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The definition of "fundraising" (or fund raising) is "the process of soliciting and gathering contributions as money or other resources, by requesting donations from individuals, businesses, charitable foundations, or other agencies." So, with this definition in mind, online fundraising is the process of soliciting funds and gathering contributions by requesting donations ONLINE.
The best part about online fundraising is that it doesn't exclude any of the old tactics that traditional fundraising held dear. You'll still want to establish goals, find ways to clearly communicate your cause, promote your fundraising event, and reach out to family and friends to gain support – see fundraising tips for more guidance. Online fundraising doesn't mean you can't still make phone calls or walk to the neighbors house to request a donation... but online fundraising goes beyond the old fundraising strategies. The online fundraising software available today helps organizers streamline the fundraising process by implementing tools to help manage all the moving parts of a fundraising campaign, and these tools also make the process of collecting donations easier for participants.