CharityWatch CEO & Executive Director, Laurie Styron, recently spoke with VERIFY about crowdfunding websites and their donation processing fees. Most donors hope that when they make a donation through one of these websites, 100% of what they give will make it to the intended recipient of their gift. But is this a realistic expectation? Styron weighed in on the issue for VERIFY.
"'Maintaining the programming and security necessary to process transactions safely and to protect a donor's data is expensive, so charging reasonable fees to provide such services is justified,' Styron said."
"Styron said people should ask themselves the following questions when donating to a crowdfunding campaign:
*What are the transaction fees and are they reasonable based on what other platforms are charging as well as my comfort level?
*If the fundraiser is a registered public charity, can I avoid donating through the crowdfunder and donate directly to the charity instead?
*Does the end recipient of my donation have control over when they receive the funds, or does the platform control this? How long will my donation be held before the intended recipient receives my donation?
*Am I sure this is a legitimate fundraising campaign? Do I know the victim or other intended recipient personally, and do I trust them and their story? Did I do a reverse image search to see if the images or language being used for the crowdfunding campaign have been lifted from a legitimate campaign by a scammer?"
According to gofundme, "there's no fee to start or manage" a fundraiser. However, it does charge transaction fees of 2.9% of what is donated, plus 30 cents per transaction. For example, if five donors contributed a total of $500 to a particular fundraising campaign, a total of $16 in fees would be deducted by gofundme before passing on the balance to the person or charity raising funds.
Transaction fees may be the least of a donor's worries when donating through crowdfunding websites like gofundme, Kickstarter, Indiegogo, or Facebook. Read the below articles to learn more about additional factors to consider before donating to a crowdfunding campaign.