FINANCIAL

Crowdfunding Supports People In Time Of Need Or In Their Dreams

By Pia Hallenberg
The Spokesman-Review, Spokane, Wash.

It was an ordinary day in February when Mike Capka called to check on his daughter McKenzie. A student at the University of Montana in Missoula, McKenzie lived in a dorm and was in frequent contact with her family in Spokane. But this time around she didn’t pick up.

Fearing the worst, he called the university.

“They found her in her bed, unable to move, unable to speak,” Capka said. “She’d had a stroke.”

McKenzie was just 18 years old and the stroke hit without warning, destroying about 75 percent of the left side of her brain.

After a short stay at a hospital in Missoula, she was flown to Providence Sacred Heart Medical Center in Spokane for brain surgery. The flight alone cost nearly $36,000. The hospital bills quickly reached hundreds of thousands of dollars. And then Capka was laid off.

That’s when family friend Jessica Dehler got the idea to start a GoFundMe campaign to help pay some of McKenzie’s medical expenses. The campaign, one of more than 760 active GoFundMe pleas in the Spokane area, has raised more than $30,000.

Crowdfunding as a source of charitable giving has taken off at a breakneck pace.

A visit to gofundme.com serves up a heart-tugging cross section of life circumstances and hardship.

There are requests for money to fix a bird’s broken wing, pay funeral costs for loved ones, go on missionary trips to faraway nations, pay medical expenses, buy equipment for sports teams and send couples on honeymoons.

Since San Diego-based GoFundMe launched in 2010, it has raised $1 billion from 11 million donors around the world.

It’s a simple concept: using credit card processing provided by GoFundMe, campaigns ask for donations for anything that’s legal and the amount raised, no matter how big or small, is paid to the beneficiary.

Other sites, like Kickstarter, Indiegogo and GiveForward, have different rules for the kinds of campaigns they allow and how the money is paid out, but they all function pretty much the same way. And they all take a cut of the money raised, either from the donor or the beneficiary, or both.

According to Massolution, a consulting company specializing in crowdfunding, global crowdfunding totaled $16.2 billion last year, up from $6.1 billion in 2013. Massolution expects crowdfunding to bring in $34.4 billion this year. The company notes, however, that while personal fundraisers get the most publicity, most of the money goes to crowd-based lending — $11.08 billion last year.

Surprisingly to some, crowdfunding websites don’t guarantee the fundraising projects are real. And in most cases donors have no way of knowing whether their donations were spent the way they expected.

The Washington state attorney general’s office has received nearly 100 complaints about crowdfunding campaigns during the past year.

Attorney General Bob Ferguson said consumers have little protection when it comes to crowdfunding.

“Basically, you should only invest money you are ready to lose,” Ferguson said.

When it goes viral
Donors respond to crowdfunding pleas for many different reasons. Capka said he believes it’s a personal connection: Perhaps the recipient is someone you know, or it’s someone in similar circumstances as yours.

Intense media coverage of an event leading to a crowdfunding campaign can help put donors at ease.

When a Coeur d’Alene police officer was killed in the line of duty earlier this month, a GoFundMe page raised $70,000 in seven days.

“I will admit it was chaotic,” said Addison Arce, one of the founders of the Kootenai County Police and Fire Memorial Foundation, which managed the fundraising for the Greg and Lindy Moore fund. “We had more than $25,000 donated at the front desk in the first six hours. It was completely overwhelming.”

The GoFundMe campaign was complemented by a traditional fundraising bank account at the local Umpqua branch.
Arce said donations came in from as far away as Australia.

“Those are donations we would never have received without GoFundMe,” Arce said.

Because crowdfunding relies on social media, donors often leave comments with their donations, and it was frustrating to Arce that they couldn’t reply to everyone.

“We really tried to keep up, but we just couldn’t,” he said. “We are monitoring things but we just can’t respond to everyone.”
By now, the campaign for Moore’s family has raised more than $200,000 — about half of that on GoFundMe, where donations are still trickling in.

