How do you know if money you donate to a crowdfunding website is really going to a good cause?
One of Australia’s most popular crowdfunding websites has changed its regulations in Australia this week to protect donors from being defrauded.
American crowdfunding platform GoFundMe has implemented a guarantee to refund donations when causes are discovered to be fake.
The move comes less than a week after a 27-year-old Townsville woman was charged after allegedly faking cancer to defraud GoFundMe donors of $55,000.
“In Australia the GoFundMe Guarantee will protect all donors and campaign organisers from misuse,” chief executive Rob Solomon told ABC Radio Brisbane.
“We can use our technology and the community that donates to the GoFundMe to figure out if there is misuse or fraud.
Tips for collectors
- To run a one-off, short-term fundraiser, approach an existing licensed charity for permission to collect under their licence
- For crowdfunding campaigns, use a website that will link your campaign to an established charity
- Charitable organisations and would-be fundraisers should contact their state consumer protection authority for advice before going ahead
“From there users need to request a refund and we will send your money back to you.
“We do a lot to protect our community and once in a while, less than 1/10th of 1 per cent of the time, we see misuse of the platform.”
Mr Solomon said regarding the recent case in Townsville, all donors would have their money refunded.
“In this case we worked with local authorities to discover the fraud and not only will she get into trouble, but we will refund the money to anyone who donated,” he said.
How hard is it to detect a fake campaign?
While more than 10,000 GoFundMe campaigns are running in Australia, Mr Solomon said the online community and the company’s processes could easily detect misuse.
“The reason it’s not hard to detect is that the community of donors know what’s going on,” he said.
“We hear from them if there’s a hint of impropriety and we have a lot of technology and process to weed out misuse.”
Mr Solomon said the process for beneficiary flow (when people fundraise for another person) had also been worked on.
“It requires that the person who is raising the money can’t collect the money for someone else,” he said.
“If I’m raising money for you, than you have to present your identity and prove that you are you, and that’s the only time we will release the money.”
Australia’s love of crowdfunding
The platform is available in 19 countries around the world, with safeguards rolling out into other markets alongside Australia.
“We’ve had more than 2 million Australians donate to campaigns and we’ve had more than $200 million donated to campaigns,” Mr Solomon said.
“If you step back for a second, it’s pretty astonishing. In a short amount of time nearly one in 10 Australians have donated to a GoFundMe campaign.”
He added that more than 350 campaigns were currently running in Australia in support of people affected by drought.
“More than $1 million has been raised to help relieve the suffering of the drought,” he said.