Consumer Reports: What you should know about crowdfunding

Monday, October 02, 2017 05:10PM
Consumer Reports: What you should know about crowdfunding - Nydia Han reports during Action News at 4:30pm on October 2, 2017.


PHILADELPHIA - Crowdfunding campaigns to help the victims in Las Vegas have already been set up, but before you give to any crowdfunding campaign, there are some things to consider.

Any time disaster or tragedy strikes, many people turn to crowdfunding to raise money. On Monday morning, the chairman of the Clark County Commission in Las Vegas tweeted that he set up a GoFundMe page to raise funds for the victims of the mass shooting and in just the first few hours, it raised over a million dollars.

This is a legitimate campaign and we encourage you to donate, but before you open your wallet for another crowdfunding campaign, Consumer Reports has a few things you should consider.

Over the years, Ann Niemeier has seen a number of fundraising campaigns come across her Facebook feed and many times, she's been happy to help.

"I've seen some people in need of medical expenses and of course if something tragic happens to a family and their children need to be taken care of," she said.

She's not alone. According to a 2015 survey, roughly one in five Americans has donated to an online crowdfunding campaign, where donating feels more personal.

"I feel like I've become part of a family of support for this person," said Ann.

But a warning - Consumer Reports says it can be hard to tell if a campaign is legitimate. In fact there have been documented cases of fraud.

"Generally the best thing to do is to give only to people that you know rather than complete strangers," said Nikhil Hutheesing from Consumer Reports.

If you don't know the recipient personally, don't be the first one to pitch in and read comments from other donors before giving.

"And see what they have to say about this campaign and make sure that it's legitimate," said Nikhil

Also avoid overfunding. If a campaign has met its goal, think twice.

"Then don't give more. That's kind of the limit and assume that they've gotten what they need and don't give anything more than that," said Nikhil.

And keep in mind, the recipient won't see every dollar you give. These sites often charge the campaign a fee to cover things like payment processing.

So if you know the people in need, consider giving them the money directly and cutting out the middleman.
ONLINE:

https://www.consumerreports.org/crowdfunding/what-you-should-know-about-crowdfunding

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