EDITORIAL: Ethics and online fundraising campaigns

Online campaigns to fundraise for everything from schooling to startups to funeral services have become commonplace.

In a 2018 global study of more than 6,000 donors in 119 countries, 41 per cent had given to crowdfunding campaigns that benefited individuals.

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We have seen several launched in Squamish over the years.

Many of these well-meaning campaigns do help deserving locals — like the recent one for Muriel Hanson’s family.

No question, a worthy cause.

And it undoubtedly feels good to help someone in town.

These sites, some of which raise money for entrepreneurial ideas, can also be democratizing. No longer is sitting in a bank office hoping that your great need or big dream will be backed by a financial institution the only way to get the deed done.

But there are also uncomfortable truths potential donors are wise to consider.

Many of the most popular fundraising platforms are for-profit companies. That isn’t necessarily a bad thing, but it should be noted. If donating, check the fee structure to see how much is taken off the top.

One of the most successful Canadian campaigns to date, the 2018 GoFundMe campaign for the victims of the Humboldt Broncos bus crash, raised more than $15 million in 12 days.

Of the donations collected, 2.9 per cent and $0.30 per donation went to processing fees, which added up to almost $483,000.

 [Other platforms may also charge a percentage on top of the processing fee.]

The likelihood of success with these campaigns is not always reflected in the stories the media highlights, such as the Broncos fundraiser. For every successful campaign many more don’t meet their goal. Data on success rates differ, however  37 per cent of Kickstarter campaigns are said to be successful, according to statista.com.  Others are likely similar.

Also uncomfortable is who gets funded and who doesn’t. In the U.S., the financial crisis of 2008 drove many to online crowdfund for medical expenses.

A University of Washington Bothell report, “Producing a worthy illness: Personal crowdfunding amidst financial crisis,” argues that to be successful at crowdfunding requires a level of media and technical literacy.

“Crowdfunding has the potential to deepen social and health inequities,” the report states.

To be blunt, these campaigns can be popularity and marketing contests with the most likable — and most skillfully presented — receiving the most donations while more needy, but less slick go without.

That isn’t the case with more formal charities.

Worryingly, the 2018-Giving Report found that 16 per cent of those who give to individuals through crowdfunding sites, give less to non-governmental organizations and charities.

With a not-for-profit charity, the money would not be triaged by likeability, but distributed by need.

These larger charities also are held rigorously accountable for where the money collected goes.

If the aim of donors is to do the most good, are individual campaigns the best option?

Perhaps, but it is worth a moment of reflection before clicking “donate.”

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