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

By: Hitesh & Chiara

Published On: December 11, 2020

The impact of crowdfunding in India has been undeniable; from medical treatment to NGOs to personal causes, online crowdfunding has managed to help many causes. But being a relatively novel concept in India, people have a lot of questions about crowdfunding. We have tried to answer some of these questions here. Here, we further elaborate on a couple of them:

  1. Is online crowdfunding legal in India?


Fundraising Companies Solutions & crowdfunding laws

The government of India has classified crowdfunding into 5 types, and has been clear 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


If you need a bit more convincing, why not have a look at the causes which have successfully raised funds online? These include trusts and NGOs across India; for one, Yash Charitable Trust’s Cafe Arpan (which is run by differently-abled adults) chose crowdfunding to begin their operations. Meanwhile, in the past 3 years, 10,000 patients - admitted in major hospital chains across India - have raised funds on ImpactGuru to meet their hospital expenses, with the number projected to reach a million by the next decade. 

  1. Is online crowdfunding safe in India?



Online safety is a matter of grave concern, especially in today’s times. As technology platforms, crowdfunding platforms - both in India & abroad - try and ensure safe & secure processes. 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; especially when it comes to checking the amount raised for their specific causes. 
  • 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, donors from more than 165 countries have helped raise more than Rs. 1500 crore for diverse causes on our platform. This in itself is one indicator of the trust placed in online crowdfunding by all the users concerned. It helps that globally, crowdfunding has helped create some amazing stories: Oculus VR (now acquired by Facebook) and Pebble (now acquired by Fitbit) both began as simple online fundraisers. 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. 

Read how to choose the right crowdfunding platform.

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