For the love of dogs and horses
One of the more popular fundraising categories on GoFundMe is “animals.” There, big brown puppy eyes, wet noses and horrid surgery scars pull at the heartstrings of animal lovers, who donate to cover everything from a dog’s hip replacement to hay for horses to the costs of new roofs for rescue organizations.

Horse trainer and breeder Marion Dresel-O’Connor, who owns Cocolalla Creek Sport Horses in Careywood, Idaho, unexpectedly found herself at the receiving end of such a campaign.
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When her mare, Romance, gave birth to a colt in February, then soon after developed one bout of colic after another, she shared the story on Facebook.

The mare and her newborn were hauled down to Washington State University’s School of Veterinary Medicine, and the veterinary bills began running up.

Dresel-O’Connor took to Facebook initially searching for a nanny mare for the newborn colt.

“I didn’t think she was going to make it,” Dresel-O’Connor said. “I was beating myself up for letting her have the two surgeries, but what can you do?” Horses often die from colic.

When a friend started the GoFundMe campaign for Romance and the foal, Fiorenzo, Dresel-O’Connor was both surprised and touched that donors quickly gave a little more than $2,000.

“I would never have thought of asking for money for myself,” she said. “The money really helped. I’m very grateful to all the donors.”

But she said people may want to think twice about putting pleas on social media.

“In my own group of people, this was fine; people were super supportive,” she said. “But when we shared it in another group, I got a lot of criticism — you never know who reads it on social media.”

Giving to individuals is one thing, but pet rescues and sanctuaries can be a murky area.

Janet Dixon, of Spokane County Regional Animal Protection Service, said she’s far more concerned for the welfare of the animals than she is for the people who may be scammed when they give to various pet rescues.

“No licensing is required to start an animal rescue organization,” Dixon said. “Many of the rescue people are terrific and well-meaning people, but they get in over their heads, especially with big animals.”

For instance, a rescued horse can easily cost $1,000 for the first three months of its rehabilitation, Dixon said.

“It’s so important that a rescue has sound financial founding,” Dixon said. “Personally, I would never give to an organization that doesn’t have a clear vision statement.”

Large fan base helps on Kickstarter
Another popular fundraising site is Kickstarter. There, entrepreneurs seek investors to support a creative project — like music, writing, technology or a film — in return for a share in the project and often a sample of sorts, like a CD or a ticket to an event.

The site has secured funding for more than 85,000 creative projects since its launch in 2009.

Garrin Hertel, a guitarist in the band Hot Club of Spokane, said they used Kickstarter to help fund a new CD. The band’s goal was $4,500 and each donor got a CD and a ticket to the CD launch party at the Bing.

“We raised about $3,500 from 75 people and only 10 of them were people we didn’t know,” Hertel said. “We only met goal because some of us threw in some extra dough to push it over the limit.”

Hertel said bands with big fan bases will do much better with crowdfunding than Hot Club did because they already have a popular product.

“I’m not sure we’d do it again,” Hertel said. “When you have a small fan base, you really put it on your friends and family to pull you through.” The average size of a donation to Hot Club of Spokane was $45.

Hertel knows musicians in Portland and New York who’ve raised $10,000 to $20,000, and he jokes that if he was wealthier he’d troll crowdfunding sites and give to projects just because he likes them.

“I can’t think of too many people here in Spokane who can raise five digits without breaking a sweat,” Hertel said, “unless they have a rich uncle or something.”

Every little bit helps
Most campaigns don’t go viral. Local writer Jessica Rising has been trying to raise $10,000 to help her finish a book project. She’s raised $755.

“It’s extremely stressful,” Rising said. “I can’t focus on the book because I’m so stressed out trying to make ends meet.”
She tried crowdfunding while she was looking for work and other funding.

Her $10,000 goal is the result of calculating how much it would take to pay her bills and get her to a conference of the Society of Children’s Book Writers and Illustrators in Los Angeles this fall.

“Some people are so judgmental,” Rising said. “I calculated exactly what I needed. No one is forcing you to give anything.”
Though she’s far from her goal, she’s extremely grateful to her donors.

