The paper, aimed at seven to 14-year-olds, had run out of seed funding and urgently needed $200,000 to develop the business and stay afloat. So editor Saffron Howden launched a "Save Crinkling News" campaign on crowdfunding site, indiegogo, warning "without your help we will publish our last issue this week".

Within two weeks, more than $211,000 was raised.

"We are very grateful to get so many people behind us," says a relieved Howden, who set up Crinkling with her own funds a year ago.

Crowdfunding online has grown rapidly during the past decade. From US based sites like indiegogo, GoFundMe and Kickstarter, to the Australian-originated Pozible, OzCrowd and mycause, there has been a proliferation of options for people to seek help for their causes, dreams and personal problems.

According to mycause founder Tania Burstin, crowdfunding is the "modern way of collecting money".

"You use an app on your phone to do your online phone banking. [This] is the same thing."

Burstin, whose site focuses on "personal causes", adds crowdfunding has "very low overheads and it's very fast."

Crowdfunding campaigns range from people asking for funds to make movies, gadgets and craft beer to those wanting to save their local bee colony, pay for cancer treatment or raise money for bereaved families. More conventional charitable pursuits are getting in on the act, too. Chuffed.org is only open to "social causes" like funds for a school in the Democratic Republic of the Congo or nappies for Syrian refugee babies.

Big money is changing hands. While individual donations can be as little as $5, Pozible has raised $56 million since it launched out of Melbourne in 2010. It also collects funds from overseas but co-founder Alan Crabbe estimates at least $40 million of that has come from within Australia. Mycause has raised over $40 million, while Indiegogo, which has campaigns in 223 countries and territories, has raised more than $US1billion.

Conditions vary between sites, but broadly, people create their funding request and set a financial goal. Some then offer gifts or perks – like a public thank you or subscription, while Australia's federal parliament has recently passed legislation to let companies offer equity in a project.

Some campaigns have an "all or nothing" approach, meaning funds are only released if the target is met, as in the case of Crinkling.

Most crowdfunding sites also take a small but significant cut of any funds received. For example, indiegogo charges 5 per cent in "platform fees" plus credit card fees. As Choice asked last year, "are crowdfunding sites the real winners?"

But amid the stories of hope and triumph, there are also tales of crowdfunding scams and failures.

An independent report by the University of Pennsylvania found 9 per cent of Kickstarter projects fail to deliver their promised rewards to donors. And the internet is littered with examples of too-good-to-be-true innovations like the "laser razor" and baby drones.

In the wake of the Westminster terror attack in March, there was concern about fraudulent campaigns for victims' families via JustGiving, while a US woman is facing charges for stealing money from a GoFundMe campaign set up for the funeral costs for a friend's daughter.

Australian Centre for Philanthropy and Nonprofit Studies director Wendy Scaife says crowdfunding is a fresh way to garner community support but cautions donors need to do their due diligence – and search online and ask questions about who they are giving to and what will happen to their money.

"Buyer beware really applies with anything of this nature," she says.

Crabbe says Pozible's campaigners are required to disclose any expected challenges, each project is approved by a "real person" and ID is required.

The company keeps an eye on the amounts of money coming into a campaign, to pick up projects that "don't follow a normal process".

The site's terms and conditions also state that campaigns are not "false, inaccurate or misleading," however, it notes Pozible "cannot be held liable for the actions of a project creator".

US giant GoFundMe carries this disclaimer: "With hundreds of thousands of campaigns, it's not feasible for GoFundMe to investigate the claims stated by each Campaign Organiser".

Not-for-profit lawyer Sue Woodward says while crowdfunding donors should still do their homework, the federal government also needs to fix fundraising laws more broadly. With seven different fundraising regimes in Australia, devised before the internet, the current system is "a complete mess".

"No one is complying because the laws are too complex," says Woodward, a director at Justice Connect.

Last month, more than 100 charities, including Mission Australia, World Vision and the RSPCA, wrote to Prime Minister Malcolm Turnbull calling for simple changes to the Australian Consumer Law so fundraising regulations are nationalised and recent innovations like crowdfunding are properly covered.

Woodward says it is important to maintain public trust and confidence, so acts of charity and kindness are not held back.

"That Crinkling thing is really special."