64ºF

What you should know before you give to crowdfunding campaigns

One in five people donated through crowdfunding

SAN ANTONIO – In the wake of devastating hurricanes and the Las Vegas mass shooting, crowdfunding campaigns are popular. Online platforms have become a fast and easy way to raise money and support someone in need, but before you open your wallet, there are some things to consider.

Over the years, Ann Niemeier has seen a number of fundraising campaigns come across her Facebook feed, and she's been happy to help.

"I've seen some people in need of medical expenses and, of course, if something tragic happens to a family and their children need to be taken care of ... (these are) things that really pull at my heartstrings," Niemeier said.

She's not alone. According to a 2015 Pew Research survey, roughly one in five Americans have donated to an online crowdfunding campaign, often in small amounts up to $50.

While Niemeier has donated to national organizations, she said the updates and photos of crowdfunding make it feel more personal.

"I feel like I've become part of a family support for this person," she said.

Before you let a personal story tug at your purse strings, there are some things to consider.

Nikheel Hutheesing, Consumer Reports money editor, said it can be hard to tell if a campaign is legitimate. There have been documented cases of fraud.

"In general, a lot of these sites take measures to prevent that from happening," Hutheesing said.

To protect yourself, he suggests giving only to people you know, not to strangers.

If you don't know the person but want to help, he suggests not being the first to donate. Read the comments from other donors for insight to the cause.

Keep in mind, the recipient will not see every dollar you give. The sites often charge the campaign a fee to cover things such as payment processing and/or they keep a percentage of each donation.

And don't expect a tax write-off. Funds have to go to a registered charity to be tax-deductible.


About the Author: