A Little Caution Goes a Long Way When Donating to a Crowdfunding Campaign

Crowdfunding campaigns are everywhere these days. Even if you’re judicious about how you spend your time on social media, you’re likely to encounter at least one every time you scroll through your feed. And if not there, then your best friend’s emailing you a link to one, asking you to donate in lieu of buying her a birthday present.

A 2016 Pew Research Center survey found that one in five respondents reported having donated to a crowdfunding campaign, with about half giving from $11 to $50 and nearly two-thirds saying they donated to help a friend of a friend or an acquaintance.

Small charities with even smaller marketing budgets frequently use crowdfunding campaigns to support a specific project or need. Individuals launch them to support someone who’s struggling with the cost of their healthcare. They are the embodiment of grassroots fundraising. But as such, they’re not regulated nearly as strictly as conventional modes of fundraising are. How, then, can you determine if a crowdfunding campaign is legitimate and safe to donate to? Read on.

Do you know who’s running the campaign?

First, it’s important to know that the cases of outright fraud where crowdfunding campaigns, specifically, are concerned are “remarkably small,” Devin Thorpe, author of Crowdfunding for Social Good, told Consumer Reports. So, while crowdfunding platforms allow almost anyone to set up their own personal fundraising campaign, the vast majority are legitimate. That said, not every cause is a charitable one. Some use them to raise money to pay for a vacation or a new car.

Which brings us to a critical consideration: Do you know the person who’s asking for the donation? Some crowdfunding sites say they check out campaign organizers, but if you read the fine print, you’re basically giving at your own risk. There are, of course, fraudulent charities, but they have plenty of oversight, which makes them much easier to check out.

Consider giving only to family and immediate friends, which will increase the chances your contribution will be used for its intended purpose. Donating to a campaign run by a third party, instead of the individual who will benefit, also offers an extra layer of oversight.

Is your donation needed?

This may not seem like much of a concern, but Thorpe says that crowdfunding campaigns that take in far more than their stated goal is a major issue. Even if a campaign’s organizer pledges to donate any excess to charity, there’s no guarantee they will, he says.

This may not seem like much of a concern, but Thorpe says that crowdfunding campaigns that take in far more than their stated goal is a major issue. Even if a campaign’s organizer pledges to donate any excess to charity, there’s no guarantee they will, he says.

But donors to crowdfunding campaigns don’t have quite the control over how their money is spent that they may think. Again, it’s a matter of a lack of oversight. If you see the campaign has reached its goal, give elsewhere. There’s certainly no shortage of outlets.