Within hours of the sickening and sordid rampage in Charlottesville last Saturday my Facebook account, emails and podcasts were filled with links to crowdfunding appeals for those injured.

Tom and I don’t do much on crowdfunding so I thought I’d share some notes from observing how it was employed following this tragic and horrific event.

First, some background

There are lots of crowdfunding sites where donors can give to meet specific needs or projects. Sites like Fundly.com, Indiegogo.com, CrowdRise.com or GoFundMe.com — and bypass the ‘middleman’ nonprofits altogether.

One of the largest, most popular crowdsourcing tools for fundraising is GoFundMe. Since its founding 7 years ago activity on that site has produced an estimated $4 billion with approximately 25 million donors contributing to this total.

Anyone can quickly and easily set up an account and mount a campaign and share it with friends on Facebook and Twitter. Set up is free of charge and GoFundMe charges 5% of each contribution as its transaction fee.

According to GoFraudMe, a site that monitors GoFundMe, a new campaign is started every 18 seconds and $4 million is raised on the GoFundMe platform every day. More than 99% of all donations are less than $1,000.

You can get a sense of how GoFundMe works for various causes from this Huffpost piece.

[Those interested in how the crowdsourcing industry deals with the issue of fraud can explore it in this TechCrunch post.]

Crowdfunding and Charlottesville

You can get a first-hand view of the crowdfunding appeals around the Charlottesville events here on the GoFundMe site.

Here are two quick summaries of some results over Charlottesville crowdfunding:

  • In the three days following Saturday’s horror, a quick check of the GoFundMe site indicates that approximately 11,230 donors have given nearly $400,000.
  • According to Recode – In less than 24 hours, more than 8,000 people donated more than $220,000 to the family of Heather Heyer, the 32-year-old killed while marching against the Unite the Right Rally.

Crowdfunding raises questions

I have no idea what the effect of crowdfunding is on ‘legacy’ nonprofits. Some observers claim it cannibalizes giving to established charities. Others believe it acts to spur giving to longtime nonprofits.

The money raised in crowdfunding — estimates range from $1.6 billion + in the U.S. and $2.7 billion worldwide — is minuscule compared with the approximately $340 billion raised by nonprofits in the United States alone

While ‘normal’ giving to established or conventional nonprofits has remained steady at about 2% of Gross Domestic Product, some studies indicate that crowdfunding has increased by as much as 85% a year.

Of course this growth is off a much, much smaller base ($1.6 billion compared to $340 billion in the U.S.), but it sure bears more study.

What is your experience with crowdfunding and how, for better or worse, has it affected your organization?





This article was posted in: Communications, Fundraising philosophy/profession, Innovation, Media usage / trends, Nonprofit management, Online fundraising and marketing, Social media, Uncategorized.
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