Crowdfunding comes at a cost

Fees range from 3 to 10 percent

SAN ANTONIO – Online crowdfunding is an increasingly popular way for people to raise cash, whether they need money for a class trip, to launch a business or for medical emergencies. But the websites that make it easy for friends, family and strangers to donate to a cause are businesses, and that means there are various fees that can cut into the donations.

Seneca Dunmore is a fan of the crowdfunding craze.

"I reach out to all my people, you know, on social media -- my family, email, everyone I know," she said.

Dunmore recently used GoFundMe to help pay for a medical mission trip to Africa with an organization called Behtel's Global Reach.

"We set up basically a medical camp," she said. "They had a huge scare with malaria and yellow fever and typhoid this year. We were able to partner with some of the local clinics there to get them free vaccinations."

Dunmore raised nearly $6,000 using GoFundMe. But, not all of the money went directly to the cause.

"I probably paid $400 to $500 in fees," she said.

The four most popular crowdfunding websites charge fees. After all, they are businesses, not charities.

On GoFundMe, the individual would get $92 of that  $100. The rest goes to fees.

On Kickstarter, $91.80 would go to the individual.

On Crowdrise, the person would get $95 or $97, depending on the type of account.

And, on Indiegogo, the $100 donation becomes $90 to $92.  Although on Generosity by Indiegogo, for personal causes, only a payment processing fee is charged. So, the cause would get $96.70.

Leah Napoliello with the Better Business Bureau of Greater Houston and South Texas said people setting up a fund on any website do their homework.

"Take time to research the site, all of their policies," she said. "Also, search for any other reviews online that other customers have posted."

Even with the fees, Dunmore prefers crowdfunding as a method for raising cash because she says it lets donors see their money in action.

"The feel like they are part of the experience and journey," she said.

Some websites do refund donations if the fundraising goal is not met. That is something else fundraisers and donors should research.


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