Crowdfunding for Individual Medical Costs Becoming More Common

July 1, 2013; Washington Post

 

NPQ has been watching the process of disintermediation in fundraising, not only in terms of more direct gifts given by donors instead of through intermediaries like a United Way, but also sometimes in that donors can and do now give to individuals directly, instead of through nonprofits who might be helping those individuals.

An article in the Washington Post highlights the growing practice of people raising money over the Internet to defray personal medical costs. It opens with the story of one man with lung cancer who has decent insurance coverage, but as co-payments and out-of-pocket costs mounted, the family turned to the internet and their own network to eventually raise $56,800 from 325 friends and family members. The donations to his fund ranged from $10 to $2,000. The campaign was run on the site GiveForward, which charged seven percent.

This article asserts that such sites are growing and becoming more profitable; for instance, GiveForward raised $225,000 for 359 campaigns in 2008, the year that it was launched, and that has grown this year to 15,000 campaigns raising $20 million.

Other such sites include GoFundMe.com, YouCaring.com, FundRazr.com, and Indiegogo.com, raising money not just for medical costs, but also for tuition, travel, disaster relief, pets’ medical care, and funeral costs. Contributions to individuals through these sites are not tax-deductible, however, and there is little accountability to how the money is spent.

Though crowdfunding executives say that they check for fraud and that it is uncommon, it does occur, which is why many sites urge donors to give only to people they know or are familiar with.—Ruth McCambridge