Fraud plagues do-it-yourself charities after Orlando
Sat., Aug. 27, 2016
The more than 430 fundraisers posted on the GoFundMe website after the mass shooting at a gay nightclub in Orlando have exposed weaknesses inherent in these popular do-it-yourself charity campaigns: waste, questionable intentions and little oversight.
The fundraisers – an average of more than four for each of the 49 killed and 53 wounded – include travelers asking for cash, a practitioner of ancient healing, a personal safety instructor who sells quick loaders for assault rifles and even convicted identity impostors.
“There was a deluge,” said Holly Salmons, president of the Better Business Bureau for Central Florida. “It was almost impossible for us or anyone else to be able to vet.”
The crowdfunding sites operate outside traditional charitable circles and often beyond the reach of government regulation. Appeals can be created in minutes by almost anyone and shared around the world.
The officially sanctioned Equality Florida campaign raised more than $7 million via GoFundMe, but another $1.3 million went to smaller appeals – mostly set up by people with little or no charity experience.
The Associated Press examined 30 campaigns chosen from throughout the lengthy list produced by a GoFundMe search for “Orlando shootings.” Within a month of the June 12 shootings, they had raised more than $265,000.
Half said donations would be used for legitimate-sounding purposes: to cover funeral, medical and other costs. Some campaign organizers were relatives of the dead or wounded. A high school basketball coach raised $15,297 for the family of Akyra Murray, a star player who had just graduated before dying in the attack.
But most campaigns lacked key details, such as exactly what the donations would cover or even who was asking for them. Only nine of the 30 organizers agreed to interviews.
One man wanted money for travel costs to Orlando to shoot independent news video. He hadn’t raised anything two months later. Another organizer raised just $25 for travel money to hold a community healing ceremony inspired by ancient shamanic rituals. She dropped that plan in favor of sending painted rocks with an inspiring word of support.
Jackson Yauck of Victoria, British Columbia, put up a lighthearted appeal to let the highest donor burn a pair of skimpy gold-colored shorts he wore to gay pride events. He had created the appeal on Jan. 1 on behalf of other charities, and when he tried to switch it to benefit the Orlando victims, GoFundMe froze his account for at least a week, he said. He agreed to transfer the donations to Equality Florida, and GoFundMe let the appeal go forward.
Yauck said he knew all but one of his 11 donors personally and didn’t feel a need to tell them of the switch. “It was just for fun. If you look at the bigger picture, we raised $600 off a pair of underwear,” he said.
Several businesses asked for contributions. One appeal raised $1,375 from 14 donors within two months to keep open a hair salon run by partners killed in the attack. A counseling center raised $150 to subsidize services to victims but closed its campaign when it found grant money elsewhere. GoFundMe helps make refunds when contributions go unused.
Weapons-accessory dealer Craig Berberich, of Bradenton, Florida, proposed holding public classes on personal safety. He posted a link to his business at the bottom of his appeal. He said he “wasn’t trying to promote my business.” Then he added: “I hope we didn’t give the impression that we were a charity.”
He said he was shutting down his appeal. It remained online over a month later – but with only $100 in donations. Among his store products: a high-speed loader for assault weapons.
Efe Atalay, of Clermont, Florida, raised $1,145 from 81 donors to buy security wands for nightclub entrances, but didn’t say which clubs and spoke vaguely of lobbying politicians to require such security measures. He didn’t respond to emails sent to his GoFundMe address.
Florida charities law generally requires no filings by crowdfunding campaigns meant for particular victims or their families or in support of other established charities. That accounts for the vast majority of appeals. Other states apply a patchwork of laws.
Yet, crowdfunding campaigns can distribute aid more quickly than large bureaucratic funds. And they have less overhead than traditional charities, with only 8 percent of donations on GoFundMe going to the website and credit card fees.
Bobby Whithorne, a GoFundMe spokesman, said the website’s staffers were vetting the Orlando campaigns before releasing funds, and only a small fraction of a percent of past appeals involved outright fraud.
GoFundMe froze funds from entertainment company manager David Luchsinger’s campaign when donations piled up quickly. Luchsinger said he was asked for more details of his plans to replace the ruined equipment of one of his deejays who was working at the club during the attack. Luchsinger set an initial goal of $5,000, and raised $8,742 in one month.
Asked about the website’s vetting process, he replied, “Was it so strenuous that you couldn’t fake it? No, you could definitely fake it.”
Despite his good intentions, things got mixed up. He didn’t realize someone else had launched a GoFundMe appeal for his deejay, who got his name removed from the second appeal. Two companies eventually replaced the equipment for free, so the deejay kept some of the donations to replace his lost salary and shared the rest with other club deejays, Luchsinger said.
Several big funds have joined forces in an official centralized campaign that raised more than $23 million, including the $7 million from Equality Florida’s GoFundMe campaign.
The donations to the central fund are generally tax-deductible, since they go to registered charities. Donations to a crowdfunding site are typically not tax-deductible, unless the organizer is a tax-exempt charity.
The bigger charities – unlike many crowdfunding campaigns – give timetables for distributing aid, and detail recipients and how decisions are made. Ken Feinberg, administrator for the centralized fund, has already held two town hall meetings with survivors and family members of the victims.
In one crowdfunding campaign, friends Guardini Bellefleur and Demetrice Naulings asked for $25,000 to set up a vaguely defined foundation in memory of Eddie Justice, a friend of Naulings killed in the shootings. They said the money would pay for Justice’s funeral and victim counseling.
Six people donated $253.
Wilhemina Justice said no one consulted her about the appeal in her son’s name or made arrangements to give her proceeds. “To me, it’s fraud,” she said.
Florida bars anyone convicted in the past decade of certain crimes, including identity fraud, from running a charity. Yet, court records show Bellefleur was convicted in 2012 of buying $3,570 worth of furniture by impersonating the son of an account holder, and Naulings was convicted in 2008 of giving police a false name and driving with a suspended license.
“We’ve all done some bad things that we would want to change, but this was my moment to change,” Naulings said.
Naulings acknowledged he never consulted Justice’s mother or helped pay for his funeral, but said, without offering details, his future nonprofit would someday help her.
Bellefleur did not respond to repeated messages, but in an online video, rejected the idea the pair wanted the money for themselves.
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