Donnerstag, 25. April 2013

Caveat Emptor

In the days following the Boston Marathon bombing, crowdfunding sites reported more than $2 million raised to support victims of the tragedy.  Because online giving provides a quick, easy mechanism for supporting those in need, it is of little surprise that the public went online to support victims of the tragedy.  But the speed at which people turned to this latest trend in fundraising has BBB concerned.

In mid-2007, BBB Cincinnati had its first experience with a rudimentary crowdfunding site.  Local newspapers touted the site’s ability to aggregate small donations for a big impact, but BBB was skeptical.  We asked the operators of the site to substantiate a variety of claims and prove that recipients selected by donors received the donations that were made online.  The site’s operators never responded to our requests for information, nor did they verify that the intended recipients received the pledges.  Within a couple of years, the site’s operators closed up shop.

“They told us they raised large sums of money online, but we couldn’t account for where the money was going,” says Jocile Ehrlich, President & CEO of BBB Cincinnati.  “We still don’t know what happened to the funds they raised.”  This lack of independent oversight leaves BBB skeptical of crowdfunding.

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