DENVER (CBS4) – The Federal Trade Commission is holding a workshop on Tuesday, June 9, called “The ‘Sharing’ Economy: Issues Facing Platforms, Participants, and Regulators.” In the conversation, regulators will be talking about crowdfunding among other forms of peer-to-peer platforms emerging on the Internet.
Crowdfunding has exploded on the Internet in the last five years. There are dozens of websites offering a wide variety of fundraising opportunities. One of the most popular is GoFundMe.com. Since going online in 2010, GoFundMe has raised more than $1 billion.
“Definitely an excellent way to reach people initially,” said Darrin Duber-Smith, marketing professor at Metropolitan State University of Denver.
Duber-Smith worries that while crowdfunding has gone viral, the regulation that governs most nonprofit fundraising hasn’t kept up.
“I doubt very seriously that there’s really a system that’s adequate to vet the legitimacy of some of these projects,” Duber-Smith told CBS4.
GoFundMe does have a long list of campaigns that they do not allow. The list is in among the Terms & Conditions. While site managers investigate every complaint, they told CBS4 in an email response to our questions that “it’s not feasible for us to investigate the details behind every campaign.”
“Just really very little idea of where the money’s going,” Duber-Smith said.
Pat McClain and his wife Karmu have proof of where the money they raised is going. On their GoFundMe campaign site, they show pictures of relatives in Nepal holding cash.
“We’re trying to be as transparent as possible,” McClain told CBS4.
Karmu is the youngest of 13 children born in Nepal. Her entire family lives in two small villages in the Langtang region of the Himalayas of Nepal. Avalanches and mudslides in the wake of the powerful April earthquake buried one village and completely destroyed the other.
“Now the people’s whole village is washed up … no place to live … no income … and family lost,” Karmu told CBS4.
Thirteen of Karmu’s family members are missing, and several others injured. It took two weeks for them to be rescued from the mountains. Now they’re staying in a camp in Katmandu. The McClains started a GoFundMe account to help pay for immediate expenses. They’re also hoping to eventually help the family get back on their feet. In just three weeks, they were able to raise more than $30,000.
“We’re just overwhelmed with gratitude and humbled by the response,” Pat McClain said.
On GoFundMe alone there are 1,457 campaigns for causes in Nepal. There are also hundreds of campaigns to pay for funerals, medical expenses and trips abroad. Duber-Smith worries that soon they’ll blend together.
“In the pretty near future there’s going to be a saturation level that we as a culture are going to reach,” he said.
Denver Cruiser Rides stands out in the crowd. Every Wednesday hundreds of bicyclists roll through the city to a destination party. Brad Evans organizes the rides and says that as they get bigger they get more expensive, he’s hoping a GoFundMe campaign will put him back in the black.
“It’s successful in that it gives you a bigger audience to try to ask for support,” Evans told CBPatS4.
GoFundMe, along with other crowdfunding sites, is a platform for anyone to raise money for just about any reason. While every campaign is available to the entire Internet, it’s usually friends and family who make a campaign a success.
Libby Smith is a Special Projects Producer at CBS4. If you have a story you’d like to tell CBS4 about, call 303-863-TIPS (8477) or visit the News Tips section.