higher level of support where you can give supporters special access or extra programming.

Patreon’s rev share does not include payment processing fees. You’ll still have to pay that from your monthly collections. Your supporters can pay with PayPal or credit cards.

Patreon uses Stripe to process credit cards. Stripe can handle processing in many countries, for many currencies. Their processing rate is different for each country. For the US, Stripe’s rate is 2.9% + $0.30. For US micropayments of $3 or less, the rate is 5% + $0.10.

Patreon will help you collect sales tax, VAT, and other applicable taxes on the donations. They’ll also remit the taxes for you, so you don’t have to worry about collecting and paying use tax at all. Note that, in the US, not every state requires sales tax withholdings for donations. So, sometimes you’ll see that sales tax charge and sometimes not.

If there are glitches with your supporters’ payments like an expired card, Patreon will handle this for you. They’ll also handle your supporters’ other payment related questions for you.

Patreon Services

When you sign up with Patreon, you’ll get a Creator Page. Here, you can give info about your work, explain the different levels of membership your patrons can sign up for, and describe the benefits you’ll provide to your patrons. You can also set up limited-time membership offers to boost supporter sign-ups.

Patreon gives you a lot of options on thanking your patrons. You can set up a Discord server for your paying and non-paying supporters but give your supporters an exclusive section where you give them more attention. Your supporters can also have direct access to you via messages and email.

At the Premium level, you’ll also be able to design and send your supporters unique merchandising as thank-you gifts for their support. For Pro and Premium levels, you’ll get a business analytics dashboard to understand the behavior of your supporters.

If you’ve built your own website, there are a lot of Patreon plugins that can help you set up a special area where only your supporters can access and see articles, videos, podcasts, etc.

Payouts

Patreon can send you payouts of the contributions via direct deposit, PayPal, or Payoneer. You must pay a transfer fee. The least expensive fee is through direct deposit, and it costs $0.25 for transfers inside the US. Other types of transfers have a higher fee. If you’re based outside the US, your fee is different.

Your payout will take 1-5 days to get to you, and you can ask for one payout every 24 hours. Patreon uses Stripe for payouts, so you’ll have to sign up for a Stripe account.

Patreon charges your patrons on the 1st of every month. They recommend you wait until the 5th of every month to request payment, so they can catch any repayment requests. You can set your payouts automatically or manually. Automatic payouts are processed on the 5th of every month.

Memberful is a Patreon Subsidiary Focusing on the Membership Model

We want to briefly talk a little about a company called Memberful.

Memberful focuses on helping folks build a membership business. It is a wholly owned subsidiary of Patreon. Memberful offers more enterprise-like plans suitable for, for example, online newspaper and magazine subscriptions.

Memberful can help you set up several membership tiers. Other features (depending on your plan level) include newsletters, gating content, coupon codes, referral programs, group subscriptions, collect (but not remit) taxes, etc.

If you’re a new creator and don’t want to pay a monthly fee, Memberful has a pay-as-you-go plan where they take a 10% transaction fee. There are 2 paid plans at $25/month and $100/month. You still have to pay a 4.9% transaction fee for each of the paid plans. In addition, you’ll pay a transaction fee for payment processing from Stripe (typically 2.9% + $0.30).

Memberful subscriptions seem to be more suited for larger enterprises than for creator businesses, which tend to be smaller. We include Memberful in Patreon’s profile for completeness, but we think creators are better off using Patreon instead.

Buy Me a Coffee is a No Frills Crowdfunding Platform Focused on Tips and Subscriptions

A lot of creators use Buy Me a Coffee (BMC) alongside Patreon. BMC is better known as a tip collection service, although it can help creators with monthly or yearly subscriptions too.

Buy Me a Coffee Fees and Pricing

You can sign up to BMC for free. Every time you receive a tip or sign up a subscriber, BMC charges you a 5% platform fee.

You’ll also pay a payment processing fee to Stripe. Stripe charges slightly different fees in different countries, but their US rate is 2.9% + $0.30 per transaction. Your supporters can use credit cards, Apple Pay, Google Pay, and certain local payment methods available in some countries. You’ll have to keep track of sales tax collections and remit the taxes to the proper authorities.

You can send the Stripe payments directly to your bank account. If you pick this method, BMC won’t hold your money at all. But you can also have BMC hold your money until you request payout. If you pick this method, BMC will pay out every Wednesday through Wise or Payoneer. The payment can take 7-10 business days to get to you, and you’ll have to pay a transaction fee.

Buy Me a Coffee Services

When you sign up with BMC, you’ll get your own Page. You can use the Page to interact with and thank your donors. You can host podcasts and show images/photos on your Page too. Lastly, you can set up exclusive content for your subscribers through the Page.

You can sell Extras from your Page. An Extra is something your supporters can buy—maybe a 1:1 Zoom call, a commissioned artwork, or an eBook. We even see someone selling tickets to a show. Anything is possible. However, be careful about selling your Extras. On some items, you’ll have to collect sales tax or VAT. BMC isn’t involved in collecting taxes, so you’ll have to set these aside and remit them to the proper state or even country.

Your donors won’t have to sign up for an account before they can tip you. The process is like any one-time purchase, so they won’t have to leave you any personal information, if they don’t want to.

Ko-fi’s Services Lands Somewhere Between Patreon and Buy Me a Coffee

Ko-fi is a crowdfunding platform that’s a little bit like Patreon, a little bit like Buy Me a Coffee, and maybe even a little bit like Etsy. You can take tips, offer subscriptions, take commissions for your works, and even open your own shop to sell your creations.

