Increasingly popular crowdfunding sites like GoFundMe pose another challenge for local nonprofits
South Louisiana’s historic flood was unique in many ways, not least of which was the amount of money raised through the online crowdfunding site, GoFundMe. According to GoFundMe Regional Communications Manager Bartlett Jackson, 6,800 campaigns had raised more than $11.2 million for Louisiana flood victims by mid-November. By comparison, the Baton Rouge Area Foundation raised about $7 million in the same period specifically for flood relief, and the Capital Area United Way raised $1.5 million.
The online giving trend, a favorite among millennials, has grabbed the attention—and frustration—of many traditional nonprofits, especially those that need to raise additional funds to compensate for a surge in services or for flood damage on top of what they raise annually.
“I definitely feel that a lot of money went to sites like GoFundMe,” says Greater Baton Rouge Food Bank President and CEO Mike Manning. “When the smoke clears on this it will be interesting to see the impact.”
Unlike donations to a 501(c)(3) charity, GoFundMe donations are not tax deductible. Moreover, the entity charges recipients 7.9% on funds raised as well as a 30-cent fee per donation.
Still, sites like GoFundMe allow anyone with a computer and valid credit card to supply emergency aid to cash-strapped disaster victims or others in need. Nonprofit agencies cannot grant cash directly to individuals.
The online giving trend is not lost on regional nonprofits. On Tuesday, Nov. 29, the Louisiana Association of Nonprofit Agencies spearheaded its inaugural #GiveBR online drive, which allowed donors to give to one of 97 local charities or to send their donations to a general fund. The donations are tax deductible.
The portal was built shortly after the flood, says LANO President and CEO Kelly Pepper, and it follows the “Giving Tuesday” trend, a day of national online fundraising that takes place the Tuesday following Thanksgiving. The #GiveBR drive ended up raising $52,245.
“We have seen a new donor base in our community and around the country, and think it’s an important group for nonprofits to cultivate,” says Pepper. “We hope this becomes an annual program.”