GoFundMe is not the only site on the Internet that enables people to raise money for their causes, but it appears to be the most popular one of late.
Across this province, as well as the rest of Canada, people are asking for financial help for everything ranging from medical bills and disaster relief assistance, to cosmetic surgery, family trips to Disneyworld and surgery for pets.
GoFundMe is a US based company, started in 2010, that, essentially, gives people looking for donations a way to connect with people from their own community or around the world.
GoFundMe makes money by deducting a five percent fee from each donation received by an individual’s GoFundMe campaign.
A small processing fee of three percent will also be deducted from each donation, the GoFundMe website states.
It’s proven an extremely popular and successful way to collect funds to help others.
However, there’s something bothersome about it as well.
People are certainly free to give as they wish, to causes they feel worthwhile.
And people are free to ask for help.
There’s nothing wrong with that.
In fact, thank goodness people around the world are generous.
However, we have to wonder whether this new type of fundraising needs to be reviewed, and controlled.
In the past, before there was the Internet and the ability to reach into pockets and wallets around the world, people who found themselves in dire financial situations due to medical problems or tragic circumstances, could find help from the local community — via churches, registered charities and organizations.
In that process, someone — an organized group usually — would set up a bank account for donations to a particular person, family or cause.
The money would be held in trust, with two or more signing officers on the bank account.
In some cases, all the money would be handed over to the family to use as they wish, but in other cases the money would be paid out to cover the receipted expenses incurred by the family.
Once the family’s needs were taken care of, money left in the account could be held in trust in the event someone else would need help at some time.
With GoFundMe it’s an open door, with no proof of receipts required and no ceiling on the amount of money to be donated to a particular cause.
It results in situations where friends set out to raise money for a neighbor who needs a car to get to work, and they raise nearly half a million dollars to pay for a car.
This is where we meet the proverbial double-edged sword.
Crowd funding is becoming more important to collect money for worthy causes; but it begs the question of how much is enough?
Then there’s the tax question.
Should those who collect money from crowd funding be held accountable, through taxation, by agencies like Revenue Canada?
Apparently, Canada’s tax agency is already assessing the crowd funding and has made some determinations. Folks who use this method to raise capital for a business, for instance, would be subject to tax rules.
Revenue Canada has regulations for registered charities under the Income Tax Act. They must provide proper accounting of donations and expenses, by receipting donors and keeping account of expenses.
In the future, the taxman may deem donations through GoFundMe as taxable income.
Until then, however, it’s up to people to decide whether or not to donate their money to what appears to be a worthwhile cause.
We’d suggest, support your local registered charities first. Keep your money close to home, and put it where you know it will definitely do some good — whether it’s with your local church or Lions Club, or by donating to a close friend’s GoFundMe project.
And if you put your hand out for GoFundMe, and raise more money than you really need for your cause, do the right thing. Take some of that gifted excess cash and make a donation yourself, to your local community.
It’s the right thing to do.