Crowdfunding Campaign Types

For traditional cause-based crowdfunding campaigns, the funds are typically transferred to the campaign creator’s account. Minus any fees charged by the crowdfunding platform. These fees can vary depending on the platform and the type of campaign but range from 5% to 10% of the total funds raised. Platforms like GoFundMe and Wishes charge the donor a minimal credit card transaction fee so there are no charges to the fundraiser. Additionally, GoFundMe gives the option to add a tip to cover GoFundMe’s overhead costs. 

No Guarantees

The campaign creator can then use the funds for their intended purpose, whether it’s to build a product or support a charitable cause. However, it’s important to note that with most traditional crowdfunding tech there are no guarantees that the campaign creator will use the funds as intended. While most crowdfunding platforms require campaign creators to provide updates on their progress on how the funds are being used, there have been numerous cases where creators have misused or even stolen the funds.

Lack of Accountability

If you are giving to a crowdfunding campaign for a neighbor who is going through some health challenges. In most crowdfunding apps today you will never know if they actually spent the money on what they said they would. There has been story after story of misuse of funds because many apps don’t have the controls in place to prevent this. See this story about this Massachusetts Family grieving from the loss of their son and are now tasked with trying to find an accounting of where the funds went from his crowdfunding account. Right now there are none. 

Mitigating the Risks

To mitigate the risk of donors asking where did my money go, Wishes has set out to provide trust and transparency to their donors. Wishes provides donors with tracking of their donations. From the story they funded to how that Wisher (fundraiser) has spent those funds. Wishes built “trust and safety” measures, such as identity verification and fraud detection. And, donors can report suspicious behavior or misuse of funds to the platform, which may investigate and take action if necessary.

In conclusion, when you donate to a crowdfunding campaign, your money goes to the campaign creator after the campaign reaches its funding goal, minus any fees charged by the platform. It’s important that you do your research on the cause, the trust and transparency and the platform before donating to a campaign and to make sure there is a way to report any suspicious behavior to the platform.

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