The hidden inequities of GoFundMe fundraising

[UNITED STATES] In recent years, GoFundMe has become synonymous with grassroots fundraising, offering a platform for individuals to seek financial support for various causes. With over $17 billion raised across 200 million donations by mid-2022, the platform's reach is undeniable. However, beneath the surface of heartwarming success stories lies a more complex reality: the money raised through GoFundMe often fails to reach those who need it most.

The Illusion of Equal Opportunity

GoFundMe's premise is simple and appealing - anyone can create a campaign and potentially receive donations from around the world. This democratization of fundraising seems to level the playing field, but in practice, it often reinforces existing inequalities.

Digital Divide and Access

One of the primary barriers to equitable fundraising on GoFundMe is the digital divide. Many low-income individuals simply don't have reliable internet access or the technological literacy required to create and manage an effective online campaign. This digital barrier effectively excludes some of the most vulnerable populations from accessing this potential source of financial support.

The Power of Networks

Successful GoFundMe campaigns often rely heavily on the organizer's existing social networks. Those with larger, more affluent networks are more likely to reach their fundraising goals quickly. This advantage disproportionately benefits individuals who are already relatively well-off, while those with limited social connections struggle to gain traction.

The Visibility Challenge

In the vast sea of GoFundMe campaigns, visibility is crucial. However, the factors that determine which campaigns gain traction often have little to do with genuine need.

Algorithm Bias

GoFundMe's recommendation system, like many digital platforms, uses algorithms to determine which campaigns to highlight. These algorithms tend to favor campaigns that are already gaining momentum, creating a self-reinforcing cycle where popular campaigns become even more visible while others languish in obscurity.

The Emotional Appeal Factor

Campaigns that tell compelling stories or feature photogenic subjects often perform better, regardless of the underlying need. This creates an uneven playing field where those who are able to craft emotionally resonant narratives or have visually appealing situations are more likely to succeed.

The Uneven Distribution of Funds

Even when campaigns do raise significant amounts, the distribution of these funds can be problematic.

Concentration of Donations

Research has shown that a small percentage of campaigns receive the majority of donations. According to one study, the top 5% of highest-earning campaigns claimed about half of all dollars raised on the platform. This concentration of funds means that while some campaigns go viral and exceed their goals, many others receive little to no support.

Geographical and Demographic Disparities

Fundraising success on GoFundMe often correlates with geographical and demographic factors. Campaigns originating from wealthier areas or benefiting individuals from more privileged backgrounds tend to raise more money. This trend exacerbates existing socioeconomic disparities rather than alleviating them.

The Hidden Costs of Crowdfunding

While GoFundMe presents itself as a free platform, there are hidden costs that can eat into the funds raised.

Transaction Fees

Although GoFundMe eliminated its platform fee in 2017, there are still transaction fees associated with processing donations. These fees, typically around 2.9% plus $0.30 per donation, can add up, especially for smaller campaigns.

Tax Implications

Donations made through GoFundMe are generally not tax-deductible for the donor, which can discourage larger contributions. As noted in a recent Wall Street Journal article about GoFundMe campaigns for Los Angeles fire victims, "Contributions to individuals aren't tax deductible, so donating to personal GoFundMe campaigns won't qualify. Most taxpayers take the standard deduction anyway, so charitable contributions don't factor into their tax returns."

The Burden of Self-Promotion

Creating a successful GoFundMe campaign requires more than just setting up a page. Organizers often need to engage in constant self-promotion and marketing to keep their campaign visible.

Time and Energy Investment

For individuals already struggling with health issues, financial stress, or other challenges, the additional burden of managing a fundraising campaign can be overwhelming. This requirement for active campaigning can disadvantage those who are most in need but least able to dedicate time and energy to promotion.

Emotional Labor

Sharing personal struggles publicly and repeatedly asking for help can be emotionally taxing. This aspect of crowdfunding can be particularly challenging for individuals from cultures or backgrounds where asking for financial assistance is stigmatized.

The Systemic Issues GoFundMe Can't Solve

While GoFundMe has undoubtedly helped many individuals in times of need, its success also highlights significant gaps in social safety nets.

Healthcare Funding Crisis

Medical expenses remain one of the largest categories on GoFundMe, reflecting the ongoing healthcare crisis in countries like the United States. The platform's CEO, Tim Cadogan, has acknowledged this issue, stating, "We don't view GoFundMe as a substitute for more comprehensive access to health care for everybody."

Normalizing Crowdfunding for Basic Needs

The prevalence of campaigns for basic needs like housing, food, and education on GoFundMe normalizes the idea that these fundamental rights should be subject to the whims of crowdfunding rather than guaranteed by social systems.

The Responsibility of Platforms

As GoFundMe continues to grow, questions arise about the platform's responsibility in addressing these inequities.

Transparency and Data Sharing

GoFundMe has been criticized for a lack of transparency regarding the success rates of campaigns and the distribution of funds. More open data sharing could help researchers and policymakers better understand and address the disparities in crowdfunding outcomes.

Ethical Considerations

The platform faces ongoing ethical challenges, such as how to handle controversial campaigns or verify the legitimacy of fundraisers. These issues highlight the complex role GoFundMe plays as a mediator of charitable giving.

GoFundMe and similar crowdfunding platforms have undoubtedly provided a valuable tool for many individuals in need of financial support. However, it's crucial to recognize the limitations and potential negative consequences of relying on such platforms as a social safety net.

The reality is that GoFundMe's success often mirrors and reinforces existing societal inequalities. Those with the resources, networks, and skills to create compelling campaigns are more likely to succeed, while those in the direst need may struggle to gain visibility and support.

As we continue to grapple with systemic issues like healthcare access, income inequality, and inadequate social services, it's important to view crowdfunding as a stopgap measure rather than a solution. True equity in fundraising and support for those in need will require broader societal changes and robust public systems that ensure everyone has access to basic necessities and support in times of crisis.

While GoFundMe can provide crucial help in individual cases, addressing the root causes of why so many people need to turn to crowdfunding in the first place remains an urgent societal challenge. Only by tackling these underlying issues can we create a world where platforms like GoFundMe are truly supplementary rather than essential for meeting basic needs.