Crowdfunding, Tragedy, and the Changing Face of Giving

Fundraising for a good cause has been around for a long time. It is still one of the primary sources of financial support available for nonprofit organizations trying to do good in the community. In fact, even now, individual giving eclipses corporate, foundational, and bequest giving all together. However, due to the increasing crowdfunding trend, the way that individuals give is changing.

Let’s take a look at the Milwaukee shooting as an example. In early August of this year, a man entered a Gurudwara in Milwaukee and wounded multiple service attendees as well as a police officer who eventually ended the spree. Shortly thereafter an Indiegogo campaign page was launched with a deadline of August 31st. The campaign was launched by a team of individuals who partnered with Direct Relief International to raise money to support the families of the victims. The goal was $25,000, by the end of the month, the crowdfunding campaign had raised more than $165K.

This wasn’t the only fundraising response, however, Milwaukeeans also started raising money by starting Solidarity Café to fundraise with HonduranJoe.com where 25% of all coffee sales were donated to victims. And another crowdfunding venture entitled We Are Sikhs, which is looking to raise $400K in the next three months (and is already halfway there). Money and resources are also coming in from Sikhs for Justice, the American Red Cross, and the Salvation Army that people could choose to donate to.

The Indiegogo campaign and WeareSikhs campaign, however, pledge transparency in their distribution of the funds and are working to absorb all administrative costs and it is not surprising to me that these have been the campaigns with the most success.

This article in The Guardian presents some interesting thoughts on the matter, suggesting that perhaps crowdfunding is diverting money that might otherwise go to established charities and nonprofits.

The article cites, for example the families of victims in the Aurora shootings from July who are outraged at how the Victim Relief Fund has managed the almost $5M generated in online donations, saying that they have no say in how the money is managed or disbursed. Whereas, individual crowdfunding campaigns by the victim’s families, like Farrah Soundani’s (much-conflicted) GoFundMe campaign or Petra Anderson’s sister who raised more than $260k on Indiegogo, are able to access those funds early and easily. This might, of course, contribute to the frustration with the Victim Relief Fund

Will we eliminate the need for organized nonprofits all together? How will we continue to ensure that those who benefit from their crowdfunding benefactors will truly manage and receive the money in responsible ways?

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