Recent natural disasters and current events — Tropical Storm Henri in the northeastern United States, floods in Tennessee, wildfires in the west, in addition to the plight of Afghan refugees — have resulted in numerous online fundraising campaigns. Crowdfunding sites such as GoFundMe and IndieGoGo (both BBB Accredited Businesses) are used to help share the stories of individuals, families, and communities in need and to solicit funds from generous donors.
GoFundMe reached out to BBB to share information on how to determine if a fundraiser is legitimate and about their centralized hub for identifying verified fundraisers related to the storm. IndieGogo also has information on how to evaluate a campaign.
“As the process to set up a crowdfunding account to raise money is relatively simple, those with questionable intentions also use it as a way to line their pockets,” Mechele Agbayani Mills, President and CEO of BBB Central East Texas said. “Thant’s why so it’s important to ask questions about the cause and the fund before making a donation.”
BBB urges consumers to consider the following when considering making a contribution on a crowdfunding platform:
Do your homework. Review the fundraiser page. Does the fundraiser have a clear title, image and story? Ask questions and know exactly what you are supporting before contributing towards any cause. How is the organizer related to the recipient of the funds? Also go to bbb.org if the organization is affiliated with a company, and do an internet search for negative information about individuals involved with the organization. Always investigate before you give.
Understand the use of funds. Find out how much of your donation is going to the charity. What is the purpose of the fundraiser and is the organizer transparent about how funds will be used?
Check for hidden fees. Some crowdfunding websites have additional processing fees which can be tacked on for credit card handling. These fees can be added on top of your donation or taken out of what money you contributed to your particular cause.
Understand the terms and conditions. Make sure you read and understand the terms of the organization and the conditions of their fee structure. It is important to understand what the website is asking of you and what you are signing up for before making a donation.
Ask if the donation is tax deductible. When giving to a crowdfunded charitable cause, keep in mind that contributions are typically not tax deductible. If it is important to you that your contribution can be deducted from your taxes, you may want to choose another outlet for donation.
Report suspicious accounts. Many websites will allow you to report a suspicious project. Be sure to provide as much detail as you can (links to the page with the concern, links to an account, details of the problem, etc.).
BBB tips on charitable giving after a natural disaster and what to know before giving on a crowdfunding site. To report fraudulent activity or unscrupulous business practices, please call BBB at (903)581-5704.