Ko-fi Service Plans and Pricing

Ko-fi is free to sign up. It has a pay-as-you-go plan and a monthly plan called the Gold plan.

For the pay-as-you-go plan, for donations, you pay only the payment processing fee (to Stripe or PayPal). Ko-fi takes no share. But if you set up membership, Shops, or Commissions, Ko-fi takes a 5% platform fee plus you still have to pay the payment processing fee.

You’ll also have to figure out the sales tax or VAT you may have to collect and remit. Ko-fi offers a sales tax menu to help you find the correct tax percentage and show that at checkout. But you’re on your own figuring out which items you need to collect taxes, actually collecting the taxes, and then remitting the taxes. (Online marketplaces like Facebook Shops, Etsy, and eBay all collect and remit taxes for you.)

If you upgrade to the Gold plan, you pay a monthly fee of $6/month (if paid yearly) and you don’t pay the platform fee anymore. You’ll still have to pay the payment processing fee to Stripe or PayPal, though. You also get other goodies like subscriber analytics and you can set the price for your donations and other benefits.

When someone tips or donates to you, PayPal or Stripe will take out their transaction fee, send Ko-fi its share (if any), and send the rest of the money directly to your bank account. This is true for all the transactions, from donations to memberships to Shop purchases to commissions. Ko-fi doesn’t hold your money.

Ko-fi Services

When you set up a Ko-fi account, you’ll get your own Page. You can set up memberships with different tiers and set different exclusive membership benefits for each tier. The benefits can include exclusive content (image, video, audio, or blog), Discord access, shoutouts, behind the scenes, and other items.

Ko-fi offers a service called Shops. You can sell any type of item through Shops, from physical goods to digital goods (e.g. eBook, wallpaper) to services.

Ko-fi also helps you take commissions for your work. For example, maybe you’re a sculptor. You can use the Commissions feature to invite patrons to commission your work. You can even set a minimum price but activate the “pay what you want” feature so they can pay more.

A Word About Collecting Sales Taxes

Of the three crowdfunding platforms above, only Patreon will help you collect and then remit taxes. With BMC and Ko-fi, you’ll get a little bit of help with things like tax tables. But the tax money will go to you, and you’re responsible for remitting the money to the proper tax authorities at the appropriate time.

If this sounds intimidating, it can be. Fortunately, there are a few things inherent in a creator business that makes dealing with sales tax a little easier. (We’re assuming you’re a US-based creator. If you’re based in another country, you’ll need to research your country’s sales tax or VAT rules.)

If Your Goods or Services is Taxable in Your Own State and You Make an Instate Sale, You’ll Have to Collect a Sales Tax

You’ll have to look up whether you have to collect a sales tax for transactions from supporters in your own state. You probably won’t have to collect sales tax on donations and subscriptions. In some states, you’ll have to collect a sales tax on digital goods like an e-book. In almost every state, you’ll have to collect a sales tax on physical goods.

But if your supporter lives in another state, you might not have to collect a sales tax for any of the transactions.

You’re Probably Exempt from Collecting a Sales Tax for Online Sales

Technically, if you sell goods or provide services in a state, you’ll have to collect and remit sales tax charges in that state. But most creator businesses are very small. Very small businesses who sell online into a state that’s not their home state are called remote sellers. There’s a sales tax exemption for very small remote sellers.

You’re a remote seller in a state if your business doesn’t have a nexus in that state. Usually, this means your business doesn’t have a physical location or employees in that state. Remote sellers who collect less than $100,000 or take less than 200 transactions per year in a particular state do not have to collect and remit sales taxes in that state.

This $100,000/200 transactions limit is a lower limit. Some states have a more generous threshold. So, if you come close to this lower limit for a particular state, go check this table to find the exact limit for that state. Once you exceed the threshold, you’ll have to collect sales tax for that state just like you’re collecting sales tax for your home state.

Note this exemption is only for US sales. If you sell to outside the US, you’ll very likely have to collect a value added tax (VAT). VAT is complicated. To avoid the issue, it’s easiest if you simply do not sell items outside the US.

Or, if you get tired of keeping track and submitting taxes manually, you can set up a shop on an online marketplace like Facebook Shops, Etsy, or eBay. They’ll take care of collecting and remitting the sales tax and VAT for you.

These Crowdfunding Platforms Seem Similar, So Which One Should You Use?

At the end of the day, all the crowdfunding platforms tend to have similar features. On top of that, most of the bigger content platforms like Facebook and YouTube have membership and tipping services built in. So, as a creator, which one should you use?

We think you should pick the one most convenient for your audience to use. After all, they’re the ones trying to give you money. Make it easy for them.

If you already have a large following on a content platform that offers subscription and tipping services, go ahead and use them. You can always sign up for one of the platforms in this article too, if you have the need.

If you have a website or podcast or some other independent platform, you can pick one of the services we profile here. Of the three, Patreon seems to have the best name recognition and offer the fullest subscription service. Patreon’s sales tax related service is worth a lot of consideration too.

But Patreon isn’t built for tipping. So, if you wish to take tips as well, both BMC and Ko-fi can make it easy for your supporters to give. Ko-fi does have a free tier for tipping, so if you’re already signed up with Patreon, Ko-fi might make more sense. Otherwise, you might look at your peer-creators and see which one they take. Then, you use the same one. Your audience will likely have seen the donation service from your peers, so they might feel more comfortable using that service.

Interested in starting and running a small business? Here’s the beginning of our step-by-step guide: What to do right after getting that great business idea.