Crowdfunding In India Is Safe & Legal. Find Out How.

By: Astha & Chiara

Published On: May 05, 2021

The impact of crowdfunding in India has been undeniably phenomenal; from medical treatment to NGOs to personal causes, online crowdfunding has aided many causes. But being a relatively novel concept in India, people have a lot of questions about crowdfunding. Is it safe? Is it legal? How effective is it? We have tried to answer some of these questions here. Here, we further elaborate on a couple of them:

Is online crowdfunding legal in India? 

The government of India has classified crowdfunding into 5 types, and has clearly stated about the legal status of each:

  • Donation / Social Lending Crowdfunding: contributions made with no return expected; is legal;
  • Pre-order Crowdfunding: made with the intention of obtaining a product later, a form of pre-purchasing; is legal;
  • Reward Crowdfunding: made with the intention of receiving a tangible present in the present or the future; is legal;
  • Debt Crowdfunding: here, lenders or investors meet borrowers or issuers through an intermediary. This intermediary helps in providing unsecured loans from the lender to the borrower; is legal;
  • Equity-based Crowdfunding: involves businesses offering equity in their venture to investors online; is illegal in India 

Take a look at the causes which have successful crowdfunding fundraisers online. These include trusts and NGOs across India; for one, Yash Charitable Trust’s Cafe Arpan run and managed by differently-abled adults chose crowdfunding to begin their operations and generate employment for about 22 differently-abled people. Meanwhile, in the past 3 years, 20,000+ patients - admitted in major hospital chains across India - have taken to fundraising on ImpactGuru to meet their hospital expenses, with the number projected to reach over a million by the next decade. 

Is online crowdfunding safe in India? 


Safety is a matter of grave concern, especially in today’s times and when it comes to online crowdfunding no stone must be left unturned.  Most crowdfunding platforms maintain end-to-end security pertaining to personal information and fund transfers. At ImpactGuru, we have put in place various safety measures and monitoring protocols to ensure the security and privacy of all the users on our platform.

  • We work with the best payment gateways - both in India & abroad - to ensure that your funds are secure.
  • All transactions on ImpactGuru are secure, as our website uses the highest level of SSL encryption currently available on the internet. Similarly, our mobile application is available on both Android and iOS, and provides a seamless and safe experience to our users. The users can check the amount raised for their cause after every donation.

We safeguard the private information of all our platform users.

  • Algorithms are employed by us to continuously monitor data for any fraud patterns

A dedicated in-house team keeps a watch on all user feedback, and works at resolving all issues as they come to their attention.

As of today, online donors have helped in fundraising well over Rs. 1500 crores for diverse causes on our platform. The enormity of funds pouring in for each cause itself highlights people’s confidence on online crowdfunding.   

Besides, there are several crowdfunding examples that have had a huge ripple effect on a global scale. Oculus VR (now acquired by Facebook) and Pebble (now acquired by Fitbit) both began as simple online fundraising campaigns. Lastly, we leave you with an interesting fact: as per Statista, crowdfunding transaction value in China crossed more than $7,000 million in 2020; by comparison, India’s crowdfunding transaction value is at $1.8 million. 

To get started with your venture or cause, read how to choose the right crowdfunding platform.