Warning: Make sure you retain the rights to your work
Let me tell you a story…
My grandma has the world's best chili recipe. It's always been my favorite, my dad's favorite, and she is so very proud when she makes it and everyone comes running to get some!
One day grandma decided to try to make a little extra money and she entered her chili in our local "World's Best Chili Recipe contest." The winning recipe got a $1000 prize, and a local soup company planned to put the winning recipe into production and sell it nationwide! Grandma was excited!
Finally, the final day of the contest was here! Grandma stood on stage along with the other twenty finalists as we waited to see who would be awarded the coveted grand prize.
…Grandma lost. She was a little disappointed, but congratulated the winner, gathered her chili pot and recipe and began to walk off the stage. Just then, the contest organizer shouted over his microphone, "Remember contest competitors, when you entered our contest, you agreed to sign over your chili and your recipe to the wonderful company who created this contest and put up the $1000 prize—even it you weren't the winner. Please leave your chili and recipe on the table, they're ours now. Oh, and have a GREAT day! And… be sure to watch your mail for information about our next big contest, The World's Greatest Apple Pie Recipe contest!" I watched grandma walk off the stage, empty-handed, and furious!
Oh how the "fine print" can come back to haunt you!
Sound unrealistic? Well, it's not. I've just described SOME crowdsourcing websites. Not all, but some. The main thing to watch for is…
Make sure you retain the rights to your design work if it isn't chosen
That is only fair. You created the work, if the client doesn't want it, you should get to keep your work. Now, If your work is chosen, then you should be promptly paid and then you can expect to transfer your rights to the client purchasing your logo. That's fair too. Just make sure you know the policy of the crowdsourcing website you are working with.
Crowdsourcing is a business practice where, for example, a company wants a logo or brochure designed. So they put their project needs on a website and offer it as a "contest" or "opportunity" for graphic designers to "enter" their own artwork. What that means for designers is you spend your time creating a logo and brochure and uploading it to the website for the client to view. You may be one out of hundreds who "enter" the design contest. Next, the client picks the design they want and pays that one person. Now you learn, in addition to losing the contest, you also loose all the rights to your artwork. The client retains the rights to your work, even though it wasn't chosen.
These types of websites are growing in numbers. I recommend designers stay far away from them. Instead find real people and real companies that will hire you for your talents and pay you for all your work time.
I don't have a problem with sites that have legitimate art or design contest that pay the winner(s), and then allow the artists and designers to simply take back their work and retain all their rights, copyrights, or ownership. That's fair. In the business world this is called working on spec. Meaning you do some work with the speculation that you may win a client. Companies build the cost of this process into their marketing budget and plans. They understand they may not win all accounts or "contests," but certainly won't lose ownership of all their hard work.
(By the way, my grandma didn't really enter a chili recipe contest, I wrote the story to illustrate my point.)
Again… as often as possible, work for real people you can meet face-to-face, and businesses you can walk into.