The aftermath of mass shootings in the U.S. invariably features an outpouring of donations for the victims and their families. These days, increasingly, that impulse to give is channeled through a crowdfunding website instead of a traditional nonprofit organization.
A GoFundMe campaign reported more than $11.4 million in donations after an attack on a music festival in Las Vegas last month left nearly 60 dead and more than 500 wounded. Steve Sisolak, the commissioner of Clark County, launched the appeal on the crowdfunding website. But unlike established charities such as the Red Cross, Sisolak doesn’t have long experience in the painstaking logistics of disbursing payments to a long list of victims.
GoFundMe, for its part, makes it easy to solicit funds from strangers and easy for those strangers to donate. The website collects a fee from the money that flows in, and channels the money to a payment processor, which charges its own fee. The company also guarantees refunds of up to $1,000 to donors whose funds have been misused. When a fundraiser is for a specific individual or family, GoFundMe can transfer donated funds directly to the bank accounts of the beneficiary. It did that for many individual campaigns created after the Pulse nightclub shooting in Orlando, Florida.
But the process of determining where money from a general fundraiser goes is a major logistical undertaking, even for experienced charities, that can take months to handle transparently.
Sisolak’s GoFundMe page became the basis for the Las Vegas Victims Fund, a new organization that will be run by a group of 16 volunteers from the local community. Scott Nielsen, the chairman of the new charity, said he is working to obtain nonprofit status known as 501(c)(3). He also turned to two people with far more experience figuring out how to parcel out a large pool of money: Kenneth Feinberg, a lawyer best known for his work distributing financial aid to victims of the Sept. 11 terrorist attacks, the school shooting in Newtown, Connecticut, and other massive tragedies, has consulted with Nielsen, along with Jeffrey Dion of the National Center for Victims of Crime and its National Compassion Fund. The men worked together to administer the money in the OneOrlandoFund after the Pulse shooting, and are donating their services free.
“As you can imagine, nobody involved in this committee has ever done anything like this before,” Nielsen said. The committee members include a local casino executive, a religious figure, a member of law enforcement and the chief legal officer of the Ultimate Fighting Championship.
When GoFundMe representatives noted during one of the Las Vegas Fund’s early organizational meetings that it charges a fee, “People, on the one hand, felt like that didn’t feel quite right,” said Nielsen. “On the other hand, getting a fundraising entity set up immediately was very helpful.”
The first step, Nielsen said, will be to set up a protocol for filing a claim and organizing administrative infrastructure. The fund plans to use a claim system similar to that used by fundraisers for victims of the Boston Marathon bombing and the Pulse shooting. According to a draft version of the protocol, posted on the National Compassion Fund’s website last week, distribution of payments will begin in March 2018.
The Pulse shooting also generated an outpouring of donations – and the challenge of figuring out who to help and how much to give. The OneOrlando Fund ended up allocating $350,000 to each of the families of the 49 killed in the attack. Those present during the attack but not among the 68 injured received $25,000. Victims who were injured and hospitalized received from $65,000 to $300,000, depending on how long they were in the hospital.
The Las Vegas fund plans to use a similar sliding scale to distribute the funds, based on the level of injury experienced by the victim. Nielsen said the number of victims probably means the fund won’t be able to hand money out as quickly as happened in Boston and Orlando, where funds were distributed in fewer than 90 days.
To ensure the process goes as smoothly as possible and is devoid of fraud, the National Center for Victims of Crime will process the claims. “You want to get money out to people as quickly as possible, as quickly as we possibly can,” Nielsen said. “On the other hand, you need to process these claims in a way that we can determine the validity.”
GoFundMe isn’t a relief organization, even though it has become linked to most high-profile disasters and attacks in recent years, including recent wild fires in California and Hurricane Harvey. Unlike a typical charity, donations made through GoFundMe can’t be counted toward tax deductions. The company takes 5 percent of contributions made to a campaign; an additional 2.9 percent of each donation and 30 cents per donation go to WePay, an online payment processor.
A $100 donation to the victims of the Las Vegas shooting made through GoFundMe will yield $91.80 to Sisolak, the organizer of the campaign. Of the $11.4 million raised, at least $4.4 million has come from donations made offline, which are therefore not subject to GoFundMe fees.
In the case of Las Vegas, GoFundMe so far stands to collect about $352,000. The company said it made a donation of $150,000 through an independent nonprofit to the National Centers for Victims of Crime, effectively decreasing its take to roughly $202,000. GoFundMe had no comment on its fees related to the Las Vegas shooting campaigns.
A GoFundMe spokeswoman said in a statement that the company was “working in conjunction with country and state officials and nonprofit partners on the ground, like the National Compassion Fund, to safely manage and quickly distribute funds raised for the shooting victims and their families.”
GoFundMe’s fee is comparably less than what many traditional nonprofits spend on overhead and fundraising costs. The Red Cross, by comparison, spends $30 to raise $100. Programs that spend less than $4 to raise $100 earn an A+ rating, according to the American Institute of Philanthropy’s Charity Watch tool, while those that spend from $5 to $11 earn an A.
Crowdfunding sites do exist that charge no platform fee, such as YouCaring.com; givers pay a 2.9 percent fee, plus 30 cents, to the payment processor.
Dion, from the National Center for Victims of Crime, applauded GoFundMe for offering a simple platform for small donations. “The vast majority of what is collected, they’re $10 and $20 donations,” he said. “Nobody wants to do that work. … It brings in donors that would not have been brought in otherwise.”
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