Crowdfunding: Proceed with Caution


Photo courtesy of Pixabay

Last November, right around Thanksgiving, I was struck by this feel-good story I saw on the local news. A young woman ran out of gas on the highway in a not so great area. A homeless man nearby gave her his last $20 to get gas and get to her destination safely.

A few days later, this young woman returned to the location with her fiancée to thank this homeless gentleman and repay him. But their kindness didn’t stop there. They decided to help this man get out of his current situation by starting a Go Fund Me campaign.

The story tugged at heart strings and immediately went viral. The buzz was all over the news. And in just over a week’s time, the couple had raised over $400,000 for this man.

He was humbled and thrilled in the news stories. He wanted to get a safe place to live, a truck and a job. The generosity of countless strangers could make this possible for him.

Fast forward 9 months. Things aren’t going so well. In published news reports this week, this gentleman has reported the couple to Go Fund Me. Allegations of mismanagement of funds and even with-holding of funds have been made. The couple and the gentleman have entered into mediation to try to settle the challenges and figure out what has happened and will happen to the money going forward.

This got me to thinking about how popular crowdfunding has become. In many instances, crowdfunding has become health insurance. It’s really a sad statement on the state of healthcare delivery in our country-that despite the efforts of the Affordable Care Act, costs continue to spiral out of control, without regulation. As a result, when a health catastrophe happens, be it accident or illness, we are forced to put our stories out there, pull at heartstrings and, essentially, beg for help from the kindness of strangers.

We have got to be mindful about crowdfunding from the beginning. Here are some tips for smart crowdfunding:

  1. Decide what you need money for and be clear about this in your crowdfunding request. It’s also wise to share with potential donors what you will do with remaining funds should they not be needed for your individual case. Will they be donated to charity? Invested? Returned to the platform that hosted the fundraiser? Be transparent and truthful in your requests.
  2. Be careful about whom you allow to set up a crowdfunding page for you (or on your behalf.) Talk with this person about responsibilities, who will manage the funds and accounting for spending of money.
  3. Set a reasonable fundraising goal and know (and share with potential donors) how the money will be spent. If you reach your goal, will you end the fundraiser or keep it going? What will you do with surplus funds?
  4. Be sure that your goals and this person’s goals for fundraising and how the money will be spent are on the same page. In the case above, the gentleman really wanted to get off the streets. But it seems like the couple felt the primary goal was that he needed to achieve and maintain sobriety. These are two really different goals.
  5. Remember that while usually funds raised through crowdfunding do not count as income on your income tax (they are “gifts”), they are assets. This can impact your ability to access public benefits like Medicaid, food stamps and SSI—and or result in a loss of these benefits if you are already receiving them.
  6. Think about engaging the skills of a financial planner before you start a crowdfunding campaign. They can help you plan wisely for spending and saving.
  7. Be transparent with your donors. Provide updates about your progress and share your gratitude.
  8. Remember that just because building a crowdfunding campaign is “free” on most of these websites, there are fees involved. This means you will NOT see all the money that is raised. These fees vary by platform, but DO YOUR HOMEWORK. In the case I wrote about earlier, that crowdsourcing platform used takes 2.9 % + charges .30 for each donation. A local news outlet (WPVI Philadelphia), reports that there were over 14,000 donors to the previously mentioned campaign which raised $400,000. That platform will take $4200 for the donor fees and nearly $11,000 of the funds raised. That is how they make their money. Bottom line: you won’t get all the money you raise.
  9. Ask for help from a third party—like your oncology social worker or navigator. We won’t be donating to your fundraising (due to ethical concerns) but we can be that objective third party to work with you and your friends/family who are considering crowdfunding to help you plan how this can work best for you.

Above all, be careful when incorporating crowdfunding into your own cancer experience. It is a wonderful resource when used with clear goals, transparency and honesty. It is rooted in love and compassion and helping another in need. But, do your homework. Ask for help. Protect yourself.

Read more about crowdfunding.


Christina is a clinical oncology social worker who joined the OncoLink team in 2014. Christina blogs about resources available to the cancer community, as well as general information about coping with cancer practically, emotionally, and spiritually. Christina is an avid knitter and spends a great deal of time posting pictures and stories about her three beagles, Linus, Maggie, and Huckleberry. She also loves to travel and cook and is an avid Philly sports fan.