How to Know What Crowdfunding Campaigns and Platforms to Trust

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Photo by Clint Patterson

GUEST POST BY DAVID RUIZ

This year is laying it all bare for us: In a moment of unprecedented, global crisis, our local businesses are shuttering at unbelievable rates, renters are being forced into the streets, and children are negligently being shoved into packed classrooms, in large part because our government representatives would rather bicker about how many breadcrumbs to brush off their cummerbunds than actually help the people.

All of this means it’s a big year for us to try and help each other. We’ve risen in the streets, we’ve tipped higher amounts at local cafes and restaurants, and we continue to donate to individual causes on crowd-funding websites — helping alleviate the pain of unexpected healthcare costs, for instance, or sudden funeral expenses.

Sadly, though, we can’t give blindly. We have to learn to give and support smartly, because sometimes our donations aren’t used as expected.

Take, for example, the most popular Change.org petition in history: Shortly after police killed George Floyd in Minneapolis — a horrific act which sparked protests against police brutality and in support of racial justice across the United States — nearly 18 million people signed an online petition calling for those police officers’ arrest.

The petition stood for a good cause, but according to some, Change.org deployed sneaky money-grubbing tactics within it.

According to former employees at Change.org, the online petition giant included potentially confusing language that asked visitors to “become a hero” by “chipping in” and donating money. But those funds didn’t go to support George Floyd’s family or any racial justice nonprofits, the former employees said. Those funds, they said, just went to Change.org.

According to former Change.org employees, the company poorly handled its George Floyd petition by unclearly stating how donations would be used.

“Change.org is siphoning resources away from organizations that are accountable to Black people and equipped to do deeper, long-term, community-based organizing for Black lives and liberation,” the former employees wrote on Medium.

The world of online donations is enormous and, for many of us, confusing. There are not only crowdfunding scams, but whole platforms that might take a huge chunk of your donation.

Here are some tips to safely pledge commitment and donate online:

Check “Platform” Fees

The majority of online petition and crowd-funding platforms are businesses, and as businesses, they’re concerned with making money. That isn’t a huge mark against them. Without money, these platforms can’t pay employees, maintain servers, or continue to host countless crowdfunding projects started by individuals.

But it’s important to know exactly how much these platforms make from every transaction. That’s where “platform” fees come in. Platform fees are the fees that crowdfunding platforms charge on every single donation to help maintain their businesses. Some platforms take a flat fee from every donation, some take a single-digit percentage from each donation, and some use a combination of both.

Crowdfunding platforms should be upfront about platforms fees, and they shouldn’t hide this info in some never-read page on terms and conditions. Fundly, in a good example, has a clear breakdown of fees on its main pricing page.

Even better, though, are the platforms that truthfully forego these fees.

GoFundMe recently swore off implementing any platform fees for US-based projects, which is legit impressive, and DonateKindly also swears off any platform fees. ActBlue, which helps people donate to Democratic candidates, has a similar set up: While it includes a 3.95 percent “processing fee,” it relies on user tips to maintain its own operations.

Finally, the corporate employee funding site Double the Donation has a helpful breakdown of the many fees that platforms charge.

Double the Donation’s breakdown of the sometimes-hidden fees from many crowdfunding platforms, with their own recommendation of which to use.

Understand Payment Processing Fees

Two types of fees get thrown around a lot when discussing crowdfunding: platform fees and payment processing fees. Payment processing fees, unlike platform fees, are unavoidable. These are the costs that businesses send to payment processors for actually taking and processing donations securely.

The takeaway here is that payment processing fees are entirely normal, and they also often hover in the low, single-digit percentages.

Beware Any Online Petition’s Requests for Extra Funds

The Change.org petition for George Floyd that asked folks to donate extra money was not a one-off. The current Change.org petition asking to charge the cops who shot and paralyzed Jacob Blake — which has amassed more than 1 million signatures — also asks petition-signers to “chip in” to “complete your support.”

The Change.org petition to charge the cops involved in the shooting of Jacob Blake also asks users to “chip in” after signing.

The petition makes it clear that the money does not go to the actual cause, but rather to increased distribution of the petition across email, social media, and Change.org’s website. But, in looking at the dollar amounts actually “chipped in,” it’s hard to believe some folks weren’t confused—Change.org asks for a mere $3, but many users offered more than $30.

Don’t Fall for Duplication Scams During Times of Crisis

While we’ve focused on the platforms you engage with, it’s important to note that sometimes, individuals themselves put scams on these websites.

Shortly after George Floyd’s death, at least two men allegedly shot and killed retired police captain David Dorn in St. Louis, Missouri. The tragedy became a lightning rod for racists to bemoan the ongoing protests against police brutality, but it also drew three, separate GoFundMe campaigns, none of which had legitimate ties to Dorn’s surviving family, the St. Louis Police Department said.

These copycat campaigns — and other entirely fraudulent scams — are sickeningly common. Scam artists see a way to make a quick buck out of a tragedy, so they throw up a crowdfunding campaign and watch the dollars flow in before either getting caught or getting away.

If you’re suspect about a certain crowdfunding campaign, search on the Internet if there are any news stories about the legitimacy of the campaigns, and if not, just wait a bit.

We promise, if the crowdfunding campaign is legitimate, the money you eventually send is just as good tomorrow as it is today.