Crowd Funding: Fact or Fiction
By Audrey Cortex

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A San Francisco woman was arrested last year and held on a no bail warrant from Santa Clara County, Max Szabo, a spokesman for the San Francisco District Attorney’s Office, told India-West. Manisha Nagrani, 40, set up an online fundraiser claiming to have a rare blood disease and asking for donations to her medical treatments. People began donating to help contribute to her treatments through crowd funding sites like YouCaring.com, GoFundMe.com, and GiveForward.com. While most of these pages were taken down pretty quickly, India-West reported that her GiveForward page showed she had received some donations over $1,000 and totaling more than $17,000.

Crowd funding, the practice of raising small amounts of money from many different people, usually on the internet from local community members and sometimes even strangers–to pay for anything from hospital bills, to skydiving, to tattoo removal–has seen a massive surge in recent years. Some of the more popular sites like YouCaring and GoFundMe say they have connected fundraisers to $400 million and $3 billion respectively.

While these platforms are a wonderful way to connect financial need to caring individuals, some are worried this may complicate issues of online fraud. GoFraudMe, a watchdog site for online fraud, was started when animal rights activist Adrienne Gonzalez heard stories about a local cat in Tampa, FL that had been hit by a car and injured.  A crowd funding page was set up to raise funds from the community to help pay for the cat’s medical bills. The only problem was that the Tampa Humane Society had already footed the bill. The fundraiser was a fraud.

Gonzalez said the prevalence of this types of fraud is a testament to the good nature of most people, who would never question someone saying they had a rare disease or that they need money to pay for their child’s funeral. “It would never occur to most people that someone could lie about these things. It’s human nature to want to help.”

GoFundMe spokesperson Bobby Whithorne told the Washington Post “We deploy proprietary fraud prevention technical tools and have multiple processes to verify the identity of campaign organizers.” He said a small fraction of campaigns are bogus. They also guarantee money back to donors who give to fraudulent campaigns.

Gonzalez said verified nonprofits and churches are going through a decline in more traditional types of donations because so much is happening online now, which can sometimes be overwhelming for people trying to discern what is real from what is embellishment or even fraudulent. But the online shift is not necessarily negative, as some nonprofits have seen their online donations go up especially in the tech-savvy Valley.

Diane Hayward, a spokesperson for Second Harvest Food Bank, a Silicon Valley food bank, said their online donations are actually up right now. In the technology-driven era, many donors find it easier to give online. Hayward says their donors mainly give directly through the food bank’s website, eliminating the worry about legitimacy. She urged anyone concerned about the legitimacy of an organization or campaign to look at charitynavigator.org first.

Gonzalez urges would-be donors not to shy away entirely. “These are amazing platforms, you just have to be skeptical and do your research.” Gonzalez says a few things can help people be safe online. Ask questions of the organizers and don’t assume everything you see is real. She also said that sites like GoFundMe aren’t vetting the campaigns, so it’s important not to take their appearance on these websites as an endorsement and make sure to do your own research.