Donors should beware before giving money to crowdfunding sites

BUFFALO, N.Y. (WIVB) – After the ‘Ice Bucket Challenge’ raised over $220 million for ALS research, many other causes stood up and took notice of how effective fundraising can be on the internet.

It’s called crowd funding, and it’s taking the place of some more traditional forms of fundraising.

Last December, News 4 introduced you to Allie Roberts who raised $500 by making and selling handmade ornaments to help a friend pay medical bills. Her friend, sixth-grader Stella Usiak has been in and out of Roswell Park for years battling Leukemia.

But the donations really started rolling in when Allie’s mom started crowdfunding. She opened an account with GoFundme.com, and has raised close to $8,000.

“Many of the donations came from complete strangers” said Deanna Roberts. “I think a lot of these people, some of these people had gifts given to them in the past and just want to pass it on, and it’s the same with the Usiaks, they’ve already stated anything extra that’s left from this after she’s done with treatment will pay it forward to another local family.”

There are currently more than a thousand different causes just from the Buffalo area seeking donations through GoFundme.com.

The Tonawanda Island Cat project raised $13,000 in a matter of days to spay, neuter, and release feral cats.

But crowdfunding doesn’t work for every cause. Proponents of creating an Aquabus ferry between Buffalo’s Inner and Outer Harbor posted a video on IndieGoGo.com, and have only raised about $1,000.

“It did not go as well as we thought” said Pierre Wallinder of the Buffalo Aquabus Project. “We relied a little too much on the power of the internet, and we were not recognized.”

Peggy Penders of the Better Business Bureau says while both GoFundme.com and IndieGoGo.com are affiliated with the BBB, they can only do very minimal verification of each cause, so before you donate to one, it’s a smart idea to do your own research.

“Do they have a physical address? Is there a phone number? Can you ask questions? Are they responsive to those questions,” are some the questions Penders recommends donators ask themselves before giving money to a cause.

She also says any cause that wants payment through PayPal should be a red flag. Look for causes that are linked to a fund at a bank. Also, if you want to use it as a charitable deduction, make sure you can.

“That only applies to 501c3 charities that are filed with the state properly, so if you’re really considering a large contribution, you’re going to want to verify a legitimate 501c3 charity and the Better Business Bureau can assist you. Often times, our hearts are involved with these decisions but we have to really keep our minds and our verification kind of in play,” Penders explained to News 4.

Here is more in-depth advice on crowdfunding from the BBB:

APP USERS | Tap here to download the guide

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