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 Soon Wenerd, 30, was swamped with more selfish requests: people
raising money not for anything high-minded or charitable, but for
spring break trips, honeymoons and credit-card debt.
"It has taken on this air of panhandling to me," said Wenerd.
For anyone with a Facebook or email account, it is likely a familiar
story. More and more family members, or friends, or friends of
friends, or even strangers, are asking for help with the rent, or to
fund a trip.
The crowdfunding field has ballooned to over $34 billion in just a
few years, according to the consulting firm Massolution, up from
$880 million in 2010, so it is perhaps inevitable to see some
backlash.
"You know what people did before GoFundMe? They worked," said Damen
Bell-Holter, a professional basketball player from Alaska who now
plays overseas in Finland. He is among those who finds himself awash
in crowdfunding requests, and is sick of them.
"Help me with my rent, help me with my school bills. I understand
tragedy occurs, and some people legitimately need help - but others
are just lazy," he said.
The floodgates to silliness opened when people figured out that the
online interface allows them to reach out and ask for things they
might not have the temerity to ask for in person, said Amir Pasic,
dean of Indiana University's Lilly Family School of Philanthropy.
Even Kickstarter (http://kickstarter.com), which has successfully
funded over 102,000 projects toward the goal of bringing "creative
projects to life," helped one man raise over $55,000 so he could
make potato salad.
GoFundMe (http://gofundme.com) has raised $2 billion in the last
year, with some users currently seeking money to buy bottles of
Hennessy cognac, Yeezy sneakers, and breast implants.
Indiegogo (http://indiegogo.com) has raised over $800 million for
projects since its inception - including ventures like a bug-killing
salt rifle, 13 dates for a British bachelor named Tom, caffeinated
toothpaste and an attempt to bail out Greece.
These sites can also be fertile ground for potential scams.
Washington State Attorney General Bob Ferguson calls the phenomenon
"crowdfunding theft," and last year ordered restitution to donors
who had paid up for one project of horror-themed playing cards and
got zilch in return.
Vigilante sites have also cropped up, like Kickscammed (http://kickscammed.com)
and GoFraudMe (http://facebook.com/GoFundMeGoFraudMe), to police
crowdfunding projects which do not follow through on what they
promise.
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The main source of conflict: Once the funds are dispersed, there is
not a lot of transparency. When famed girl group TLC raised more
than $430,000 from fans last year to put out new music, the
musicians faced backlash when no album emerged.
GIVE SMARTER
To effectively sort through donation requests, potential donors need
to avoid information overload, which can make it hard to discern
between the truly needy and the personal larks. Research shows when
donors get bombarded with direct-mail requests for money, Indiana
University's Pasic said, they do not get more generous - they just
get really irritated.
Some stop giving altogether. If you get a crowdfunding request and
do not know the person that well, "just ignore it," advised
financial planner George Gagliardi of Lexington, Massachusetts.
If the situation is more delicate - such as a close friend or family
member - Gagliardi suggested dividing the requests into varying
levels of urgency, from "dire, life-threatening situations" all the
way to "luxuries." Then you can make the call depending on the
particular case, and your own financial ability to contribute.
The final step is to take the request out of the digital world. Ask
yourself: Would this person actually ask for money to your face?
"People are using the cover of technological distance, and just
hoping people will make quick donations on the fly," said Pasic. "If
there is a genuine need, and a real case to be made, then try
picking up the phone and talking with them about it."
(Editing by Beth Pinsker and Jonathan Oatis)
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