“It really means a lot,” she said. “They believe in me.”

Sometimes the crowdfunding amount is just enough to help someone through a rough time.

When Nikole Williams suffered a terrible burn in a fire pit accident in 2013, she was a student without health insurance. Charitable organizations at local hospitals covered some of the immediate cost of her surgeries, but care for burn wounds is not only excruciatingly painful — it’s also expensive.

Williams and her boyfriend set up a GiveForward account asking for donations to help cover her medical costs.

“It was easier to use than trying to figure the bank thing out and it was quicker,” said Williams, who’s now fully recovered. “But it was hard for me to ask for help in the first place. I had to get over that.”

She raised about $1,200 — not much in the world of medical bills — but it helped pay for medical supplies and she said she will always be thankful to the donors.

“I don’t think there’s anything wrong with doing it,” Williams said. “If your story catches someone’s heart, they may help you. Some gave $20; some gave $100. I would give to someone if I could.”

If it seems too good to be true…
Both Kickstarter and GoFundMe advise donors to only give money to people they know. That’s a piece of advice that has the full support of Ferguson, the attorney general.

“Do your research. Be familiar with the sites’ policies. Make sure you know the people you give money to,” Ferguson said. “Crowdfunding can be a great tool, but every time consumers invest we have to remind them to be prudent.”

In 2014, Ferguson’s office filed what’s considered the first consumer protection lawsuit of its kind against Ed Nash, who’d raised more than $25,000 on Kickstarter to fund a new playing card game.

The card game never materialized and investors didn’t get their money back or the cards.

“Kickstarter has a policy that the person seeking the funds either provides the service and the project, or they don’t get the money,” Ferguson said.

All sites have ways to report a campaign that is fraudulent.

Chelsea Maguire, director of communications for the local Better Business Bureau, said there have been no local reports of scams through crowdfunding sites.

“The closest concern we have had is when someone sets up a bank account for a person or family in crisis,” Maguire said, “and donors don’t have control over whether funds collected will actually go to them.”

Charitable bank accounts should be made in the intended recipient’s name, not in the organizer’s name, and the same is true for crowdfunding campaigns.

Local CPA Amy Biviano wrote in an email that if a large amount of money begins to pour in, it’s a good idea to seek the advice of a tax professional. Biviano added that crowdfunding is such a new area that accountants disagree over taxation issues both on the donor and recipient side.

Family grateful for friends, strangers
On Tuesday, McKenzie Capka is headed in for another round of surgery. She’s been wearing a helmet since her initial stroke surgery to remove a piece of her skull, allowing her brain to swell as it healed. Now that piece of skull is being put back in place. She beams a smile at her dad, as he gently shows the area of her head the size of a pizza slice, where surgeons will go back in.

“I’m a little scared,” she said.

She doesn’t remember anything from the stroke or her long stay in the ICU.

Dehler, who started the GoFundMe for McKenzie, said she did so because she knew how long, grueling and expensive her recovery would be.

“The Capkas are the most selfless people I know,” Dehler said. “They would give their last dollar to a stranger in need. I knew a lot of people who wanted to donate to them.”

Mike Capka is just grateful.

He said there are still medical bills to pay, but the GoFundMe donations helped with that and also allowed the family to do little things for McKenzie that helped keep her spirits up.

She adopted a little dog named Ginger.

Capka laughs: “She always wanted a dog — now we let her have one.”

She will be able to take a trip to visit her boyfriend in Detroit as soon as she’s healed from the upcoming surgery.

McKenzie will return to the University of Montana for some treatment at the speech pathology center there — a program she volunteered for before she got sick — and she hopes to return to school full time next spring.

Because the GoFundMe campaign was shared frequently on social media, Capka said people in 40 countries were praying for McKenzie at one point.

Capka said the family feels blessed and thankful.

“One of the biggest donations we got was $5,000 from someone we didn’t know,” Capka said. “A lot of people love this girl.”

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