Crowdfunding is the practice of funding a project or venture by raising monetary contributions from a large number of people, typically via the internet. Three types of entities typically drive crowd funding: the project initiator who proposes the idea; individuals or groups who support the idea; a platform organization that brings the parties together to launch the idea. In 2013, the crowdfunding industry became a multi-billion dollar industry. Below are links to the most popular crowdfunding organizations.
Crowdfunding is a great channel to tap into funding to improve already existing projects, develop prototypes, to set up volunteer campaigns, or even as a source of scholarship money for education or training. Typically, the project initiator is looking to provide a social benefit to those who support the idea.
John Jacoby of East Troy provides a great example of using crowdfunding for him to improve BuddyPress, bbPress, and GlotPress for the sake of the community of users of this community software platform. You can find more information about this project at his WordPress Development Story link.