BBB Tips: Crowdfunding

  
     
June 25, 2014

Jacksonville, FL- In recent months our local community has seen its fair share of crowdfunding requests. From business startups to families and individuals in dire circumstances, the community has pulled together to supply those in need.  Gone are the days of barbeques and bake sales to raise funds. Now crowdfunding sites are all the rage, they allow individuals to collect small contributions from a large group of people online to fund a business, charity or function.  While good in theory, these crowdfunding efforts may not be in practice. So, how can an informed donor take measures to reduce the risk of getting taken in the crowdfunding environment? BBB has these suggestions for you.

  • Charities can be checked. Crowdfunding websites and projects produced by charitable organizations that have received 501(c)(3) tax-exempt status provide more opportunities for verification.
  • Give to individuals you know. It is safest to give to those individuals you personally know who are contacting you to support their specific project.
  • Projects that share updates provide greater transparency. Updates from a project’s organizers help to ensure they’re being honest about the uses of raised money.
  • Don’t assume your donation or gift is tax deductible. If you are funding a project run by an individual instead of a charity, the funding you provide may not be deductible as a charitable gift for federal income tax purposes.
  • Be especially careful after a disaster or tragedy. Con artist will strike while the emotional iron is hot.
  • Read the fine print. There could be credit card fees and administrative costs associated with donating.
  • Specialized crowdfunding sites may be more adept. A site that allows any type of crowdfunding may result in more challenging oversight hurdles.

Bottom line is do your due diligence to ensure that your money is going where you intend it to.  For more information start with BBB Wise Giving Alliance and their guide to crowdfunding for charitable causes

For more information you can trust, visit us at bbb.org/north-east-florida or follow us on twitter @BBBJacksonville.

For more than 100 years, Better Business Bureau has been helping consumers find businesses and brands they can trust. In 2013, consumers turned to BBB 131 million times for Business Reviews on more than 6.5 million businesses, all available for free at bbb.org.  The Council of Better Business Bureaus is the umbrella organization for 112 local, independent BBBs across the United States, Mexico and Canada, as well as home to its national programs on dispute resolution and industry self-regulation.