I currently live in New York City and am one of the luckier people who was not harmed by Hurricane Sandy. Unfortunately, dozens were killed and over 40,000 were left homeless. In a disaster of this magnitude, we come together and people all over the country donate to support the relief effort. But this was the first major natural disaster where the new technique of crowdfunding was implemented to streamline donation efforts.
Fundly, HelpersUnite, and GoFundMehelp people connect through crowdfunding and were leaders in the Sandy relief effort. On these sites people affected by the storm and their friends created a profile where people donated to help them rebuild their homes and their lives. The websites are filled with touching stories of people explaining how their home was destroyed or a family member injured, giving a more personal perspective to those interested in donating.
Devin Thorpe, a contributor on Forbes, highlights a case on GoFundMe where the ex-player of a retired high school football coach found out that his coach had lost his home in the storm and managed to raise over $15,000 in two days via the crowdfunding site.
Other types of crowdfunding sites succeed by acting as a middleman between the funder and large organizations such as the Red Cross. Restore The Shore utilized the Selfstarter platform to raise over $100,000 for New Jersey relief.
Some people have mentioned fears of extortionists with crowdfunding. As a result, some sites have tried to mitigate fear by requiring contact information or even a video showcasing what was ruined such as HelpersUnite. In the end, crowdfunding has experienced little to no fraud. Leading site Indiegogo reports virtually no fraud.
The advantage of participating in crowdfunding as an alternative to donating to larger charity organizations is that you know exactly where you’re money is going. When there are no administrative costs, such as those incurred by charities, the full donation (minus the percentage the crowdfunding site takes) goes straight to the person/cause in need. This could be a better practice since it creates a separation of powers. Instead of blindly donating, you can see someone in your community or across the world is in need and set up a page in their name to collect funds for them. This allows those who are too busy to volunteer to feel more active in the donation process. They are able to see the effect of their funds and can even reach out to the person in need after they have donated.
This new type of interaction creates a more open dialogue and personal community between donors and the causes they support. Although Red Cross and other organizations act as first-responders to a disaster, there are fewer resources for those with long term needs. Crowdfunding allows those affected to not only survive the aftermath, but prosper.
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